The threshold for Plan 4 loans is £27,660. However, these loans are generally smaller as the fees were not as high. It also affects all Northern Irish students who started university since 1998. This impacts all English and Welsh undergraduates who started university between 19. The threshold for Plan 1 loans moved to £22,015 this year. How do other student loan plans work around the UK? Last year, when the changes were announced, they were met with anger from many who make repayments, with some on social media accusing the government of moving the goalposts to ensure graduates paid more. The median salary in the UK is around £33,000, and someone earning £30,000 would still pay £243 towards their loan each year under the current system. They added: “It is important that we have a sustainable student finance system that is fair to students and fair to taxpayers.” Postgraduate students are on their own scheme, whereby they pay back 6 per cent of everything earned over £21,000 – with this threshold also being frozen last year.Ī Department for Education spokesperson said that student loans “protect lower earners and ensure those who benefit financially from higher education make a fair contribution towards its costs”. Those who started university before 2012 or are from other parts of the UK are on a range of different plans with different repayment thresholds. Last year was the first time since Mrs May’s changes that more than half of borrowers who have left university made repayments – with 55 per cent doing so, compared to 48 per cent the year before. Since then, the threshold has risen with average earning, until the freeze was implemented last year just as the cost of living crisis started to put a squeeze on household budgets. Once they graduated, they initially started paying back their loans when they hit a salary of £21,000 – though former prime minister Theresa May agreed to raise this to £25,000 in 2017. Those who went to university in 2012 onwards were the first to be hit by £9,000 university fees in England, with most of the first cohort to experience this now approaching 30 years of age. In the long-run, “this could be even more important for how much middle-earning graduates repay each year”. She said that even after the freeze ended, the Government planned to raise the repayment threshold much more slowly in future years – in line with the RPI measure of inflation, rather than average earnings. ![]() She said the Government’s plans meant a typical graduate earning £31,000 will have repaid £151 more in 2022/23 than if no freeze had been imposed – and this will rise to £331 by 2024-25. Kate Ogden, senior research economist at the Institute for Fiscal Studies, said the continued freeze “effectively constitutes a tax rise by stealth on middle-earning graduates”.
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