Reducing the threshold for repayment from £27 295 to £25 000, as well as increasing the amounts students will have to pay at a time are some of the key points of the new government plan.
Also outlined by the government are plans to increase the timeframe students have to repay their debt. While currently students have 30 years to pay off their loan, with the repayment being cancelled if not all of it has been paid, they will now have 40 years, increasing the amount of money overall they'll have to pay.
While currently students have 30 years to pay off their loan, with the repayment being cancelled if not all of it has been paid, they will now have 40 years
However, the government also intends to cut interest rates, which were previously RPI (Retail Price Index) plus 3%, but will now stand only at the rate of RPI.
Who will this affect?
The new proposed plan will affect all those on Plan 2 loans, meaning students who started university on or after September 2012 in England and Wales. However, the government has stated that for those starting university in 2022, and current students and graduates, the repayment threshold will remain at £27 295 until the end of the 2024/25 financial year.