What are the key changes?

The repayment term for student loans will be extended from 30 years after graduation to 40 years – meaning that many students will still be making repayments into their 60s – and the income threshold at which repayments begin will be lowered from more than £27,000 to £25,000. The tuition fee for full-time undergraduates will be frozen at £9,250 a year until the end of the current parliament.

When will these affect students?

Only students enrolling in 2023-24 will have to sign up for the terms including the 40-year repayment period. They will also be charged a lower interest rate on their outstanding loans. Graduates since 2012 have paid interest based on the retail price index, rising by up to 3% depending on income. But the extra 3% will be scrapped, and RPI used solely.

Will any of the changes affect current undergraduates?

Yes. The freeze on tuition fees will be extended to those students from England studying full-time, so their institutions will see real-terms cuts in incomes. The undergraduate tuition fee was set at £9,000 in 2012 and was supposed to rise with inflation. However, the government has frozen it at £9,250 since 2016. Current students and graduates with student loans since 2012 will also see their repayment thresholds frozen at £27,000 – that too was meant to rise with inflation, but instead graduates will have to repay more than they otherwise would.

Will access to student loans be restricted?

Potentially, yes: the government has begun a consultation over minimum eligibility requirements to receive loans immediately after leaving school. The Department for Education’s consultation suggests achieving two grade Es at A-level or equivalents as one possibility. Another is achieving grade 4 passes in GCSE maths and English. But strong opposition and a wide range of exemptions may effectively make the policy too difficult to implement.

Will the changes affect how many people go to university?

The eligibility rules are unlikely to apply to mature or part-time students, although the prolonged and faster repayments may put off some students. The DfE says the changes to student finance will have a “neutral impact” and thinks the changes are unlikely to “significantly” change the minds of those aiming to study at university. The universities minister, Michelle Donelan, said the effect on students with special needs would need to be carefully considered.

Who are the winners and losers?

The biggest winner is the Treasury, which is estimated to gain an additional £600m in loan repayments, substantially reducing the amount of unpaid loans that would expire after 30 years. Other winners are the very well-paid, who will see their maximum loan repayments fall by more than 25%. The losers are young women, disadvantaged students, and those students coming from the north of England, Yorkshire and the Humber and the Midlands, who will see their repayments rise in some cases by 150%.