A “tax rise by stealth” led to university graduates in England and Wales making 20 per cent higher student loan repayments last year, figures obtained by i show.
Last year, the Government announced that it would be freezing the salary threshold at which student loan borrowers, who started university from 2012 to 2022 would start making repayments.
Government practice in recent years has been to increase the level at which higher education leavers start repaying their loan in line with average earnings.
This means that last April, the threshold for these students – who are on what are known as Plan 2 loans – should have moved up to £28,550 a year, However, the threshold has now been frozen at £27,295 per year until 2025.
Above this threshold, from the April after they leave university, people repay 9 per cent of their income. Figures released via a freedom of information request show that in the 2022/23 tax year, the average borrower in this situation paid back £914 – compared to £759 the year before.
