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New students starting at English universities this month might set off on intellectual or career paths, friendships or romantic attachments lasting a lifetime. Also lasting the best part of a lifetime could be their contribution to the funding of the English higher education system, as they get the first instalment of student loans with new, significantly altered terms and conditions.

The important impact for individuals from the changes made by the government for students starting this year – extending the repayment term from 30 to 40 years, lowering the repayment threshold and getting rid of real interest rates – has been widely discussed and widely described as “regressive” in lowering the costs higher-earning graduates would have faced under the old system while raising them for lower-middle and middle earners.

But less widely discussed is how the changes affect who pays what in funding England’s higher education system.

In announcing the changes in February 2022, the Department for Education said they would “lead to significant savings” – for the government.

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