The Government announced last week that for students starting university from next year, the repayment term for loans will be extended from 30 to 40 years after graduation, and the income threshold at which loan repayments begin will be lowered from £27,000 to £25,000.
According to the Institute for Fiscal Studies (IFS), the repayment threshold will be frozen at £25,000 until 2026-27 and then indexed to the inflation rate rather than average earnings.
It has warned the changes will hit ‘middle and lower-earning graduates the hardest’, while Philippa Thompson of the Early Childhood Studies Degrees Network says the move could create a two-tier system, with students from low-income families reconsidering whether they want to go to university.
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