“Education costs money, but then so does ignorance” -      Claus Moser

 

There has never been more scrutiny on education and funding than in the recent five years or so. As we move forward in the current economic climate, everything is getting more expensive and less affordable and education and its funding is not immune from the rising costs.

Recently, there has been an official government announcement on changes to the graduate tuition fee and maintenance loans repayment. Only a quarter of graduates are currently expected to have repaid their loans in full within 30 years of graduation, under the new system 60% can be expected to have repaid the loans in full.

These changes would be applicable from 2023-24 with students having to:

  • Make repayment over 40 years from the current 30 year,
  • Start repaying 9% of their income once they start earning £25,000, down from the current £27,000 repayment threshold

 

Who would be impacted by these changes and how?

Analysis from IFS and Department of education show that the following would be negatively impacted by these changes:

  • Graduates on lower-middle earnings
  • Younger and female graduates
  • Students from the Northern England and Midlands will see their repayments rise in some cases by 150%

The following will benefit from these changes:

  • Taxpayers via Treasury - estimated to gain an additional £600m in loan repayments, substantially reducing the amount of unpaid loans that would expire after 30 years
  • Upper middle class and wealthy graduates, well-paid graduates will see their maximum loan repayments fall by more than 25%

 

This is the beginning with further changes on the horizon

Also, the Department of Education has published a consultation to restrict numbers on certain courses, and set minimum criteria for school leavers to qualify for student loans, such as requiring at least a grade 4 in GCSE maths and English as it is important to have reasonable level of numeracy and literacy for both post GCSE education, further training or apprenticeship.

What does the future hold for us students? Only time will tell if these changes are beneficial or detrimental.