Increase to the student loan deduction threshold from 2012Friday, January 21st, 2011
The Government’s reforms to higher education and student finance include proposals to increase the annual earnings threshold above which students are required to have their loans recovered by payroll deduction. The 9% repayment rate will not change, and all outstanding loans will be written off after 30 years.
The current £15,000 threshold was due for review by the last Government in 2011. The Coalition government has decided instead to increase the threshold annually between 2012 and 2016 in line with inflation. In April 2016, when most students who commence a three-year degree course in September 2012 will first become liable to make repayments, the threshold will be set at £21,000 and reviewed annually thereafter in line with earnings inflation.