University students across the country are set to face a sharp increase on loan repayments as the cost of living continues to grow.
Speaking with students from both Nottingham universities, many were completely unaware of the tax, whilst others believed it was inevitable.
Harry Taylor, a third-year economics student from Nottingham Trent University said: “I didn’t have a clue to be honest. I am quite shocked that they would do it, especially without being told properly.”
Many other students had a similar standpoint, saying they were not given sufficient information about the steep repayment increase.
University of Nottingham student, Jess Simpson said: “I don’t really understand how they can continue to boost up our repayments. We have already been given a higher amount to repay than when we started so this is just getting ridiculous”.
Millions of young graduates will be required to pay more on their student loans from next year in a government announcement who called it a tax rise by stealth.
Young graduates earning £30,000 per year could be asked to pay £113 more on top of their current repayments.
The move has sparked outrage as the living costs for people recently out of university will be incredibly high, and in some cases, completely unaffordable as the price of energy, water and food costs have increased.
Benjamin Stirling, a Nottingham Business School student said: “Yes I did read about it somewhere but didn’t take much notice because the article didn’t really say much.
“I’m not too surprised though, since being at university, I always thought the government would push-up the repayment percentage.”
The consensus from students around Nottingham is that of a lack of trust and general disappointment, however, a few believed it was the right move.
Annabelle Gears, a student at the University of Nottingham who said: “if I am being completely honest, we’re probably one of the better people to tax as we still won’t repay a huge sum in comparison to our wage and that’s still only if we’re over the threshold.
“The general public have had huge tax rises and since COVID, there needs to be some way to pay this money, I don’t mind if we were to be charged more, I just wish it was told to us directly.”
Postgraduate repayments are not set to change, with a freeze being set at £21,000 and the increase only comes from people who took a loan out after 2012.
Finance expert Ben Waltmann, a senior research economist at independent research institute (IFS) said: “This will be a further hit to the real incomes of these graduates on top of the rising cost of living, the freeze in the personal allowance, and the hike in National Insurance rates.”
However, the overall understanding from many students is the lack of understanding over the stealth tax rise, something most were not happy about and believed should have been informed better by the government.
The repayment threshold currently sits at anything earned over £27,295 which will be paid back over the course of a student’s life, before the debt is wiped out after 30 years.