Students and unions have publicly challenged the recent government proposal to lower the threshold for student loan repayments to graduates earning over £23,000 from just over £27,000.

At present, graduates only begin gradually paying back their student loan once they are earning a minimum of £27,295 per year. A lower threshold would allow high-earning graduates to pay off their loans quickly, avoiding high interest rates, but would force lower-earning graduates into high long-term repayments.

The suggestion was made in the 2019 Augar review of student finance.

The proposal was suggested by former universities minister David Willetts and follows his introduction of increased £9,000 tuition fees in 2012, creating the current student finance system. 

Willetts stated that funding of universities should “not come at the expense of the taxpayer”, citing the rise of loan write-offs “from 28% [in 2012] to 53% today”.

The proposal aims to save the Treasury as much as £2 billion a year but experts have warned it will affect low earners and leave graduates paying an additional £400 annually.

Under this policy, the repayments of a graduate earning £30,000 a year would triple from £243 a year to £800 a year. 

Martin Lewis, the founder of Money Saving Expert, stated that the change would “hugely” increase what graduates pay, calling it “an absolute breach of natural justice”.

He also said that changes to the repayment plan would have to be overt so “prospective students and their parents can look at the real cost for them of going to university and decide if it’s worth it.”

Other suggested modifications to the student finance system made in the 2019 Auger review include extending the period of time in which to repay a student loan from 30 to 40 years and reducing tuition fees to £7,500.

Jo Grady, the general secretary of the University and College Union, said, “Lord Willetts, as the architect of £9k tuition fees, cannot claim to be concerned about the high levels of student debt while simultaneously proposing to hit lower-earning graduates with debt repayments.”