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Student Loan Repayment Plans
25 February 2026
Lead MP
Jas Athwal
Ilford South
Lab
Responding Minister
Josh MacAlister
Tags
EducationEconomyEmployment
Word Count: 13629
Other Contributors: 37
At a Glance
Jas Athwal raised concerns about student loan repayment plans in Westminster Hall. A government minister responded.
Key Requests to Government:
The Minister needs to urgently reconsider freezing thresholds during a cost of living crisis, raising the threshold to alleviate hardship and make the system fairer, reviewing whether RPI remains an appropriate benchmark for interest calculations, and examining if a 9% repayment rate disproportionately affects middle earners. The principle of fairness should guide any reforms.
How the Debate Unfolded
MPs spoke in turn to share their views and ask questions. Here's what each person said:
Lead Contributor
Students across the country are protesting the unfairness of the student loan system, which has been described as rigged against them and in urgent need of reform. Since 2012, around 5.8 million people have taken out plan 2 loans with an average debt of £53,000 upon graduation. The current repayment threshold is £29,385 for the tax year 2026-27 and from April 2027 onwards, it will be frozen for three years despite wage growth, leading to more income falling into repayments. In 2024-25, plan 2 loans accrued £12.6 billion in interest while borrowers repaid just £2.8 billion.
Abtisam Mohamed
Lab
Sheffield Central
Abtisam Mohamed noted the anxiety and frustration among students and graduates due to the perceived unfairness of the student loan repayment system. She shared examples where loans increased despite consistent repayments, leading some to regret their university attendance.
Alison Taylor
Lab
Paisley and Renfrewshire North
The design of student loans and repayment plans are the creation of the previous Government, with students suffering due to high inflation rates. The current government should keep the impact of loans on students under review.
Andy McDonald
Lab
Middlesbrough and Thornaby East
The MP discussed the current average debt of £53,000 upon graduation in England, describing it as a mortgage-sized burden placed on young adults. He criticized successive political choices that have led to today's system, including the introduction of fees and variable fees, highlighting that many graduates do not enjoy high earnings despite their debts.
Aphra Brandreth
Con
Chester South and Eddisbury
Representing a constituency with the University of Chester, she highlights the struggles faced by young people under student finance, including low-income families taking on loans for education dreams. Proposes measures to reduce loan burden and expand vocational routes.
Clapham and Brixton Hill
Ms. Ribeiro-Addy criticised the current student loan system as unfair and compared it to a graduate tax, noting that some graduates have seen their total loans increase despite consistent payments.
Ben Lake
PC
Ceredigion Preseli
Concern about fewer young people deciding to go to university due to these changes could detriment both individuals and society as a whole.
Derby North
Defends higher education opportunities while criticizing plans to cut university places and tripled fees introduced by the previous government. Notes that graduates are repaying more due to interest, urging the Education Secretary to look into these loans.
Chris Hinchliff
Lab
North East Hertfordshire
Asked the Minister to acknowledge and address the issue of tuition fee repayment levels, urging him to reject suggestions from the Liberal Democrats and act on it with Labour values.
Daniel Francis
Lab
Bexleyheath and Crayford
Highlights the generational unfairness of student loan policies, emphasizing how current conditions prevent young graduates from starting families and advancing in careers due to high interest rates and repayment difficulties.
Helen Hayes
Lab
Dulwich and West Norwood
Acknowledging the material impact of plan 2 loans on graduates, she calls for urgent review of loan terms due to their negative effects on housing market access and standard of living. Concerned about fairness in payment terms and inflation measures used by lenders.
Helen Maguire
Lib Dem
Epsom and Ewell
Pointed out that students under plan 2 face a freeze in repayments, questioning why the Minister criticises previous Governments for similar actions while doing so himself.
Ian Sollom
Lib Dem
St Neots and Mid Cambridgeshire
Graduates face an unfair system where promises of manageable loan repayments are broken, leading to increased debt. The interest rate link to RPI has been problematic, with real earnings not keeping pace, exacerbating the issue. The introduction of plan 5 further complicates matters for recent graduates, who now face longer repayment periods and higher debts due to abolished maintenance grants that disproportionately affect students from poorer backgrounds. Students struggle financially, impacting their educational experience negatively.
