The cost of university will double for many students under huge changes to how graduates pay back their student loans.
The new system will apply to any students starting university in September 2023. Under the current system, graduates start to pay their student loan back once they earn above £27,295, paying 9% of anything above that towards their loan, however, the new system has lowered that pay threshold.
Under the current system, graduates pay back their loan until it is fully paid, or after 30 years, whichever comes first, but that deadline has now been extended under the new system.
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New students starting in September 2023 will pay back 9% of their salary above £25,000 instead of £27,295, and will pay their loan back until it is repaid, or after 40 years, whichever comes first.
The Money Saving Expert said: "In practical terms, that means most new starters from 2023 will be repaying the loan for pretty much all of their working lives, until they hit retirement. I think there will be many cases of people under the new system paying double what they would have paid under the existing system."
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However, he did also say there was one positive change to the system. The current interest that is added to students' loan account is inflation, plus 3% while you're a student, and in the new system it is just inflation. He said: "When you add all these changes up together to see is it better is it worse, there's an easy stat that tells you the change.
"Under the current system, for every pound of funding in higher education for an individual student through the loan system, the student will pay 56p back and the government will pay 44p of it. Under the new system, the student will pay 81p in the pound, and the government will pay 19p.
"Under the current system, only 23% are likely to clear in full, under the new system, and this is a raw estimate, 52% are likely to clear in full, so more people will clear their loan in full, which means it will be more worthwhile to pay upfront."
These changes only apply to new English students starting university in September 2023, so students already at university will not see a change to their loan.
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