How Will Reforms To Student Loans Affect Nurses?

“These changes are a disgrace and will blatantly disproportionately affect nursing staff.” Patricia Marquis, Royal College of Nursing director for England

New research has illustrated that government reforms to student loans will disadvantage nurses and other lower- and middle-income professionals, whilst benefitting only higher earning graduates.

The Recent Changes To Student Loans

According to analysis by consultancy firm London Economics, most nursing graduates will pay significantly more in repayments over the lifetime of their loans as a result of the most extensive changes to student loans in England for over 10 years.

Do you think that part of the reason for the reforms, which disadvantage nurses who have studied in the UK, is that the government is committed to maintaining, and possibly expanding the number of nurses recruited from overseas?

Repayment Threshold Lowered

The lower threshold at which repayments begin, and an extended repayment period of 40 years for new borrowers, will result in lower- and middle-income earners paying considerably more.

In a large percentage of cases, lower earners could actually pay more in total than higher paid graduates, due to repaying both the loans and accumulated interest over a longer time.

Who Will This Affect?

Lower-paid earners will see their total repayments increase by up to 174%, according to the Government’s own figures.

A graduate earning £37,000 by 2030 would repay £63,100 over the course of their career, while a graduate earning £70,000 would only repay £55,000, according to London Economics’ research.

Will this lower starting threshold and increase in the total amount nurses will have to repay mean that recent pay settlements between nursing unions and the government will need to be revisited sooner rather than later?

The reforms also affect those who have already graduated. For those who took out loans between 1st September 2012 and 31st July 2023, their repayment threshold will remain at £27,295 until 2024/25. Consequently, they will end up paying a greater portion of their income towards their loans compared to if the threshold had gone up in line with inflation.

Could This Impact Retention?

“It means nurses will be paying back their student debt sooner, more of it, and for longer. At a time when there is a recruitment and retention crisis in the NHS, this will only exacerbate it” said Patricia Marquis, Royal College of Nursing director for England.

Do you agree with Ms. Marquis? Will reforms to student loans mean that there will be fewer nurses graduating each year, and of those, fewer will stay working in the NHS?

And Even Deter Potential Students?

The Institute for Fiscal Studies warned that the reforms could make university less attractive for those who don’t expect to be high earners.

“In these reforms, lower earners pay more, and higher earners pay less. Lower to middle earners like teachers and nurses will lose out the most” explained Ben Waltmann, senior research economist at the IFS.

What effect do you think these reforms will have on staff wellbeing and morale, especially given recent unprecedented strike action by nurses over their pay and conditions?

“These changes are a disgrace and will blatantly disproportionately affect nursing staff.” Patricia Marquis, Royal College of Nursing director for England

What Does The Department Of Education Say?

Under the new arrangements, whilst repayments would decrease for the highest earners over the lifetime of their loans, lower earners would still be contributing the least, government officials laid out.

A Department for Education spokesperson said: “We have cut interest rates to RPI only so that new borrowers will not repay more than they originally borrowed, when adjusted for inflation. Through these reforms, more than half of borrowers will repay their loans in full, compared to the current rate of 20%.”

“It is important that we have a sustainable student finance system that is fair to students and taxpayers” they continued.

Reforms Could “Entrench Inequality”

Chief executive of the Intergenerational Foundation Liz Emerson cautioned that “these reforms will entrench inequality. The only winners will be the best-paid graduates.”

Do you think that the government has focused too much increasing the number of loans being fully repaid, and has not considered fully the longer-term consequences of burdening new graduates even more, both in terms of their working lives, but also for society at large, with graduates having to delay life milestones like buying a house, getting married, and having children, due to reduced disposable income and ability to save?

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