The loan reforms that came into effect last year moved the salary of repayments from £27,000 to £25,000 and the pay back period from 30 to 40 years. These changes will negatively effect all graduates from 2023/2024 when the reform came into effect and it is being called ‘among the most regressive yet’ by Save the Student.
The reform is being called ‘among the most regressive yet’ by Save the Student
These changes will, in practical terms, mean that future graduates will get less in their pay packets and pay more back to the government over a longer amount of time, thoroughly reducing their expendable earnings.
The interest system has also changed for student loans, where previously higher earners would pay more interest, now everyone who takes a loan will take the same amount of interest regardless of how much they earn; this new interest will be based on inflation and how much prices rise.
The Student Loan Reforms that came into effect for this academic year will disproportionately effect disadvantaged students, women and students from the North and Midlands. This, while suspected when the reforms where introduced, has been confirmed by a new study that details that low and middle earners will take the brunt of the changes. With Rishi Sunak’s March Budget coming soon and the country paying more tax than they have since World War II, it's looking unlikely that the reforms will be undone anytime soon.