Overview
- The cross‑party Commons Treasury Committee published a report on Monday that concluded Department for Education communications amounted to 'mis‑selling' of Plan 2 student loans and asked the next chancellor to reverse the three‑year repayment threshold freeze.
- Under the freeze announced in last year’s autumn Budget the Plan 2 threshold will be fixed at £29,385 from 2027 until 2030, meaning graduates repay 9% of earnings above that level.
- MPs pointed to DfE adverts and YouTube guides that compared monthly repayments to phone contracts or cinema trips and said those materials failed to warn borrowers the government can change loan terms after they take them out.
- The committee estimated reversing the freeze would cost about £355 million by 2029–30 and the government has defended recent steps such as two recent upratings, a 6% cap on interest from September, and the return of maintenance grants while promising a formal response to the report.
- MPs warned the freeze and other changes are piling financial pressure on people in their 20s and 30s, affecting mortgage prospects and savings, and they said a modest U‑turn at the Autumn Budget would be a clear test for the incoming chancellor and the government’s claim to fairness.