- University students in England will encounter significant changes to student loan regulations.
- Alterations include repayment thresholds, loan duration, and interest rates.
- These changes could impact the financial feasibility of pursuing higher education.
Students embarking on university in England this year will encounter significant changes to the student loan system, raising concerns about the financial viability of pursuing higher education amidst a cost of living crisis. The combined expenses of tuition fees and accommodation vary across the UK, with England being the most expensive at £49,887, followed by Wales (£45,494), Northern Ireland (£32,091), and Scotland (£27,775).
Tuition fees also differ among nations, with England charging £9,250, Wales £9,000, Northern Ireland £4,710 for its students and £9,250 for others, while Scotland offers free tuition for most Scottish students and charges £9,250 for other UK students.
Accommodation costs depend on whether students reside in university-owned or private accommodation, with significant variations between regions. For instance, average rent for university-owned rooms in London is £7,546 annually, while the overall England average is £6,471.
Most UK students rely on student loans, consisting of two components: tuition fee loans and maintenance loans. Eligibility and repayment rules vary across the UK, and the amount received depends on the student’s family income. Interest is charged on the total loan from the moment it is taken out.
Starting from September 2023, students in England will repay 9% of their earnings above £25,000, with the repayment period extended from 30 to 40 years. The interest charged will be equal to the retail price index (RPI) measure of inflation, thereby preventing students from repaying more than they borrowed, adjusted for inflation.
Financial assistance beyond loans is available in Wales and Northern Ireland, with maintenance grants that are not repaid. Graduates can expect to earn more than non-graduates, but the difference in earnings has decreased over time, with subject studied and university attended influencing potential earnings.
While university education can help students from lower-income backgrounds achieve higher earnings, only a fifth of those eligible for free school meals make it to the top 20% of earners, compared to almost half of graduates from private schools, according to research by the Sutton Trust in England.