Creditors and graduates alike will benefit from a rise in earnings threshold for graduates for student loan repayments.

Student Loan Repayment Threshold Raised

Good news for young lenders and young borrowers alike. Students with loans post 2012 only requiring repayment if earning above £25,000 a year. This is an increase from the previous £21,000. The change, welcomed by borrowers and lenders, eases the financial burden post education.

students in class

A "welcomed relief"

Of the change, the National Union of Students (NUS) feels it is a positive step in the right direction. Speaking on behalf of the NUS, Vice President for Higher Education, Amatey Doku praised the changes.

Doku said

This change will be a welcome relief for many of the lowest-earning graduates. In recent years the expected repayment for the lowest-earning graduates has increased by 30%

Government Minister Sam Gyimah also weighed in. Gyimah told press

There are more 18-year-olds than ever before attending uni. This includes the highest ever number from disadvantaged backgrounds. We want to give these students a fair deal, both during their studies and afterwards.

It will benefit hundreds of thousands of graduates in the next financial year alone. In the years to come however, it will benefit millions.

Post education borrowing

The change also helps ease fears from lenders offering credit to graduates. In particular, it eases concerns over low earning graduates. Common credit sought after graduation includes car PCPs, rentals, house purchases and personal loans. With less worries regarding student loan repayments, graduates will have added financial security.

With 600,000 set to benefit over the following year alone, it provides stability for recent graduates. For some, the changes save up to £360 a year. The threshold for pre 2012 loans is also rising with inflation at 3.1%. Pre 2012 loans now require repayment only after a graduate earns £18,330.

The key to “good debt” is consistency. A ‘good’ debtor has the facility to pay regularly. A creditor must have confidence that their debtor can pay. With the student and graduate market, this is often difficult. The changes can and should ease some pressure on creditors. Graduates may now be in better positions to be prime lenders faster.

Good practice

As debt collectors, the changes should positive impact our industry. Young borrowers and graduates often find debt a difficult balance in the earlier stages of their career. Raising the threshold provides a small relief but enough to ease a number of concerns month to month. We pride ourselves on attentive, efficient service. Knowing students are in a better financial position, we can work with them if they are a debtor. The biggest aspect of our service is to find repayment packages suiting all parties.

If you are a creditor struggling with non paying debtors, be they graduates or other, contact AYOM. We provide your best chance of recovering your money. Unpaid invoices, unpaid rent and personal debts are all covered by our services.

For further information you can check out our services page. To get in touch you can send us an email to You can also call us Monday to Friday from 9am to 5pm on 0800 130 3357. Choose AYOM and have the best chance of recovering your money.

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