Freshers’ debt will not be written off until 40 years after they graduate
Undergraduates who begin their studies this autumn will be the first generation to face repaying their student loans until after they retire, analysis shows.
This year’s freshers will be the first cohort to take out the Government’s new “Plan 5” loans, meaning that their debt will not be written off until 40 years after they have graduated, as opposed to 30 years previously.
The same cohort will also have to begin paying their loans off earlier. While current graduates must start paying their debt back once they start earning £27,295 a year, students on Plan 5 loans will need to start their repayments once they are on a salary of £25,000.
These changes mean that most graduates will make repayments past the Normal Minimum Pension Age of 55, while those who leave university in their mid or late twenties could be left making repayments past the current State Pension age of 66.