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Part-time students will have longer before they start to pay off their student loan, the Government has announced.

Students starting part-time degrees from 2012 were previously expecting to begin repaying their loan, if earning over £21,000 a year, the first April after the third anniversary of commencing studies, regardless of whether or not they are still studying.

But changes revealed yesterday mean part-time students will have an extra year before they start making repayments.

Part-time students, who make up 40% of all undergraduates, currently do not receive loans for tuition fees or living costs from the Student Loans Company.

Those starting in 2012 will be the first part-timers to get funding, but only for fees, meaning they won't have to pay for their course upfront.

The dark cloud to this good news for many is part-time students will accrue interest at a higher rate for longer. While studying, interest is inflation plus 3%, yet after studying, graduates would only accrue that much if they earn over £41,000, otherwise it's less.

Martin Lewis, MoneySavingExpert.com creator, says: "This is a definite improvement. It has always been rather perverse that those part-time students eligible for the loans may need to start repaying their loans while they are still studying. 

"This change goes a good way to addressing that problem. It's worth noting it does mean many will now accrue a higher rate of interest for the extended period."

Not all will get funding

To qualify for a loan, it must be their first degree and they must study at least 25% of full-time course credits.

This means up to 70% of part-time students may not get funding, which is a concern as their fees will rise.

As with full-time students starting in 2012, repayments will start at 9% of income above £21,000.

Universities minister David Willetts says: "We are extending tuition loan support to part-time students so that they are treated more fairly than ever before. We have listened carefully to the sector about the details of this because we are determined to provide the best possible regime for part-time students.

"We will amend the legislation so no part-time student will have to repay a penny until almost five years after their course has started."

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