Authorities hikes pupil mortgage repayments by £150 a yr

The federal government is to hike pupil mortgage repayments by round £150 a yr in actual phrases, by freezing the reimbursement wage threshold.

The announcement means graduates with pupil loans will see more money taken out of their payslips each month – on prime of different deliberate tax and invoice rises.

Increased schooling minister Michelle Donelan mentioned the change would be certain the college funding system was offering “worth for cash for all of society at a time of rising prices”.

The announcement was made in a written assertion slipped out to parliament on Friday after MPs had gone residence from Westminster to their constituencies.

The observe is frequent for presidency bulletins the place ministers need to keep away from parliamentary scrutiny.

Beneath the adjustments the reimbursement threshold for plan 2 college students can be frozen on the earlier 2021-22 degree of £27,295 per yr, £2,274 a month, or £524 every week.

For plan 3 college students the edge may also be unchanged at £21,000 per yr, £1,750 a month or £404 every week for monetary yr 2022-23.

The thresholds freeze sits in opposition to annual inflation hovering to five.4 per cent in December.

Paul Johnson, the director of the Institute for Fiscal Research think-tank, mentioned the coverage announcement amounted to a “6 or 7 per cent actual phrases discount and therefore an actual phrases enhance in repayments of circa £150 a yr on graduates with pupil loans”.

The freeze will hit across the identical time as the federal government is planning to hike Nationwide Insurance coverage contributions and lift rail fares by document ranges – the latter linked to inflation.

It can additionally comply with a controversial minimize to Common Credit score and skyrocketing winter heating and power payments.

Saying the change within the written assertion, the minister Ms Donelan mentioned: “Sustaining the reimbursement threshold at its present degree, alongside the continued freeze in charges, will assist to make sure the sustainability of the coed mortgage system, whereas protecting increased schooling open to everybody who has the flexibility and the ambition to profit from it, together with probably the most deprived.”