Government to lower salary threshold for student loan repayments
The government is planning to lower the salary level at which graduates start repaying student loans, according to reports.
At the moment, graduates do not start paying back their student loans until their salary reaches £27,295.
However, chancellor Rishi Sunak wants to reduce this threshold to as low as £23,000 in a bid to save the Treasury money, the Financial Times said.
This was the level recommended in the Augar review of post-18 education in 2019.
The move would save the Treasury just under £2bn a year, according to the Institute for Fiscal Studies.
The National Union of Students (NUS) said it was “totally opposed” to the plans.
Hillary Gyebi-Ababio, NUS vice president for higher education, said: “Like the Government’s decision to increase National Insurance contributions, this burden targets people earning lower incomes – after eighteen months of such hardship, and with the looming hike in energy prices set to hit millions of the most vulnerable this winter, the injustice is simply astounding.”
The government is also considering cutting the cap on annual tuition fees from £9,250 to £7,500, another recommendation from the Augar review, the FT reported.
A government spokesperson said: “The student loan system is designed to ensure all those with the talent and desire to attend higher education are able to do so, whilst ensuring that the cost of higher education is fairly distributed between graduates and the taxpayer.
“We do not comment on speculation in the run up to fiscal events.”