UK graduates residing in the European Union are facing increased student loan repayments following recent changes to repayment thresholds. Graduates living in countries such as Germany and Belgium have been notified of upcoming rises in their monthly repayments starting April.
The UK government has lowered the income threshold for Plan 2 student loans for graduates living abroad. For example, those living in Germany will see their threshold drop from £28,470 to £23,510 per year, effective from 6 April. This means graduates must now repay 9% of any income earned above this new, lower threshold.
Many affected graduates have expressed frustration over the change. One commented, “How can this be legal? The talk was of freezing, but this is a massive drop.” Another highlighted the cost of living, saying, “It’s messed-up logic. Germany isn’t cheaper to live in, so they should raise the UK threshold, not reduce/reclassify Germany.” Others view the adjustment as a deterrent from living in Europe, with one graduate describing it as “a UK government disincentive to move to Europe.”
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A spokesperson for the Labour Party addressed the issue, stating that the current student loan system was inherited from the previous government. They emphasized that the threshold freezes in the UK are designed to protect both current taxpayers and students, as well as future generations. The spokesperson added that repayments are income-dependent and that outstanding loans and interest are cancelled after the repayment period.
Further, they highlighted ongoing efforts to support higher education, including reintroducing targeted maintenance grants and promoting the government’s goal of two-thirds of young people pursuing apprenticeships, higher training, or university education by age 25.