Written Statement: Student loan repayment threshold (15 February 2022)

Written Statement: Student loan reimbursement threshold (15 February 2022)

The UK authorities has introduced plans for the reimbursement thresholds for the monetary 12 months 2022-23. These embody a one 12 months freeze for the brink for Plan 2 student loans, loans made on or after 1 September 2012, and sustaining the present threshold degree for Plan 3 (postgraduate) loans.

This is without doubt one of the areas of the student finance system the place there may be very restricted room for Wales to take another path. While some components of the coverage are devolved in regulation, they aren’t devolved in observe. The sensible implications come up as a result of sure capabilities such because the mechanics of reimbursement by the revenue tax/PAYE system, and people who impose duties on employers, aren’t capabilities of the Welsh Ministers.

I’m additionally very a lot conscious that the choice taken by the UK authorities to freeze the brink has been taken in opposition to the backdrop of the Augar Review proposing a discount of the brink – proposals the Welsh Government strongly disagrees with.

Where greater training coverage is extra clearly devolved, we proceed to take motion to make sure that we offer probably the most progressive student finance system within the UK. Welsh undergraduate students are capable of apply for a beneficiant residing prices package deal, equal to the National Living Wage, making certain the best degree of grant help is given to these students most in want. Wales additionally has probably the most beneficiant postgraduate and part-time student help package deal, as a mix of grant and loan, enabling students of all backgrounds to undertake postgraduate and part-time examine.

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Welsh graduates may benefit from a partial write-off of their debt after they start reimbursement. The ‘partial cancellation scheme’ sees student debt decreased by as much as £1,500 after they make an preliminary reimbursement. Welsh Government are the one UK authorities providing this scheme.

The plan for the reimbursement threshold for the 2022-23 monetary 12 months is as follows:

Plan 2 student loan reimbursement threshold

Since 2018, the reimbursement threshold for Plan 2 student loans (undergraduate student ordinarily resident in Wales or an EU student learning in Wales who begins their course on or after 1 September 2012) has elevated every April according to modifications in common earnings. Under this coverage, the brink can be set to rise by an extra 4.6% in April 2022.

However, I can verify that the reimbursement threshold for Plan 2 students will stay on the present degree of £27,295 a 12 months, £2,274 a month, or £524 per week, for the 2022-23 monetary 12 months.

Postgraduate (Plan 3) student loan reimbursement threshold

I may verify the reimbursement threshold for postgraduate student loans will stay on the present degree of £21,000 per 12 months, £1,750 a month or £404 per week for the 2022-23 monetary 12 months.

The Welsh Government will proceed discussions with UK authorities to think about the broader points affecting students and graduates. We stay notably involved in regards to the curiosity charged to students whereas they examine and can proceed to lift this problem as a matter of precedence.