The repayment threshold for Plan 2 student loans – thei ncome level above which post2012 student loan borrowers arere quired to make repayments – will remain at its current level of £27,295 per year for the next
financial year.
The government has also confirmed that the repayment threshold for Plan 3 student loans (postgraduate loans) will remain at its current level of £21,000 per year for financial year 2022-23.
Tuition fees will continue to be frozen at £9,250, helping to deliver a fair deal to current students. This is the fifth year in succession that fee caps have remained at the same level, saving a typical full-time student finishing a course in the 2022/23 academic year over £3,000 across a three year degree.
In brief, individuals with Plan 2 loans who earn over £27,295 will repay up to an additional £9.45 per month.
Overall, the cost of higher education to the taxpayer is rising, so the government wants to
ensure the student loan system is underpinned by sustainable funding arrangements so it provides value for money for both those who benefit from higher education and the taxpayer.
Higher education will continue to be open to everyone who has the ability and the ambition to benefit from it, including the most disadvantaged, and no student will have to start repaying their loan until they can afford to.
Median annual earnings for young graduates have risen from £24.5k to £28k over 2016-20, and in 2020 they typically earned £6.5K more per year than their non-graduate counterparts.
This update comes ahead of significant wider improvements to the post-18 system which will improve social mobility and help level up opportunities cross the country.
This includes the introduction of the Lifelong Loan Entitlement from 2025 – which learners will be able to use to support up to 4 years of flexible post-18 study throughout their lifetime – and proposed reforms
to tackle poor-quality higher education courses that offer poor job prospects for graduates
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