Jack Rankin
Con
Windsor
Mr Rankin highlighted the urgent need to address a student loan repayment system that is failing graduates, citing over 50% of young people going to university and facing significant debt. He criticised recent changes in interest rates and thresholds, arguing they are morally indefensible and unfairly burden graduates. Mr Rankin also disagreed with mass debt cancellations or progressive taxation as solutions, suggesting these could exacerbate the problem. He proposed reforms including abolishing real interest on plan 2 loans, lifting funding caps for apprenticeships, and introducing a jobs bonus to help young people achieve financial independence.
James Naish
Lab
Rushcliffe
Critiques the current student loan system for undermining public trust in higher education institutions and raises questions about changing repayment thresholds, high interest rates, and their impact on social mobility and home ownership.
Jessica Brown-Fuller
Lib Dem
Chichester
The repayment system disproportionately affects women and those with caring responsibilities. A constituent faced a higher bill after returning to work from having children, leading to longer repayment periods until retirement.
Jessica Toale
Lab
Bournemouth West
In Bournemouth West, higher education funding changes disproportionately affect students from low-income backgrounds. The current system with high interest rates and a frozen repayment threshold is discouraging graduates from seeking salaries above the repayment limit, impacting job market dynamics. Students demand no further real-terms freezes to the repayment threshold, interest rates linked to CPI, and a more progressive pay structure.
Jim Shannon
DUP
Strangford
Jim Shannon highlighted the issue of graduates struggling with student loan repayments even when working in what were once considered good jobs. He shared an example of a junior doctor with a debt of £100,000 and called for changes to the system that currently penalises home students.
Josh Babarinde
Lib Dem
Eastbourne
The current student loans regime has transformed halls of residence into a situation where students can check out but never leave due to increasing bill burdens. The removal of maintenance grants by the Conservatives forced more borrowing, and the freezing of repayment thresholds is making it even harder for graduates.
Julie Minns
Lab
Carlisle
The Government's steps in reforming student finance for Plan 5 loans are welcome. Similar consideration should be given to the reforms needed for Plan 2 loans.
Juliet Campbell
Lab
Broxtowe
Graduates in my constituency, such as the University of Nottingham alumni, face impossible situations where monthly repayments are less than accrued interest. A constituent with an £37,000 loan has paid back only £600 and now owes £55,000 after 8 years due to low earnings before meeting the repayment threshold.
Justin Madders
Lab
Ellesmere Port and Bromborough
Mr. Madders highlighted the issue of only one-third of students fully repaying their loans and suggested that the state should consider repaying public service workers' loans as a way to improve recruitment and retention, particularly in the NHS.
Kate Osborne
Lab
Jarrow and Gateshead East
The debt levels of many graduates have increased significantly over the years, despite their consistent repayments. For example, Melissa's student loan has risen from £37,000 to £60,000 after four years of payments. Kate Osborne advocates for eliminating tuition fees to boost social mobility and benefit society.
Kevin Bonavia
Lab
Stevenage
A constituent has paid £852 towards his loan but more than £2,300 in interest was added during the same period. The system feels like running up a down escalator for young parents trying to build a stable foundation for their child. The minister should think about fundamental reform. Why should working-class people have to worry about whether to go to university due to debt when people with more family income do not face the same choice?
Liz Jarvis
Lib Dem
Eastleigh
Children from disadvantaged backgrounds should have access to the creative industries, and it is shameful to suggest that such courses are worth less than others. Young constituents are facing unprecedented challenges including pandemics, cost of living crises, housing difficulties, and large student loans with high interest rates and a frozen repayment threshold. One constituent's son has seen his loan balance increase by 33% despite five years of repayments. The repayment threshold freeze is viewed as a stealth tax on graduates.
Luke Charters
Lab
York Outer
The student loan repayment system, Plan 2, is a mess created by those who are not even here for the debate. Young people are paying for their mistakes.
Mark Sewards
Lab
Leeds South West and Morley
Mr. Sewards discussed the unfairness of plan 2 loans and higher tuition fees, proposing that the Government consider a thorough discussion on debt, interest, repayment thresholds, and loan terms.
Natasha Irons
Lab
Croydon East
Plan 2 students face retrospective changes to the repayment threshold and interest rates linked to RPI, which is discredited by OBR. These structural factors need addressing for fairness. The student loan system is complex, ineffective, and unfair with freezing the repayment threshold increasing real costs year after year. The terms of a repayment should not be changed after agreement and interest rates linked to CPI rather than RPI could restore credibility. We are talking about the creative industries, which are worth hundreds of billions of pounds to our economy. Ensuring access to these skills and providing opportunities for working-class children is crucial.
