Britons living in some European countries face a huge rise in their student loan repayments later this year, the Guardian can reveal, in a move that threatens to trigger a fresh backlash for Rachel Reeves.<\/p>\n
UK graduates working in Germany and Belgium<\/a> \u2013 and possibly other countries \u2013 have been told that their monthly repayments will increase from April, the Guardian can reveal.<\/p>\n In a move expected to further inflame a row over the crippling cost of student debt<\/a>, the government was accused of employing \u201cmessed-up logic\u201d in calculating living costs as many Britons abroad now face handing over hundreds of pounds more a year out of their pay.<\/p>\n Amid growing calls for reform<\/a> of the system to ease the debt burden faced by millions of graduates, the government is turning the screw even tighter on some UK nationals living overseas by slashing the salary threshold for repaying loans.<\/p>\n The row over the cost of student loans has escalated since the chancellor\u2019s decision last November to freeze the salary threshold<\/a> for \u201cplan 2\u201d student loan repayments for three years.<\/p>\n But, the Guardian understands, for plan 2 graduates living in Germany<\/a>, the UK government is going further and cutting the threshold from the current \u00a328,470 a year \u2013 the same as in the UK now \u2013 to \u00a323,510, with effect from 6 April.<\/p>\n Like their counterparts in the UK, those with plan 2 loans who live abroad have to repay 9% of everything they earn above their annual threshold.<\/p>\n The overseas salary thresholds are based on living costs in each country and set once a year \u2013 but some affected graduates said the cut suggested the UK government had decided that the cost of living in Germany had somehow fallen by nearly \u00a35,000 between 2025-26 and 2026-27.<\/p>\n The move means the UK is imposing a threshold that is less than the annual amount a full-time worker on Germany\u2019s minimum wage would earn: \u20ac28,116 (\u00a324,500).<\/p>\n One graduate based in Germany claimed the move was designed to squeeze more money out of those living abroad and amounted to \u201ca UK government disincentive to move to Europe\u201d. On web forums, some said their monthly loan repayments would double, or almost double.<\/p>\n It is unclear precisely which countries have had their thresholds cut (or increased) and how many UK graduates are affected. The Department for Education declined to confirm how many people would be affected; it intends to formally announce the 2026-27 overseas earnings thresholds in April.<\/p>\n Reeves is under increasing pressure over the row, which centres on an estimated 5.8 million people who took out a plan 2 loan between 2012 and 2023, many of whom say they have been saddled with ballooning debts.<\/p>\n Some graduates claim they were the victims of government \u201cmis-selling\u201d, and the consumer champion Martin Lewis has told Reeves that changing the terms of the deal was not \u201ca moral thing<\/a>\u201d to do.<\/p>\n There are 201,000 English UK nationals living overseas with student loans \u201cin repayment\u201d, according to official data<\/a>, though some graduates from Wales and Scotland are also affected by the changes for those living overseas.<\/p>\n One UK national who graduated from Sheffield University after five years of study \u2013 a degree followed by a PhD \u2013 and now works in Germany, was told by the Student Loans Company (SLC) that his plan 2 loan repayments would increase from \u00a3213 to \u00a3251 a month \u2013 an extra \u00a3456 a year \u2013 even though his salary had not gone up.<\/p>\n A representative of the SLC, the government-owned organisation that administers the loans \u2013 told the graduate the annual repayment threshold for Germany was being cut to \u00a323,510 a year from April, according to screenshots of his conversation seen by the Guardian.<\/p>\n The graduate said: \u201cHow can this be legal? The talk was of freezing, but this is a massive drop.\u201d<\/p>\n On Reddit<\/a> and MoneySavingExpert<\/a> forums, other graduates in Germany and Belgium said they had also been informed the new threshold was \u00a323,510.<\/p>\n One user posted: \u201cIt\u2019s messed-up logic. Germany isn\u2019t cheaper to live in, so they should raise the UK threshold, not reduce\/reclassify Germany.\u201d They have a plan 4 student loan \u2013 they studied in Scotland \u2013 and said their monthly repayments were being hiked from \u00a384 to \u00a3127.<\/p>\n German inflation edged higher to reach 2.1%<\/a> last month, data revealed this week, while UK inflation fell to 3% in January<\/a>.<\/p>\n