Students searching for a bank account may find they are offered less cash upfront this year, according to Defaqto (Chris Radburn/PA)
(Picture: PA Archive)The UK Government Is considering lowering the limit at which university graduates will need to pay back their student loans, according to The Financial Times – in news which has infuriated people online.
The outlet reports that one government minister said “that’s the plan” when it comes to reducing the current threshold, which sees workers begin to pay back loans for their tuition fees when their salary hits £27,295.
However, the FT claims there is talk of a change to this figure, which comes ahead of next month’s spending review by chancellor Rishi Sunak and follows the Augar review into post-18 education and funding from 2019.
In the report, the independent panel chaired by Dr Philip Augar said: “We believe that there should be a stronger expectation that student contributions will be made once a financial benefit is secured. For students in degree-level education we therefore recommend that the most suitable threshold is median non-graduate earnings.
“In 2018-19 prices, this would mean reducing the threshold from £25,000 to £23,000,” they said at the time. “However, the panel would expect this change to be implemented … beginning in academic year 2021/22.”
This recommendation was later responded to in the government’s interim conclusion of the review in January this year, in which they said that the report “highlighted the significant, and growing, taxpayer subsidy in the higher education student finance system”.
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“It is important that the student finance funding systems remain sustainable and that those who benefit from their higher education should make a fair contribution. We intend to freeze the maximum tuition fee cap to deliver better value for students and to keep the cost of higher education under control.
“This will initially be for one year and further changes to the student finance system will be considered ahead of the next Comprehensive Spending Review,” they said.
While no change in the threshold has been officially announced by Downing Street, Twitter users have expressed their fury at the potential plans:
This is going to be the third retrospective change to the ‘contract’ I had with the student loans company.
— Aaron Bastani (@AaronBastani) September 26, 2021
someone pls let no. 10 know that currently there are no opportunities for those leaving lower education apart from uni and lets have a look at how the world would be without my 'soft' degree in design because it would be a vastly different place
— abs (@abigayall) September 26, 2021
What a surprise. Not. As if starting working life with £27k+ debt isn't enough, Tories now doing their level best to limit opportunity, restrain mobility & diminish aspiration. Is this how they're hoping to solve lorry driver, poultry processor & vegetable picker shortages?
— Simon Reynolds (@Wintonfellow) September 26, 2021
This will hit normal students from modest backgrounds- not students from privileged backgrounds who wont have loans. How is this levelling up??
— Harmonica #FBPA #FBPE #GTTO 🏴🇪🇺 (@NigelBenar) September 26, 2021
This government really doesn’t like young people, does it?
— Marged Sosban Fach #FBPA 💙🏴🇬🇧🇪🇺 (@Marged_SFach) September 26, 2021
They've really got it in for young people
— Michael Way (@8twisden) September 26, 2021
Kinda wild how the terms of a contract I signed nearly a decade ago have been changed so often since… 🙃 https://t.co/ja83PKCe5p
— Geri Scott (@Geri_E_L_Scott) September 27, 2021
Whatever you think of tuition fees and whether students get value for money, surely we can all agree that retroactively changing the terms of a contract to squeeze more cash out of a cohort that already suffer exorbitant interest rates is politically reprehensible https://t.co/Zu63nbOzJP
— Rachel Cunliffe (@RMCunliffe) September 27, 2021
NUS is totally opposed to any reduction in the repayment threshold, "the injustice is simply astounding" - our VP HE Hillary Gyebi-Ababio standing up for students and graduates in the Financial Times this morning ⬇️ https://t.co/JJOAnNcJtM
— NUS UK #NewVisionForEducation (@nusuk) September 27, 2021
Yet another attack on young people to finance the mistakes of a clueless government. https://t.co/wh5duSIhE8
— Kieran Galpin ✌🏻 (@kierangalpin2) September 26, 2021
Students hit by covid changes to their teaching (ie almost no face to face teaching) now facing retrospective changes to the terms of their borrowing. What a truly insulting way to claw a little (and make no mistake it is a *very* little) back https://t.co/QzGkxLTy89
— Hannah Fearn (@hannahfearn) September 27, 2021
I can only conclude some crack team of HMT civil servants have been assembled and given the task of working out innovative ways to add to the cost of living squeeze. https://t.co/5gtvrmECbr
— Duncan Weldon (@DuncanWeldon) September 26, 2021
Obscene. Effectively generational warfare: punishing the young to fund the old. https://t.co/N5MngDW0Wx
— Ian Dunt (@IanDunt) September 26, 2021
cost of living crisis latest:
— Jim Pickard (@PickardJE) September 26, 2021
- government is planning to cut the earnings threshold at which graduates begin repaying student loans
- in a bid to save the Treasury money and push more young people towards cheaper vocational education.https://t.co/AJNfLqehoa
But it’s OK for future graduates to be paying very high marginal tax rates,
— Chris Giles (@ChrisGiles_) September 26, 2021
because you’ll have the deep satisfaction knowing you’re keeping tax rates lower for baby boomers https://t.co/3XRLLGj06v
“virtually indistinguishable from a tax rise targeted at young workers alone”
— Stephen McGann💙 (@StephenMcGann) September 26, 2021
Surprise, surprise. https://t.co/nscw61mjzp
No, I'm sorry, this is not happening. No nation-state can prosper by squeezing its young workforce until the pips squeak. It's grotesque. https://t.co/F2QQu0czB6
— Glen O'Hara (@gsoh31) September 27, 2021
This is an appalling and unjustified assault on young people (and students of all ages), a betrayal and a breaking of the contract between students and the government. Absolutely shameful. Imagine if the Tories cut the state pension by £800 a year? https://t.co/qApH6jUtWJ
— Tim Farron (@timfarron) September 26, 2021
Sunak plans to reduce the threshold at which students start repaying their loans.
— Naomi Smith (@pimlicat) September 27, 2021
Said it before, this is a profoundly anti youth government. https://t.co/FQ2PNGhlHa
If the government were to go ahead with the plans, the move would be the latest change to hit pay packets, after controversial proposals to increase national insurance contributions to fund social care were supported by MPs earlier this month.
Responding to a request for comment, a No 10 official directed us to comments made by the prime minister’s spokesman on Monday.
“We’ve had the Augar review and we want to consider the recommendations by the panel and will respond later this year. We have a student loan system which ensures those with the talent and desire to attend higher education can do so whilst ensuring cost is fairly distributed,” he said.