Olly Glover
Lib Dem
Didcot and Wantage
Tuition fees were first introduced by the Conservative Government in the early 1990s, followed by top-up fees by Labour in 2004. The hon. Member's statement is inaccurate. Two constituents, Rebecca and Alexandra, face significant challenges with student loan repayments. Rebecca is an NHS band 6 employee who has accumulated nearly £18,000 in interest since 2019 despite consistent repayments, leading to financial strain. Alexandra, a PhD candidate at Culham Campus, highlights how the system disadvantages those pursuing essential scientific research due to prolonged periods without repayment capacity.
Peter Prinsley
Lab
Bury St Edmunds and Stowmarket
The MP highlighted intergenerational inequality, noting that while his university cohort graduated without debt and entered a more accessible housing market, young people today face significant financial burdens due to student loans. He stressed the importance of increasing repayment thresholds, ensuring interest does not outpace realistic repayment capacity, exploring tax-deductible repayments, and improving transparency in loan terms.
Rachael Maskell
Lab Co-op
York Central
Students in York are facing high housing costs that their loans do not cover. Progressive taxation is needed to fund higher education and ensure students can meet current needs.
Salford
A Salford graduate owes more than £47,000 with interest accrued while studying and has a balance higher than when they graduated despite making repayments. Campaigners request reversing the repayment threshold freeze and tackling unfair interest rates.
Richard Burgon
Lab
Leeds East
Graduates are making massive repayments of up to 9% of their earnings and will be paying off debt for decades, breaking a generation. Cancelling student debt through progressive taxation could provide immediate relief.
Roz Savage
Lib Dem
South Cotswolds
A constituent who graduated in 2021 has already accrued over £6,000 of interest on a £41,000 loan. Students and graduates have been at the mercy of arbitrary decision making.
Sammy Wilson
DUP
East Antrim
Mr. Wilson argued that the student loan system is unfair due to changing repayment terms and threshold freezes, suggesting that thresholds should increase with inflation, interest rates be linked to CPI, and repayments set at a reasonable level.
Sarah Russell
Lab
Congleton
The MP argued that the current student loan system is unfair and does not set people up well for life. She pointed out that young adults are essentially signing up to a huge amount of ongoing debt when deciding to apply to university, which can be a barrier to owning homes, starting families, and having pension savings. The hon. Gentleman has referred to plan 2 loans but plan 3 loans were also brought in by his Government, which are for those with postgraduate qualifications and kick in from when they earn £21,000. Asked if the Government would commit to looking at the thresholds of plan 3 as well as plan 2, highlighting that postgrads have been facing a frozen threshold since their inception.
Tim Roca
Lab
Macclesfield
The MP stated that England now has the most expensive public university system in the world, with students covering 55% of costs. He highlighted a formative moment of betrayal when tuition fees were trebled during the coalition government and noted that graduates face significant financial burdens despite having a graduate premium.
Tom Rutland
Lab
East Worthing and Shoreham
Concerned about the psychological impact of seeing student loan balances increase despite monthly payments, and the financial strain caused by high repayment rates. Advocates for raising the repayment threshold and adjusting interest rates to RPI or CPI.
Government Response
Josh MacAlister
Government Response
The Minister acknowledged the debate's importance and confirmed that the Government will look into issues surrounding student loan repayment plans, particularly those under plan 2. He noted that while previous Governments had frozen the repayment threshold for a decade, the current Government is lifting it to £29,385 from April 2027 but will freeze it at this level for three years due to fiscal pressures and fairness concerns across the education system. The freeze will generate £5.9 billion which will be invested in further education improvements including skills training investments, supporting colleges, apprenticeships, and technical training, as well as setting up technical excellence colleges. Additionally, changes are being made to improve the student finance system with a lifelong learning entitlement from January 2027 and targeted means-tested grants reintroduced for academic year 2028-29.
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About Westminster Hall Debates
Westminster Hall debates are a chance for MPs to raise important issues affecting their constituents and get a response from a government minister. Unlike Prime Minister's Questions, these debates are more in-depth and collaborative. The MP who secured the debate speaks first, other MPs can contribute, and a minister responds with the government's position.