Martin Lewis has called the changes to education loan repayments a “lifetime tax on graduates” that will affect people well “into their 60s”.
Students starting university courses in 2023/24 will need to start repaying their loans once they have earned more than lb25,000, the federal government has announced.
The threshold for new students starting courses is going to be set at lb25,000 until 2026-27, while the current salary threshold for student loan repayment is lb27,295.
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The government said this would mean a graduate earning lb28,000 would repay lb17 per month.
Interest rates will disappear for new students to ensure that their loan balance increases with the rate of inflation.
The student loan repayment term may also be extended to 40 years for students starting their studies in September 2023.
The reforms indicates more than half (52%) of students who take out a loan to start a full-time university course will pay it back in full, while less than 25% would need to repay your finance in full when the changes go wrong. in the future, the federal government said.
But MoneySavingExpert founder Martin Lewis said the alterations would see graduates repay their loans “until their 60s”.
Martin said: “The plans will see most university graduates pay much more for his or her degrees over their lifetime than they do now.
“It effectively completes the transformation of student 'loans', for the most part, right into a tax on graduates throughout working life.
“The decision to increase repayments to age 40, combined with the other measures, leaves the majority of people who start college straight after school paying it back into their 60s.”
He added: “Since 1991, the price of higher and better education has effectively been split between your individual and the state.
“Now the pendulum will once more swing sharply for the individual, who will pay much more for his or her education. The government's own data shows that the state's contribution to student loans will drop from 44 pence a pound to 19 pence under from the new system.
“So for anyone finishing school this season and considering going for a gap year to start in 2023, it's really worth considering. For many, starting this year could save you a lot of money. in your professional life in relation to the adjournment.”
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