College students in the UK may be paying off loans well into their 60s.

Under new plans announced by the British government on Thursday, students who start college in the U.K. next year could still be repaying student loans into their sixties.

On Thursday, the U.K. government announced changes to university financing, including extending the student loan repayment term to 40 years for those starting a course from September 2023. Currently, state-funded college loans in the U.K. are written off 30 years after students are first due to start repaying them.

Starting next year, graduates will begin repaying their loans earlier under new plans, with borrowers required to start payments once they earn £25,000 ($33,567) annually, down from the current threshold of £27,295. This new repayment threshold will remain in effect until 2026-27, as announced by the Department for Education.

Graduates in the U.K. usually have their student loan repayments automatically deducted from their paychecks.

Only one-fourth of the students who commenced their undergraduate studies in 2020/21 will fully repay their college loans, according to Britain's Department for Education.

At the end of March 2021, the number of outstanding loans was £161 billion and is projected to reach £500 billion by 2043.

On Thursday, the government declared that it would freeze tuition fees at a maximum of £9,250 for the next two years, up to the academic year 2024/25.

Graduates who started their undergraduate course on or after September 2012 could be paying as much as 3% on top of the rate of inflation, which is the retail price index, once they earn £27,296.

The government is also launching two consultations on Thursday proposing changes into U.K. college admissions, including the possibility that students who fail math and English high school exams or do not gain at least two E grades in pre-college exams, known as A Levels, may not be eligible for state-funded student loans.

Quilter's chartered financial planner, Rosie Hooper, stated that the government's modifications to student financing have put an "unprecedented fiscal strain on future graduates."

In the U.K., basic rate tax payers will face a tax rate of 42.25% when they earn more than £25,000. This means that students starting courses next year will take home only 58p for every £1 they earn, paying an additional £260.55 a year compared to graduates on the current loan repayment plan.

The 40-year repayment term extension for student loans is the "biggest sting" for graduates, as they will have to pay a 9% tax on their loans for their entire professional career.

The U.K. government is "having their cake and eating it" by ignoring a recommendation by the Augur Review to cut tuition fees to £7,500.

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