Martin Lewis has warned new university students they will have to pay more of their student loan over a longer period of time.
On Wednesday's edition of Good Morning Britain, the consumer journalist explained how changes to the student loan repayments system will impact freshers starting this September. He compared it to the system in place for current students, explaining: "From the April after you leave university, you start to be eligible to repay the student loan.
"On the current system, you repay 9% of everything over £27,295. From the new system, it will be 9% over £25,000."
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He continued: "If you earn £30,000 on [the current] system, you're repaying £243 a year. On the new system, you're repaying £450 a year.
"So you're effectively paying £207 a year more, every year once you're above the threshold on the new system. You pay back more - that's the first thing to understand."
Martin went on to explain the other 'impactful' change being made - new students will have to pay off their loan for up to 40 years, reports the Manchester Evening News. This is a 10 year increase on the current repayment period of 30 years.
"In practice, that means the vast majority will be repaying for most of their working lives," Martin said. But the Money Saving Expert suggested another way to look at the loan for those worried about the cost.
While the student loan is technically a debt, he advised to look at it as a tax instead. "Only the highest earners will clear it substantially before the 40 years," he added.
Addressing concerned parents, he said: "Don't think about this as £50,000, £60,000 worth of debt. Think about it as 'my child will go to university and will pay an additional 9% of tax'. I'm not saying that's cheap, I'm just talking about the practical way you need to frame it."
Last year saw a record level of university applicants, with 767,000 applying for full time undergraduate courses in the UK. Around 560,000 of these applicants were accepted, according to figures from the House of Commons library. In the 2021-2022 academic year there were 2.86 million students at UK higher education institutions in total.
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