Martin Lewis issues warning over 'misunderstandings' after university tuition fee hike

The Government has announced tuition fees in England will rise for the first time in eight years, from £9,250 a year to £9,535 - an increase of 3.1%

Martin Lewis has explained how rising tuition fees won’t impact the amount most people pay each year as he debunked "misunderstandings" around the student loan system.

The Government has announced tuition fees in England will rise for the first time in eight years, from £9,250 a year to £9,535 - an increase of 3.1%. This will apply to students starting university in September 2025 and those continuing their courses. University maintenance loans, which are used by students to help pay for daily living costs while they study, will also rise by 3.1%.

The current £9,250 cap on tuition fees has been frozen since the 2017/18 academic year. But in a statement published after the rise was confirmed, MoneySavingExpert.com founder Martin Lewis explained how most people will continue to repay the same amount.

This is because the threshold for when you start to repay your student loan will remain the same. If you started university after September 2023, you’ll be on a Plan 5 loan and only start to repay your student loan when you begin to earn £25,000 or more a year. You repay 9% of your income over this amount, and the debt is wiped after 40 years.

Martin said: “The amount you repay each year (9% over the threshold) solely depends on what you earn, not on what you borrow. Increasing tuition fees will only see those who clear the loan in full over the 40 years pay more. That is generally mid-high to higher-earning university leavers only, so the cost of increasing tuition fees will generally be born by the more affluent. Most lower- and middle-earning university leavers will simply pay 9% extra tax above the threshold for 40 years (and higher tuition fees won't change that)."

Martin explained how changes introduced to the student loan system last year had a bigger impact on your repayments. If you started university between September 2012 and July 2023, the repayment threshold was higher at £27,295 a year - meaning you could earn more money before you started to repay your student loan.

The point for when your student loan debt was wiped was also lower at 30 years. It means anyone who started university in September 2023 has to keep repaying their student loan for an additional ten years, and at the lower repayment threshold of £25,000 a year.

Which student loan plan are you on?

First of all, you need to know what type of student loan plan you should be on.

• Plan 1: If you started your course before September 1, 2012 (England and Wales) or after September 1, 1998 (Northern Ireland)
• Plan 2: If you started your course between September 1, 2012 and July 31, 2023 (England) or after September 1, 2012 (Wales)
• Plan 4: If you started your course after September 1, 1998 (Scotland)
• Plan 5: If you started your course after August 1, 2023 (England)

If you’re a postgraduate student from Northern Ireland, you will be on Plan 1, or for postgraduate courses in Scotland, you're on Plan 4.