Graduates will be able to earn £25,000 a year before they are required to make any payments against their student loan from the 2018/19 academic year, with annual fees being frozen at £9,250.
From April 2018, the repayment threshold will rise from its current level of £21,000 to £25,000, the Department for Education has confirmed. This change will apply to all students with a post-2012 loan in England.
At present, students must pay 9% of their salary above the threshold and this will remain the same after the changes.
A planned increase to the maximum yearly tuition fee in England has also been scrapped. The upper limit on tuition fees was set to rise by £250 to £9,500 per year from the 2018/19 academic year. This increase will no longer take place.
The announcements come as the Conservative party hosts its annual conference in Manchester. In response, the Labour party reiterated its promise to scrap tuition fees entirely if it gains power.
Education secretary Justine Greening says: “To help more young people access the widest choice of high quality education or training, the government has outlined additional support for university students.
“The government has announced that it will raise the earning threshold for student loan repayments from £21,000 to £25,000 – which could mean up to an additional £360 a year for thousands of graduates early on in their career. The government is also freezing tuition fees for 2018/19 at their current rate.”
No changes have been announced regarding the rate of interest students are charged on their loan. Students currently pay up to 6.1% in interest, depending on when and where they studied.
To find out exactly what you owe, visit the Student Loans Company’s repayment website.