Low-earning graduates will benefit from a delay in their student loan repayments under a Conservative scheme designed to defuse the political damage over tuition fees and attempt to woo younger voters.

Speaking at the start of the Conservative party conference in Manchester, Theresa May announced plans to raise the income level that triggers student loan repayments for recent graduates in England from £21,000 to £25,000 a year.

The change is likely to apply only to those graduates who took out the higher rate of student loans introduced in 2012, which perversely means that earlier graduates will have higher loan repayments even if they are on the same income level as later graduates with much higher debts.

The government is also to freeze undergraduate tuition fees at £9,250 a year in England, and May announced a review of student funding to look at long-term issues, such as a return to maintenance grants and varying tuition fees for courses.

“We are pledging to help students with an immediate freeze in maximum fee levels and by increasing the amount graduates can earn before they start paying their fees back,” May said as the Conservative party conference opened.



May unveiled the policy as the Conservatives come under pressure to increase their appeal to younger people, who voted overwhelmingly for Labour at the last election.

However, the prime minister’s attempt to ease the financial burden for graduates was met with immediate scepticism from some within her own party.

Michael Heseltine, the former deputy prime minister, warned that Labour would always “outbid” the Tories on promises to younger voters, after Jeremy Corbyn pledged to scrap tuition fees altogether.

The changes were quickly derided by Labour as inadequate compared with its own pledge.

“So your choice is annual tuition fees of £9,250 with the Conservatives or annual tuition fees of £0 with Labour,” tweeted Luke Pollard, the Labour MP for Plymouth, Sutton and Devonport.

Angela Rayner, Labour’s shadow education secretary, said the move was “a desperate attempt by the Tories to kick the issue into the long grass”.

Rising levels of student debt were blamed for the Tories’ poor showing among young voters at the last election, with average debts on graduation rising close to £50,000 for those who began studying in 2012.



Tuition fees were set to rise from £9,250 to £9,500 next year due to inflation, but May’s decision to freeze them recognises the political difficulty such an increase would provoke.

While the new policy does nothing to reduce the overall debt burden for students, it does mean that low-earning graduates will benefit immediately.

However, the biggest winners from a raised repayment threshold in the long run will be higher-earning graduates, with fewer having to repay the full amount of their loans before the debt is written off after 30 years.

Martin Lewis, the personal finance guru who headed an independent taskforce to publicise the 2012 student loan model, said in a blogpost he was “delighted” with the changes.

“By doing this it seems the government has finally, belatedly, learned from the bloody nose young people gave it at the last election,” Lewis wrote, accusing the government of “lying” to students by freezing the repayment threshold.

Andrew Adonis, the Labour peer who campaigned over the summer for drastic revisions to university funding, also dismissed the government’s move to freeze fees.

“Govt in hopeless position of admitting £9,250 fees cartel broken, yet suggests trifling changes. This ends with abolition/radical reform,” Adonis said on Twitter.

The change also fails to help many graduates with student loans dating from before 2012, with those who took out loans when tuition fees were about £3,000 having to repay their loans at similar rates to those on £9,000.

A threshold rise to £25,000 for post-2012 students would see those who took out loans at £3,000 making higher repayments than more recent graduates earning the same income.

The freezing of tuition fees also throws into chaos the teaching excellence framework introduced by the government in the last parliament, which rewards universities with good ratings by allowing them to raise fees.