Relief for low-earning graduates as tuition fee repayment threshold jumps to £25,000


Recent university graduates have been given some much-need breathing space after it was announced they will not have to start repaying their tuition fees until their annual salary reaches £25,000.

The previous level was fixed at £21,000, meaning many graduates on salaries at or just above that threshold were struggling to make ends meet once their repayments were deducted, as the cost of living is remains so high (especially in big cities like London).

If you’re a graduate earning less than £25,000, effectively, this change will buy you time at the start of your career – as your repayments will only start when you are feeling a little bit richer.

Reaction to the news – which came alongside a freeze in tuition fees at £9,250 per year – was mixed. Martin Lewis, the personal finance guru who has challenged the government over its previous decision to fix the £21,000 level, said he was “delighted” with the changes which have come as a result of the ‘bloody nose’ young voters gave the government in the form of this year’s General Election result. 

But Andrew Adonis, the Labour peer who campaigned over the summer for drastic revisions to university funding, said the government’s move to increase the repayment threshold – and freeze tuition fees at £9,250 – didn’t go nearly far enough to fix the structural problems with the way university is financed in the UK, and whether students are getting value for money.

Critics also pointed out that the change also fails to help many graduates with student loans dating from before 2012, with those who took out loans when tuition fees were about £3,000 having to repay their loans at similar rates to those on £9,000. A threshold rise to £25,000 for post-2012 students would see those who took out loans at £3,000 making higher repayments than more recent graduates earning the same income.


Are you happy the repayment threshold has been raised – or do you still think not enough is being done to help young people manage and repay their debt, after graduation? Have your say below…

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