The Government has announced major changes to its Student Finance system in England, which includes lengthening the period of repayment and lowering the repayment threshold.

Students will now have to pay back their loans over 40 years instead of 30, and the repayment threshold has been brought down from £27,295 to £25,000 from 2026/27.

The repayment threshold for Plan 2 loans will be frozen at £27,295 until 2025. This means that students on Plan 2 loans, those from England and Wales who started university in or after 2012, including current students, will pay back thousands of pounds more

Additionally, changes will also see the student loan interest rate cut to the Retail Price Index (RPI) rate of inflation for students starting courses from 2023/24, while tuition fees will be frozen at £9,250 for another two years.

Bournemouth Echo: University graduates will now have to pay back loans potentially into their 60s (Canva)University graduates will now have to pay back loans potentially into their 60s (Canva)

Information collated by the Money Saving Expert website also said these reforms only apply to those starting University from September 2023 and that interest rates will be set at RPI for all.

Currently, the interest rate is between RPI and RPI+3% for Plan 2 students and leavers in England.

The measures are part of a long awaited Government response to an independent review of the higher education system by the banker Philip Augar in 2019.

According to BBC News: "The government is proposing these changes because more students than ever are going to university - but only 25% of those who started full-time undergraduate degrees in 2020 are expected to pay back their loans in full."