The government today announced a major overhaul of higher education that includes a commitment for students to repay loans for 40 years instead of 30.
It is predicted that only a quarter of students entering full-time undergraduate studies in 2020/21 will repay their loans in full.
The amount of outstanding student loans at the end of March 2021 reached £161 billion and is projected to rise to half a trillion pounds by 2043.
The student loan interest rate will be reduced to RPI + 0% for new borrowers starting courses from 2023/24.
BASC advocates for pest control against lawsuit
BASC Welcomes Habitat Management Course Review
Combined with the ongoing tuition freeze announced earlier this month, a student entering a three-year course in 2023/24 can reduce their debt by up to £11,500 the moment they become eligible to pay it off.
The cap on tuition will be frozen at £9,250 for another two years through 2024/25, further reducing the real cost of tuition for students.
The repayment threshold – the point at which graduates start paying off their student loan – for new borrowers starting courses from September 2023 will be set at £25,000 through 2026-27.
Student loan repayment terms will also be extended to 40 years for new borrowers from September 2023 to encourage more students to repay their loan in full, taking into account the fact that people are now working and earning longer.
Education Minister Nadhim Zahavi said: “Our nation’s leading universities and colleges are playing a key role in raising the level of opportunity by opening up access to a range of flexible lifelong options after age 18 to help people learn, retrain and improve their skills.
“This package of reforms ensures that students are offered a range of different paths, whether undergraduate or further education, that offer opportunities with better outcomes and end their high interest rates on their student loans once and for all.
“I am delighted to see such a significant amount of investment – almost £900m – backed by a revised, fairer and more sustainable student funding system that will keep
“Higher education is accessible and accountable. These changes will create a fairer system for both students and taxpayers.”
The government also published two consultations. The first will seek opinions on how to ensure that young people are encouraged to follow the path that is right for them and get a fair price for their investment if they decide to go to university. This includes considering the introduction of minimum eligibility requirements.
The second will set out plans to provide eligibility for a Lifetime Credit (LLE) worth the equivalent of four years of study after age 18 (i.e. £37,000 in today’s fees) to help students learn, train, retrain or improve their skills in any stage of their education. lives through flexible and modular courses.
Commenting on the proposals, David Robinson, director of Post 16 and Skills at the Education Policy Institute (EPI), said: “We welcome the government’s plans to introduce lifetime credit eligibility. Providing adults with opportunities and support for further education and retraining is likely to benefit not only their personal income, but the economy and the labor market as a whole.
“However, we believe that the government should be cautious about the proposed reforms of funding and access to higher education. Proposals to introduce minimum entry requirements for students should be carefully considered by the government, along with an assessment of the impact on disadvantaged and underrepresented groups.
“Existing UCAS analysis suggests that these changes may most affect students from low-income families, black students, and students from parts of the North and West Midlands. Many of these students, who will go to universities in the next few years, will also face significant learning losses as a result of the pandemic.
“Currently, students who do not score 4 in English and Mathematics at the GCSE may have limited access to Level 3 courses, including T levels. This in turn means it is more difficult for them to get two E’s. at level A (or equivalent). Therefore, it is important for the government to consider whether contextual factors such as student experience or academic losses should be taken into account when applying for student loans. Importantly, the government must also provide resources to support schools to ensure students from more disadvantaged backgrounds meet these minimum entry requirements.
“The government must also consider the impact of minimum entry requirements and student enrollment controls on certain courses to ensure that these proposals do not jeopardize certain industries, especially creative skills.”