KU students concerned over new student loan repayment plan

Ongoing speculation around government plans to lower the salary threshold for repayment of student loans is causing distress among KU students, leaving them worried about their financial position after graduation.

An announcement was widely expected in last month’s budget following reports that Chancellor Rishi Sunak is keen to overhaul  student finance. 

“I think younger people face challenges of not being able to afford things like housing and the essentials to live on just a normal wage, let alone having to pocket out for student loan repayments,” said criminology student Lauren-Grace Cowlbeck.

As of now, those who have graduated from university start to pay back their student loans once they earn a salary of £27,295 but suggestions are that this threshold could be lowered to £23,000.

The move would save the Treasury money at a time when the government wants to push more young people towards vocational training, after which people often earn lower salaries.

Alex Goodsel, a digital business student, said: “Although I think it is a problem to let as many people go without paying off their loans, I think this decision is too drastic of a change as it targets people who will already be struggling to survive, especially in areas such as London where it’s more expensive.”

KU students feel disgruntled as this change is something they were not aware of when they decided to pursue a university education. There is frustration about what their income is going to look like after graduation, especially with the rise in National Insurance as well. 

In modelling for The Higher Education Policy Institute, carried out by London Economics, it was estimated that if the current system remains in place it will end up costing the government £9 billion in written-off tuition and maintenance loans for the 2020-21 cohort alone.   

Several students mentioned that they are concerned about what could happen after graduation. Criminology student Kian Aghapour said: “People who just graduate want to start their own life and become independent. Paying rent, paying bills for someone starting from scratch is already very difficult.”