However, the Treasury is expected to argue that the current system is unfair because billions of pounds in university debt is never repaid and all taxpayers underwrite the cost of those who choose higher education.

One Whitehall insider defended the change, saying: “It is a fairness argument. Normal working people, a lot of whom do not go to university and benefit from student loans, are paying for this.”

Details of the new approach are expected to be announced within weeks as part of a series of reforms to student loans and tuition fees. For months, discussions about the reforms have been closely guarded between a few ministers and government officials, with final decisions yet to be taken.

But Whitehall figures have disclosed the latest thinking about the student loan reforms, which they say has been driven by creating a “fairer” system for graduates and taxpayers.

There is an emerging consensus within Number 10, the Treasury and the Department for Education that the salary threshold for paying back student loans should be lowered.

One option being considered is dropping it to £25,000 – roughly the annual income. A second option is to reduce it to as low as £22,000. Dropping the threshold to £25,000 would save the Treasury around £1.1 billion for each new year of students, according to an analysis, while reducing it to £22,000 would save £2.7 billion.

Government sources said the latest thinking was that the change would apply to new students, although think tank figures predict it could also apply to current students.

Under the plans, most graduates would pay between £200 and £475 more a year in student loan repayments, according to estimates from the Higher Education Policy (HEPI) Institute think tank.

Officials are also considering reducing the interest rate paid on student loan debt – something the 2019 Tory manifesto promised to consider. That could be used by the Government to argue that some students are getting a fairer deal from the reforms.

However, the move would be complicated by the fact that Theresa May increased the threshold in 2017, arguing that it would ease the financial burden on young graduates.