The government has recently announced a plan to lower the repayment threshold and extend the repayment period for Student Loans in England.

For students starting in September 2023 and later, they intend to reduce the threshold from its current level (£27,295) to just £25,000, while extending the repayment period (currently 30 years) to 40 years.

These changes would have a negative impact on the lower- and middle-earning graduates of the future. A person in the latter group, in particular, could end up repaying over £10,000 more across their lifetime, while the highest-earning graduates could see their overall repayments drop by as much as £20,000 in some instances.

Compared to the current system, the proposed combination of a lower repayment threshold and a cap on interest rates (to just RPI, rather than the current RPI + up to 3%) means that the highest-earning graduates will not only accrue less interest on their debt each month, but repay over a shorter period too.

On the other hand, under the current system, middle- and lowest-earning grads are unlikely to fully repay their loans, and often won’t repay the amount they borrowed excluding interest. Starting repayments sooner and being committed to them for longer will inevitably cost this demographic more, and they’re far less likely to see any benefit from a cap on interest, beyond the psychological.

We explain the changes in much more detail here, but the key message is clear: if implemented, these reforms would be among the most regressive made to the Student Loan system yet.

We are urging the government to keep the repayment period at 30 years and continue to increase the repayment threshold each year in line with average earnings, as was the case until very recently.

Please sign our petition to encourage the government to reverse the decision to decrease the Student Loan repayment threshold and extend the repayment period.