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<p>The government has frozen tuition fees for academic year 2018/19 and for financial
year 2018-19 has raised both the repayment threshold and the thresholds at which variable
interest rates apply to borrowers in repayment.</p><p> </p><p>The repayment threshold
will rise from £21,000 to £25,000 for the 2018-19 financial year (from 6 April 2018).
Following the threshold change, interest will be charged at RPI for those earning
below £25,000 (compared to £21,000 before) and at RPI+3% for those earning above £45,000
(compared to £41,000 before), with interest applied on sliding scale for those earning
between those two thresholds.</p><p> </p><p>The estimated impairment of student loans
(RAB charge) is included in the Department for Education (DfE’s) accounts as non-cash
ring-fenced Resource Departmental Expenditure Limit. Following the recent change to
the repayment threshold for post-2012 loans, these estimates will increase due to
the change in the RAB charge for higher education loans from around 30% to between
40% and 45%. We do not expect this change to have any impact on the rest of DfE’s
budget. Future budgets will be set as part of the annual Estimates process and confirmed
in the published Estimates documents.</p><p> </p><p>The cost of the system is a conscious
investment in young people. It is the policy subsidy required to make higher and further
education widely available, achieving the government’s objectives of increasing the
skills in the economy and ensuring access to university for all with the potential
to benefit.</p>
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