The level at which students begin to pay back their loans will be lowered from £27,295 to £25,000 for new borrowers.
From September 2023, the interest rate on student loans will also be set to RPI+0%. Additionally, the length of time that students have to pay their loans back until they can be written off has been extended from 30 to 40 years.
University tuition fees have been capped at £9,250 for the next two years and will not rise with inflation.
Michelle Donelan, Higher and Further Education Minister, said:
‘We are delivering a fairer system for students, graduates, and taxpayers as well as future-proofing the student finance system. We are freezing tuition fees and slashing interest rates for new student loan borrowers, making sure that under these terms no one will pay back more than they have borrowed in real terms.’