Currently for most university students, tuitions are on average £9,000 a year, and most undergraduate degrees are a three (3) year programme. Yes, that adds up to £27,000, and we are still not factoring in housing, transport, food, etc.

Unless the student, or their family, has £27,000, most uni students take out student loans.

These student loans are considered by many to be a good investment, or good debt, an investment in the student’s future and future earnings.

And in many ways it is a good investment, but it is also a lot of debt.

One of the more attractive aspects about student loans is the repayment process, which has changed a little over the years, but presently works like this:

Until you earn more that £27,295 annually, you have no repayments to be made on your student loans.

Once you go over that threshold of £27,295, you pay back 9%, of the amount you earn over the threshold.

An example is this:

You earn £30,000 a year, which is £2,705 annually over the £27,295 threshold.

You then pay back 9% of this amount or £243.45, or £20 a month. (rounding down, or £21 a month, rounding up).

A pretty easy repayment system, low payments, but two issues here:

The solution….the government is considering lowering the income or earnings threshold to £25,000 a year, and some are seeking it even lower to £23,000, or possibly £20,000.

This will affect millions of graduates, and their loan payments will increase.

As to when this possible change will be voted on, and put into place, has not been stated.

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