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The Westminster government’s changes to student loans in England “make the system less progressive” and may be inconsistent with the levelling up agenda, while it should have conducted a consultation given the magnitude of the changes, according to a House of Lords committee.

The Department for Education has introduced a series of changes affecting new borrowers from September: lowering the loan repayment threshold to £25,000 from just over £27,000, extending the repayment term to 40 years from 30 , and lowering interest rates so loan balances increase only with the retail price index (RPI) measure of inflation. Student finance experts have described the changes as benefiting the highest earning – predominantly male – graduates.

Plus, the DfE also delivered what the Institute for Fiscal Studies called a “massive retrospective change” hitting existing borrowers, in particular “lower middling earners”, for up to £19,000 over their lifetimes by switching to index the repayment threshold on the basis of RPI inflation instead of average earnings.

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