Unpaid loans to university students in Wales will continue to be written off after 30 years, the Welsh Government has confirmed, even as England extends the repayment period to 40 years. However education minister Jeremy Miles said reform had not been ruled out in future.
Mr Miles said Wales had opted to retain the “fairer” 30-year repayment period, but did not rule out changes in future years, saying the 30-year timeframe would be reviewed annually to ensure it was sustainable. Mr Miles said paying back student loans over 30 years was fairer on lower earners and Wales will retain “our current fairer and progressive student finance repayment system, despite changes made in England”.
For English students the length of the loan will be increased to 40 years for new borrowers starting courses from September 2023. Wales’ student support repayment system has historically been aligned to England’s, but adopting the new English system would mean Welsh students would repay loans over a longer period of time, with higher earners paying less and middle- and lower-income earners paying back more than at present, he said.
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Last year the Welsh Government had originally decided to temporarily retain the current student loans system for the academic year to assess the changes being made in England.
It has now decided to retain the current 30 year period, but admitted it would be “subject to annual review to ensure it remains sustainable”.
“The current progressive system of student finance means that Welsh undergraduate students have less to repay on average than their English peers as we continue to provide non-repayable grants and they receive a guaranteed level of maintenance support irrespective of their household income,” the Welsh Government said in a statement.
Mr Miles added:“The UK Government’s regressive reforms benefit the highest earners and worsen the position of middle and lower earning graduates. Though Wales’ repayment system has historically been aligned to England’s, my view is that the new system in England is not a good deal.
“The reforms benefit the highest earners and worsen the position for middle and lower earning graduates. Women are also disproportionately affected. We certainly shouldn’t be asking teachers, nurses and social workers to pay more, while the highest earners pay less.
“I can therefore announce today that we will not move to the system adopted in England but will retain the current system. This means Welsh graduates will continue to repay loans for a 30-year repayment period rather than 40-years as will be the case in England.”To get our free daily briefing on the biggest issues affecting the nation, Wales Matters, click here
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