November 15, 2024
Money blog: Queue ‘for miles’ as middle class status symbol goes on sale with 60% off | Money News #UKFinance

Money blog: Queue ‘for miles’ as middle class status symbol goes on sale with 60% off | Money News #UKFinance

CashNews.co

Tuition fees are set to rise for the first time in eight years, increasing by £285 a year in April – as announced in the budget.

The increase comes alongside a rise in the maximum maintenance loan, which will give students an extra £414 a year to help with living costs.

Fees were previously capped at £9,250 for students in England, and had been since 2017.

Who is affected?

The rise applies only to students studying in England (for now). These are the caps in each home nation:

  • Anyone studying in England will have a cap of £9,535;
  • If you are a Northern Irish student studying in Northern Ireland the cap will be £4,750;
  • Scottish students studying in Scotland pay nothing;
  • The Welsh government announced earlier this year that their cap would rise to £9,250 (effective September 2024).

There have been no additional announcements, except the Scottish government saying it remains committed to free education.

Could the price cap rise any further?

If the government does commit to raising the cost of tuition in line with inflation (which it has not yet), fees could hit £10,680 by 2029.

The education secretary has not said if there will be any further rises.

Will you face higher repayments?

Not necessarily.

Most student loans are taken out with the Student Loans Company and repayments begin only after you graduate and start earning above the threshold (which varies depending on which plan you are on – see below).

At the moment, if the loan is not cleared after a certain number of years (this again varies by plan – see above) then it gets written off.

(If you are wondering why there is no “Plan 3”, that’s because the repayment plan for postgrad loans in England and Wales is actually Plan 3, but it’s rarely labelled as such).

You will repay:

  • 9% of your income over the threshold if you’re on Plan 1, 2, 4 or 5
  • 6% of your income over the threshold if you’re on a Postgraduate Loan plan

The amount of student loan outstanding is £236bn – forecast to reach around £500bn by the late 2040s.

The government forecasts that around 65% of full-time undergraduates starting in 2023-24 would repay them in full.

This is more than double the forecast for the 2022-23 cohort (27% to repay in full) because of reforms to student loan repayments for new students.

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