Student Loans Repayment Threshold Frozen for Five Years

BBC News

The NUS says that if you got a loan after 2012 you would have expected to pay back 9% of everything you earn above £21,000 per year - until you have paid back the loan.

That £21,000 figure was meant to increase at the same rate as average earnings - which would have held off the pay-back date for many.

However the government has now frozen that figure.

This means that as average salaries rise, more people will be paying back loans sooner.

The NUS gives this example: "If you earn £25,000 and the threshold is £23,000, you repay £180 a year. If the threshold is frozen at £21,000, you pay £360 a year."

(Source was originally on BBC News but they've moved it over to their Newsbeat section: http://www.bbc.co.uk/newsbeat/article/34920886/spending-review-student-loan-repayments-explained)

What do you think? Will this put you off going to uni? Current students - are you annoyed that they've changed the terms of repayment after you've signed your loan contract?

:beard:

Reply 1

TheThiefOfBagdad

I plan to abscond to Cambodia or similar after my degree.
Good luck getting any money from me, George, you penny pinching ****!

Reply 2

Reue

Seems fair considering most public services and many companies have been on pay freezes for a number of years and inflation remains at record lows.

How much has the average salary shifted? And would it have made much of a difference anyway?

(edited 8 years ago)

Reply 3

Tiger Rag

Still higher than people on the older (pre 2012) loans.

Reply 4

Dez

Original post by Reue

I don't think anyone can actually agree what the average graduate salary is. Pretty much the only reliable source is HMRC and they don't release much data on what people earn. The upshot is that the government can pretty much set the repayment rate to whatever the hell they want, because nobody can contradict whether it's accurate or not.

Reply 5

chikane

So those of us on the old fees before 2012 will still be repaying the loan?

Reply 6

Tiger Rag

Original post by chikane

So those of us on the old fees before 2012 will still be repaying the loan?

I don't think anything has been announced about yours. I know it's somewhere around £17k for you.

Reply 7

Reue

Original post by OU Student

Still higher than people on the older (pre 2012) loans.

But we pay a hell of a lot less interest so a good chance of actually paying it off within a reasonable timescale. I've calculated mine to be paid off in the next 6 years.

Reply 8

Howard

Original post by Roving Fish

The Chancellor sort of announced, insomuch as it wasn't in his speech but was in the announcement, that he's going to freeze the repayment threshold for student loans, for 5 years.

This basically means that lower salaried graduates will pay back more of their student loans per month, because the threshold hasn't increased with average salaries.

According to the NUS:

(Source was originally on BBC News but they've moved it over to their Newsbeat section: http://www.bbc.co.uk/newsbeat/article/34920886/spending-review-student-loan-repayments-explained)

What do you think? Will this put you off going to uni? Current students - are you annoyed that they've changed the terms of repayment after you've signed your loan contract?

:beard:

Well, I think students need to give their head a shake and take a reality check because they will NEVER get another loan in their lives on such generous terms.

If anybody earning £25,000 thinks it's unreasonable to pay £360 (a massive 30 quid a month :rolleyes: