Jeremy Miles MS, Minister for Education and Welsh Language
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. I made a statement on 15 February to announce a one-year freeze to the repayment threshold for Plan 2 loans for 2022-23 financial year.
On 24 February, the UK Government announced plans to reform the higher education student support system, as a response to the Augar review, and included the announcement of a further two-year freeze to the Plan 2 repayment threshold at the current level of £27,295. I made a statement on 20 October to announce the Welsh Government will not adopt the new reforms that UK Government will be implementing for academic year 2023/24. I confirmed that Welsh borrowers will remain on the current system for a further year.
This does mean, in line with the announcement for English borrowers, that the repayment threshold for Welsh Plan 2 borrowers will remain at the current level of £27,295 for a further two years, until April 2025.
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.
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 have less to repay on average than their English peers as they are able to apply for a generous living costs package of grants and loans, equivalent to the National Living Wage. The highest level of grant support is given to those students most in need. Wales also has a substantial part-time student support package, as a mixture of grant and loan, enabling students of all backgrounds to undertake 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. The Welsh Government are the only UK government offering this scheme.