A number of student loan changes are coming into force from September 2023 with the introduction of a new “Plan 5” repayment scheme.
The Department for Education (DfE) has confirmed that the maximum Plan 2, Plan 5 and the Postgraduate loan interest rate will be 7.3% between 1 September 2023 and 30 November 2023.
At present, graduates (in England) start repaying student loans once they earn over £27,295 p.a. Any outstanding debt is written off 30 years after they start repayments. For those starting courses from September 2023, the repayments will start when earnings are over £25,000 and the repayment term extended to 40 years, meaning students could be repaying the loan for nearly all their working life!
The interest rate on loans will also be reduced, but the repayment will remain at 9% on any income over the thresholds.
New loan repayment examples –
| Salary | Loan repayment |
| £26,000 | £90 p.a. (9% of £1,000 excess) |
| £50,000 | £2,250 p.a. (9% of £25,000 excess) |
