Government U-turn on early student loan repaymentsStudents can get out of student debt quicker

16 February 2012

money

Many students will be managing their own personal and household finances for the first time

The Government has announced that students will be free to repay outstanding student loans early, making it easier for graduates to clear their debts sooner.

Plans to prevent ex-students from overpaying loans have been scrapped, following a Government policy rethink. Initially, it was decided that early repayments would benefit better-off students, who could clear their debts early. 

However, the U-turn was prompted by fears that poorer graduates would suffer, as they would be trapped with debts for several years. 

Update: Which? has launched Which? University, a free and independent website to help students choose the best course and university for them. It also includes the latest information on student finance including tuition fees, student loans and bursaries and scholarships. 

University costs spiral 

The cost of going to university has been growing in recent years. Students in further education from this September will be charged up to £9,000 annually to study in England and Wales, with loans of up to £16,000 made available through the Student Loans Company to cover tuition and living expenses costs.

Repayments only start once a graduate earns more than £21,000 a year, at which time they will repay the equivalent of 9% of their annual salary. 

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