University leavers impacted by the shake-up are those on ‘Plan 2’ loans and those with a postgraduate loan
Repayment thresholds for both types of loan had been due to rise this April by 4.6% based on average earnings growth, if the Government had followed practice from previous years. Its plan to freeze the repayment thresholds will mean:
- The repayment threshold for ‘Plan 2’ loans will remain at £27,295/yr from April, which means many university leavers will pay £110/yr more. This is instead of a repayment threshold of £28,550, which is what it would have gone to from April if it had been raised in line with average earnings. This change impacts all university leavers from England and Wales who STARTED university in/after 2012 and who took out a loan.
- The repayment threshold for postgraduate (‘Plan 3’) loans will remain at £21,000/yr from April, which means many former postgraduate students will repay £87/yr more. This is instead of a repayment threshold of £21,960, which is what it would have gone to from April if it had been raised in line with average earnings. This change impacts all English and Welsh (and EU) postgraduate students who took out a master’s loan on/or after 1 August 2016 or a postdoctoral loan on/or after 1 August 2018.
The freeze, if implemented, represents a break with the previous policy made by the Government in 2010 and then reiterated in 2017 by former Prime Minister, Theresa May, that the repayment…
