Jeremy Miles MS, Minister for Education and Welsh Language
The UK government has announced plans for the repayment thresholds for the financial year 2022-23. These include a one year freeze for the threshold for Plan 2 student loans, loans made on or after 1 September 2012, and maintaining the current threshold level for Plan 3 (postgraduate) loans.
This is one of the areas of the student finance system where there is very limited room for Wales to take an alternative path. While some parts of the policy are devolved in law, they are not devolved in practice. The practical implications arise because certain functions such as the mechanics of repayment through the income tax/PAYE system, and those that impose duties on employers, are not functions of the Welsh Ministers.
I am also very much aware that the decision taken by the UK government to freeze the threshold has been taken against the backdrop of the Augar Review proposing a reduction of the threshold – proposals the Welsh Government strongly disagrees with.
Where higher education policy is more clearly devolved, we continue to take action to ensure that we provide the most progressive student finance system in the UK. Welsh undergraduate students are able to apply for a generous living costs package, equivalent to the National Living Wage, ensuring the highest level of grant support is given to those students most in need. Wales also has the most generous postgraduate and part-time student support package, as a mixture of grant and loan, enabling students of all backgrounds to undertake postgraduate and part-time study.
Welsh graduates can also take advantage of a partial write-off of their debt when they begin repayment. The ‘partial cancellation scheme’ sees student debt reduced by up to £1,500 when they make an initial repayment. Welsh Government are the only UK government offering this scheme.
The plan for the repayment threshold for the 2022-23 financial year is as follows:
Plan 2 student loan repayment threshold
Since 2018, the repayment threshold for Plan 2 student loans (undergraduate student ordinarily resident in Wales or an EU student studying in Wales who begins their course on or after 1 September 2012) has increased each April in line with changes in average earnings. Under this policy, the threshold would be set to rise by a further 4.6% in April 2022.
However, I can confirm that the repayment threshold for Plan 2 students will remain at the current level of £27,295 a year, £2,274 a month, or £524 a week, for the 2022-23 financial year.
Postgraduate (Plan 3) student loan repayment threshold
I can also confirm the repayment threshold for postgraduate student loans will remain at the current level of £21,000 per year, £1,750 a month or £404 a week for the 2022-23 financial year.
The Welsh Government will continue discussions with UK government to consider the wider issues affecting students and graduates. We remain particularly concerned about the interest charged to students while they study and will continue to raise this issue as a matter of priority.