UNI graduates will have their student loan repayments upped by almost £500 a year.New Government plans to create a “fairer” system for taxpayers could see repayments raised by around an extra £2.5 billion a year.
1Grads face rising repaymentsCredit: Getty
Current rules say students only have to start paying back their loans when they start earning £27,295 per year.
But that figure could be dropped to £22,000 under the new plans.
Treasury bosses are expected to argue the new system is “fairer” because billions of pounds of uni debt is never repaid, and it is left to taxpayers to underwrite the cost.
A Whitehall insider told The Telegraph: “Normal working people, a lot of whom do not go to university and benefit from student loans, are paying for this.”
Details of the closely-guarded plans are expected to be announced in the coming weeks as part of reforms to student loans and fees.
Number 10, the Treasury and the Department for Education are all said to be pushing to drop the minimum salary threshold for repaying the pricey debts.
If the repayment was dropped to £25,000 – which is roughly the annual income – it could save the treasury a whopping £1.1 billion for each new year of students.
Reducing it further, down to £22,000, would save £2.7 billion.
But in 2017, Theresa May raised the threshold – arguing it would ease financial strain for recent grads.
According to estimates from the Higher Education Policy (HEPI) Institute think tank, the new plans will see grads repaying between £200 and £475 more per year on their student loans.
And Tory top brass are also said to be considering reducing interest rates on student loan debts, which the 2019 Conservative Party manifesto promised to consider, too.
It would mean some students could also be getting a fairer deal from the reforms, despite the higher repayments.
A Department for Education spokesperson said: “We remain committed to driving up standards and educational excellence across the further and higher education sectors so that everyone can gain the skills they need to boost their careers and boost the economy.
“As published in the Autumn Budget and Spending Review 2021, we will set out further details of the Higher Education settlement in the coming weeks. …