The Government has announced that students who start university in 2023/24 will have to start repaying their loans once they earn £25,000.

The decreased threshold for new students will be set at £25,000 until 2026-27.

The current salary a graduate must earn before repaying the loan is £27,295. 

A graduate earning £28,000 a year will pay back £17 per month, according to the Government. 

The repayment period has been extended from 30 years to 40 years for students starting courses in 2023. 

Bournemouth Echo: Pupils who fail GCSE English and maths could be blocked from student loans (PA)Pupils who fail GCSE English and maths could be blocked from student loans (PA)

The move comes after the Augar review recommended the extension of the repayment period and the lowering of the post-study repayment threshold. 

The Government response to the Augar review also announced a “clampdown on poor-quality university courses that don’t benefit graduates in the long-term”.

This means that students who do not gain grade 4 GCSE passes in maths and English, or two E grades at A-level, would potentially be blocked from accessing loans.

Education Secretary Nadhim Zahawi said: “Our country’s world-leading universities and colleges are key to levelling up opportunity by opening up access to a range of life-long, flexible post-18 options to help people train, retrain and upskill.

“This package of reforms will ensure students are being offered a range of different pathways, whether that is higher or further education, that lead to opportunities with the best outcomes – and put an end once and for all to high interest rates on their student loans.

“I am delighted to see such a substantial amount of investment – nearly £900 million – reinforced by a revised, fairer and more sustainable student finance system which will keep higher education accessible and accountable."

Bournemouth Echo: Education Secretary Nadhim Zahawi (PA)Education Secretary Nadhim Zahawi (PA)

The reforms would mean that more than half (52%) of students who take out a loan to start a full-time university course will repay this in full, while under 25% were expected to repay their loans fully if the changes did not go ahead, the Government said.

Tuition fees will be capped at £9,250 for a further two years, while student loan interest rates will be set at no higher than the rate of inflation from 2023/24.

University and College Union general secretary Jo Grady said the plans for minimum grade requirements for student loans were “an attack on working class learners and fly in the face of the levelling up agenda”.

“We saw during the pandemic that those from better-off backgrounds benefited most from grade inflation, with private schools gaming the system,” Ms Grady said.

She added: “Eligibility requirements threaten to make this situation worse, creating huge pressure on schools and colleges to inflate grades so that their students get into university, and further entrenching the divide between private and state schools.”