Salary threshold for students to pay back loans frozen for year
THE INCOME level at which people are required to pay back student loans has been frozen for the coming year.
In a written update, Michelle Donelan, the Minister for Higher and Further Education, announced yesterday that the salary threshold for student loan repayments in England will be frozen at current levels of £27,295 per year, £2,274 a month, or £524 a week for 2022-23.
“It is now more crucial than ever that higher education is underpinned by just and sustainable finance and funding arrangements, and that the system provides value for money for all of society at a time of rising costs,” Ms Donelan wrote.
“This Government has already confirmed that we will freeze maximum tuition fee caps again for the 2022/23 academic year, the fifth year in succession that
we have held fee caps at current levels.”
Some experts said the freeze represents a real-terms £150 increase in the amount to be repaid each year. Writing on social media, Paul Johnson, director of the Institute for Fiscal Studies (IfS), said: “That’ll be a six or seven per cent real terms reduction and hence a real terms increase in repayments of (around) £150 a year on graduates with student loans.”
He added: “Not an obvious response to ‘cost of living crisis’.”
In September 2021, a former Conservative Minister said the earnings threshold should be lowered to tackle the “depressing experience” of student debt rising every year.
Lord Willetts, who oversaw an increase in tuition fees when he was Universities Minister, said at the time that a higher threshold “particularly upsets” parents of graduates who see their debt increase each year.
Nick Hillman, of the Higher Education Policy Institute, said: “Few students or recent graduates will welcome this announcement but it is sensible because the current system has become out of kilter, with taxpayers paying much more than originally planned.”