More than two months after they were unveiled, the government’s student loan changes have now been reviewed and analysed in detail, with experts concluding they will be a gamechanger for higher education in England – but not in the way ministers hope. The long-awaited response to the Augar review of post-18 education and funding, published in February, included 40-year payback periods and higher repayment terms. While these are unlikely to stop middle-class teenagers from aiming for a degree, those from less advantaged backgrounds may hold back, imperilling the supply of graduates in key sectors such as teaching and nursing, experts have concluded. Analysis by the Institute for Fiscal Studies (IFS) thinktank found that lower-middle- and middle-income graduates would be hardest hit, paying £30,000 more than current graduates, with repayments spread over 40 years. But graduates in the highest income brackets will pay £20,000 less as the progressive elements of the existing loan package are stripped away. The IFS also found that proposals under consideration to restrict loans to those with minimum exam grades could have a dramatic effect on who goes to university. Imposing a requirement of GCSE passes in English and maths might have stopped 10% of recent undergraduates accessing loans – in effect barring most of them from campus. The IFS found the majority would be from disadvantaged families or ethnic minorities, precisely the groups that successive governments have encouraged to consider higher education. Claire Crawford, of University College London’s Institute of Education, said government and taxpayers would be “massively reducing the amount of investment that they are providing” by recouping more from graduates. The proportion of graduates repaying their loans in full could rise from 25% to nearly 75%, according to the IFS. But whether the new repayment regime will deter future students in England depends on their calculations of whether or not they will be better off. “Those who might expect to go on and be relatively high-earning, you would think that they would be even more incentivised to go to university as a result of this, because their repayments are predicted to go down,” Crawford said. “If you’re at the lower end of the spectrum, I guess it’s a more marginal decision. But it’s not totally obvious.” Crawford noted that many students chose subjects and courses that had a low return in terms of earnings, suggesting reasons other than income were behind their decision. “What we can conclude is that the [existing] sticker price did not seem to put people off. So whether they’re paying sufficient attention to these kind of underlying changes, which affect future payments, is not clear,” she said. The vice-chancellor of Sheffield Hallam University, Chris Husbands, said there were two views among his colleagues about the potential effects. “The first view is that none of this is going to have any impact, that the cultural predisposition to go to university as a way of improving yourself is so deeply entrenched, that the changes to the loan regime will not significantly impact the demand for places. “View No 2 is that this cultural predisposition is much stronger among the middle classes than among poorer households, and that while none of these interventions are likely to be decisive in themselves, the drip, drip, drip of this is likely to have an effect on families in places like east Barnsley [reinforcing historically low rates of participation].” Husbands thinks ministers are less interested in widening participation “because they think the job has been done” and are more concerned about cost, with current forecasts of a 26% increase in student numbers over the next decade. As a result Husbands says policymakers are like hotel guests in an unfamiliar shower, alternating between being too hot and too cold while nervously adjusting the taps. “What worries me about all of this is that the deteriorating terms of trade on student loans, the minimum eligibility requirements and so on, are a whole series of interventions that have the impact of getting us back to a 1940s or 1950s world, where essentially universities are full of middle-class people, and poorer people don’t get in,” he said. Husbands said he could accept the case for minimum eligibility requirements, but they could act as barriers to the most disadvantaged because of England’s highly unequal results at school level. “But I don’t think the sector has got its brain around it yet.” While the government has been improving its financial position, it has done little to help students whose maintenance loans are falling in real terms. University funding through tuition fees, stuck at £9,250 since 2016, has also been eroded by inflation despite government increasing teaching grants in some high-priority subjects such as health. Robin Mason, the pro-vice-chancellor at the University of Birmingham, said the extended fee freeze could lead to a rebalancing between more selective universities and the rest of the sector, reversing the trend of the last decade that has resulted in selective universities taking a greater proportion of students. “I think you can bet on the more selective universities not looking to expand their domestic undergraduate numbers,” Mason said. “One part of government policy restricts supply at the top end and another part says it doesn’t want ‘lower-value’ courses. And there’s going to be a collision between those two but it’s a collision that’s being forced by different arms of policy.” A spokesperson for the Russell Group of universities said frozen fees, rising costs and demand for places would “inevitably start to impact on quality and choice for students, particularly for those subjects with the highest teaching costs” such as nursing and engineering. “To protect the pipeline of high-level skills and jobs that will be crucial to our economic recovery, we would urge government to work with the sector and find a long-term, financially sustainable approach to funding higher education and which continues to widen access to university,” the spokesperson said.