Graduates could end up paying back thousands of pounds extra on their tuition fee loans under government proposals to alter the system, according to research.
It suggests that women are more likely to be affected than men, while those from poor backgrounds could be hit the hardest.
The new study, published by the Sutton Trust, looks at plans laid out by the chancellor, George Osborne, in the summer budget to change the student loan repayment system.
Under the proposals, which are open for consultation, ministers are considering freezing the level at which graduates start to repay their loans at £21,000 for five years from 2016.
This move, the government’s preferred option, would affect those who took out loans from 2012 onwards.
It was expected that from next year, students would pay back loans when earning £21,000 – a system introduced when tuition fees were trebled to a maximum of £9,000 three years ago, with this salary updated annually in line with average earnings.
The new research report, by higher education consultant John Thompson, argues that freezing the repayment threshold, as well as other proposed changes such as replacing maintenance grants designed to help poorer students living costs with loans, could significantly increase the cost of going to university.
It concludes that on average, if the £21,000 threshold is frozen under the government’s preferred option, the overall average extra repayment for a typical borrower would be £2,800 over 30 years.
There would also be a difference between the genders, it claims, with women paying back an extra £3,300 on average, compared to £2,300 for men. This is because women tend to have lower earnings and are more likely to be paying back money across the full 30-year borrowing period. Loans are written off after this point.
It goes on to argue that this move, alongside planned changes to maintenance grants, will have a strong impact on low income students, who could see their average debt rise to more than £50,000.
The report concludes that loan terms for current borrowers should not be changed, and that new borrowers should be given definite terms that will apply to the full repayment period.
“The freezing of loan thresholds will significantly increase the average cost of higher education, particularly for students from low income backgrounds who are currently eligible for maintenance grants,” it says.
“Yet even bigger risks arise from the uncertainty that has been created. The danger is that this will have an adverse effect of the willingness of young people to take out the student loans.”
Sutton Trust chairman Sir Peter Lampl said: “Freezing the repayment threshold for student debt will add to graduates’ already heavy financial burden.
“The fact that this measure will adversely affect low earners and graduates from low income homes, who are already being penalised by the budget shift from grants to loans, is a serious cause for concern.”
A Business Department spokesman said: “We want our world-class higher education system to remain financially sustainable and welcome responses to our current consultation on the threshold for student loan repayments.
“Our reforms to student finance will mean that students from low income backgrounds receive a substantial increase in the cash-in-hand to help with living costs whilst at university.”