"Since the chancellor slapped a three-year freeze on the repayment threshold for Plan 2 loans at November's budget covering students whose courses kicked off in the decade following 2012 longstanding frustration about the system has erupted into full-blown fury. The personal finance guru Martin Lewis told Reeves recently: I do not think this is a moral thing for you to do."
"After the threshold freeze, the latest annual report on education spending in England from the Institute for Fiscal Studies (IFS) forecast that for the 2022-23 intake, for example, the long-run cost of issuing loans will be negative, with graduates repaying more than they borrowed. Once direct grants from the government to universities were included, the thinktank said, taxpayers would have funded approximately 3% of the cost of higher education for these post-Covid students, who would have to bear the other 97% themselves."
The student loan system in England and Wales is complex and creates heavy debt burdens for recent graduates. A three-year freeze on the Plan 2 repayment threshold was implemented at the November budget for students who began courses between 2012 and 2022. That freeze intensified longstanding frustration and prompted strong public criticism. IFS analysis forecasts that for the 2022–23 intake the long-run cost of issuing loans will be negative, with graduates repaying more than they borrowed. Including direct government grants, taxpayers would fund about 3% of higher-education costs for those post-Covid students, with graduates bearing roughly 97%. Under Plan 2, once graduates reach the earnings threshold set at £29,385 from April, they pay 9% of earnings above that threshold toward loans.
Read at www.theguardian.com
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