Students may have to pay back more of their student loans much earlier under plans being considered by Chancellor Rishi Sunak.
Currently, students start paying back their loan once they earn more than £27,295 a year.
But according to The Mirror the Government is seriously considering reducing that threshold to £25,295, reports The Mirror.
And according to the FT the Treasury has even considered a £20,000 threshold.
If students had to start paying back the cost of their education when they hit a £20,000 salary that would add £600 a year to their bills.
A source told the FT the plan is to lower the threshold in the Spending Review in October.
Under the current system, students contribute just 50% towards their education - with many loans never paid back.
A review in 2019, by Augur, said: “The current repayment threshold of £25,000 is higher than the median graduate salary three years after graduation of £22,80011 (2015-16 prices).
“And [it is] also in excess of the median earnings of all working age non-graduates which is around £23,000 (2017- 18 prices).
“We question the justification for a system which excludes so much of a borrower’s earnings from any repayment and which helps to reinforce the “no win, no pay” element in student choice.
“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.”
A Department for Education 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 continue to consider the recommendations made by the Augar panel carefully alongside driving up quality of standards and educational excellence and ensuring a sustainable and flexible student finance system.”
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