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The changes to student loans and what it means for you

Here are the changes to student loans explained


The dreaded word of inflation is unfortunately something we’re all having to deal with at the moment. Whether you’re a student, a full-time worker or someone who’s lucky enough to be retired, there is no doubt that life is becoming ever-the-more expensive.

Changes to the iconic meal deals in Tesco :’(

However, this inflation comes with a lot of loose ends, one of which being a fairly big shift in the student loan scheme. You may have seen there are changes happening to student loans, but what do they actually mean? We have it all for you here.

Currently, if you earn less than £22,015 per annum (before tax), you do not have to pay back the loan.

This figure is being increased to £25,000, which doesn’t seem like a drastic change on the surface, but this is only one of the changes the government are making.

A further change the government are inforcing is that people who attend university will be paying extra money back on their loan – on top of tax – meaning that there’s essentially a tax onto a tax.

What is happening is that you effectively pay an extra nine per cent tax on your income for the restof your working life. At current rates (not including National Insurance) here’s a brief diagram to explain these changes.

What You Earn If you went to uni If you didn’t go to uni
£0-£12,570 No tax No tax
£12,750 – £25,000 20% 20%
£25,001 – £50,270 29% 20%
£50,271 – £125,140 49% 40%
Anything above £125,140 54% 45%

Essentially, what is happening here is that people who go onto higher paid jobs after uni will have to pay more tax, hence the increase to student loans is basically just an increase to tax you may pay. The more money you earn post uni, the more tax you’ll be paying – almost tax on top of tax – and potentially giving away more than half of your income should you fall into that category.

In theory, there are two sides when it comes to student loans. There’s the tax payer and the indivudual, and with these changes, the onus is weighing much heavier towards the individual.

This could result in students paying up to “50 per cent more” than before, per well-known money expert Martin Lewis.

Speaking to The Tab Glasgow, some students who’ll be starting university in September 2023 have made their feelings clear.

”I mean, it’s as if my family don’t already pay enough tax. It’s literally punishing people for going to uni.

“Now because I’ve went into higher education in order to greaten my chances of employment, I’m going to have to pay more money whilst everyone else before can keep an extra seven or so percent? Does not make any sense to me.”

”In all honesty, I didn’t really get it at first,” said a student who’ll be starting a degree in international business at the University of Glasgow this September.

”I’m not surprised though, the government just let these millionaires and billionaires live tax free yet people like us – students, who already are running thin on funds – are going to be draining the bank so that Rishi can do up his Westminster penthouses.”