Half of students and graduates aged 18-22 said the prospect of taking out a student loan made them think twice about attending university, according to credit reference agency Equifax.

For a third of the group, they said government changes to student loans which would mean they pay back sooner and for longer, would deter future students.

The radical changes announced earlier this year come into effect for new borrowers starting courses in 2023/24. It means the repayment term will be increased to 40 years, a freeze to the income threshold at which 2012+ graduates repay, and a cut to the repayment threshold.

For those who will start university in 2023, these changes mean they can expect to pay £750 more each year on their student loan repayments. But it is not just the freshers of the future who can expect to pay more, Equifax said.

It calculated that for those who entered university this year (and every year since 2012), they will be repaying about £400 more than their graduate predecessors. Half (47%) of those who benefitted from the much lower pre-2012 fees think that these changes will likely result in an ‘intergenerational divide’ and over a third (36%) believe it is ‘unfair’.

The research comes as the final UCAS application deadline closes today, on Thursday 30 June. After this date, students will need to go through clearing.

And the concerns are revealed despite research highlighting that graduates earn £10,000 more than non-graduates.

‘University a more agonising decision’

Paula Roche, managing director of consumer solutions at Equifax UK, said: “With the looming UCAS offer deadline, 17- and 18-year-olds will be asking themselves whether or not they can afford to go to university in the coming days. This is increasingly becoming a more agonising decision as our research shows that graduates are becoming more concerned that going to university isn’t paying off.

“In turn, our research has also shown that these worries mean that graduates are ending up more anxious about managing their money than peers who didn’t go to university. Prospective students will be seeing these facts and asking themselves if university really is all that when it comes to future financial security.”

Roche added: “While student loan repayments might be a cause for worry for many people, it is important to remember that they don’t appear on your credit score, and that repayments vary by income, so people are usually only paying back what they can afford.”

Top tips for freshers’ finance

Equifax lists these five top tips for student finance:

1) Pick your student account wisely, there are many with lots of perks and those with a large overdraft might seem like a good thing when you’re a fresher, but you’ll be in trouble if you can’t pay back what you owe after you graduate.

2) Don’t let peer pressure push you into problem debt, take time to understand your monthly incomings and outgoings and live within your means while at university. This will ensure you’re setting yourself up for financial success after you graduate.

3) If you’re opening a credit card or using buy now, pay later loans, make sure repayments are set up and you aren’t missing them. It might not seem like a big deal at the time but missed payments can stay on your credit file for six years – well after you’ve left uni and got your grad job.

4) It is really important to pay your bills on time. Yes, student living can be hectic and sometimes you don’t know which one of your housemates is responsible for paying for water or energy or wifi, but a missed payment can have implications well after you’ve stopped living like a uni student.

5) If you need help, reach out. University is expensive, if you’re struggling to pay for your living costs let your university know, they might be able to help you. It’s always better to reach out for help early and set yourself up with a plan for financial security now and in the future.