The changes overall come in 3 main ways:
1. Earlier repayments
2. Paying off for longer
3. Lower interest rates.
According to money expert Martin Lewis, these changes mark a shift in the way we as a country are looking at student loans:
"We are moving money out of the taxpayer-funding education, and the individual will contribute a lot more, which is what will work in practice as a
9% graduate tax above earnings of £25,000 for 40 years for most people."
So, what does this all mean for you? In this blog
post, we will delve into the key details you need to know.
Revised Repayment Structure
Under the new system, the method of repayment will be altered. Previously, graduates were required to pay back 9% of their annual income exceeding £27,295. However, the revised repayment structure mandates that the 9% repayment applies to any earning surpassing £25,000.
To put that into perspective, here's an example:
Currently, if you earn £30,000 annually, your student loan repayment would amount to £243 per year. However, with the implementation of the new system, this repayment would increase to £450 per year.
Consider Your Options
Given these changes, it's important for prospective students to carefully assess their options and determine whether pursuing a university education is the most suitable path.
There are alternatives to gaining a degree, such as a degree apprenticeship. This would allow a person to gain the education they require and get paid to do so. Both their degree and additional training would be paid for by their employer/the government as they gain hands-on experience, further their education and receive a wage.
Take time to consider the options when choosing an opportunity that best suits you. Weigh the potential benefits and costs associated with each path.
Rather than perceiving your student loan as an overwhelming financial burden, it is advisable to adopt a different perspective. Consider viewing it as a form of progressive taxation that ultimately gets wiped out after a certain threshold is reached. This shift in mindset can help alleviate concerns about the long-term impact of the loan and encourage a more optimistic outlook on managing your finances as you embark on your educational journey.
As a university fresher in 2023, it's important to understand the changes being made in England.
Familiarize yourself with the revised payment structure and consider alternative paths.
Remember it's important to view a student loan as a 'tax' that will eventually be wiped out, rather than a massive loan that will financially cripple you.
Stay proactive and prepared as you embark on your educational journey, making sure your financial choices align with your long-term goals.
If you'd like to learn more about alternative routes into education why not chat with one of our Ambassadors?
Please read it carefully and click the button below to confirm that you understand the changes.
GetMyFirstJob offers you a whole new way to find Apprenticeships, Degree Apprenticeships, Work Experience and Graduate opportunities to get ahead. It’s not just a search tool – we’ll connect you with the Best Employers, Colleges & Providers and Universities to get you on the right track faster.