10) The method for calculating the Plan Type 2 deductions is the same as the current Plan Type 1 deductions except that a different threshold is used.
If you have any questions that you would like to put forward to the CSL forum please contact Samantha Mann via policy .
Student loans to replace maintenance grants 23 July 2015
Further details have been published regarding the announcement in the Summer Budget to replace student maintenance grants with loans for new full-time students in England.
From 1 September 2016 the student finance package will include a Tuition Fee Loan and a Maintenance Loan only.
Students will still be able to apply for grants if they’re eligible for certain benefits, disabled or need help with childcare costs .
Changes to the maintenance package will only apply to new students in England. They will not affect students starting courses from September 2015 onwards in the 2015 to 2016 academic year or those who are already at university. New full-time students starting in September 2016, whose family income is up to £42,620, will be able to apply from January 2016 for maintenance loans. The maximum amount of support will rise by £766 to £8,200 a year (up to £10,702 for those studying in London) and will apply to students with household income of less than £25,000 a year. Universities and other higher education providers will continue to offer a range of their own grants and bursaries with differing criteria. Students should always check with the institution they are planning to attend and find out what extra help they can provide.
Tuition fee loans for courses starting in September 2016 will remain. Most new full-time students will not have to pay up front, and graduates only have to repay their loans when they are earning above £21,000.
Freezing the student loan repayment threshold 24 July 2015
As announced in the Summer Budget the government are consulting on a proposal to keep the student loan repayment threshold at the same level for 5 years.
The government’s consultation details 2 options:
1. keeping the loan repayment threshold at £21,000 for all students from April 2016, or; 2. freezing it at the level it will have reached in 2020 only for new borrowers starting in academic year 2016-7 and repaying from April 2020.
The consultation states that the preferred option is to freeze the threshold for all plan-2 (post-2012) loans thereby changing the intention to raise thresholds annually in line with earnings.
The consultation will run for 12 weeks and members can expect a short survey asking for your views on the 2 options.
Option 1 The Government’s preferred option is to freeze the threshold for all Plan 2 loans, existing and new. The first borrowers with Plan 2 loans start to repay under statutory terms in April 2016, when the threshold will be £21,000. Under this proposal the threshold will remain at this level for five years, for all English borrowers – new and existing. The threshold will be reviewed from April 2021. This option will reduce government debt the most whilst still ensuring those who do not earn high wages are protected. This is the option that makes the largest savings. It will still ensure that higher education is free at the point of use, and that repayments are affordable for all graduates.
Option 2
CIPP Policy News Journal
25/04/2016, Page 429 of 453
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