Plan 1 Repayment Threshold indexation

Ed-1

The 2014 regulations regarding repayment of student loans have just been put before parliament and a significant detail regarding the plan 1 repayment threshold (pre-2012 ICR system loans) is contained within it.

http://www.legislation.gov.uk/uksi/2014/651/pdfs/uksi_20140651_en.pdf

Regulation 4 commits the long-term indexation of the plan 1 repayment threshold to the retail price index (RPI). Previously it was only in legislation (2011 linked below) to index it (raise it by RPI) up to 2015.

http://www.legislation.gov.uk/uksi/2011/784/regulation/6/made

Good news for pre-2012 students with income-contingent loans repaying under plan 1.

If inflation as measured by RPI remains around current levels, the plan 1 repayment threshold should be around £18000 in April 2016, at which point the £21000 plan 2 threshold will be introduced.

Poolie

Makes a change for the some good news on the threshold front. At least they didn't set a new date and just permanently removed it.

Ed-1

Poolie wrote: »

Makes a change for the some good news on the threshold front. At least they didn't set a new date and just permanently removed it.

Yeah. One wonders whether this is to set the terms and conditions of repayment at the point of sale, in preparation for the expected sell-off of the pre-2012 loans. Once they've been sold to private buyers, the government can't really fiddle around with the threshold as it changes how much the owners would receive, so this ensures that any private buyer knows that the threshold will change annually by RPI with this automatic uprating mechanism.