Overview
- Prime Minister Keir Starmer’s spokesman said ministers are considering cutting interest rates or changing the repayment threshold to make the system fairer.
- Chancellor Rachel Reeves previously froze the Plan 2 repayment threshold at £29,385 for three years from April 2026, while many graduates face interest set at RPI plus up to 3%, currently around 6.2%.
- HM Treasury and the Department for Education are holding talks on combinations of interest and threshold changes, with reports of tensions over where responsibility lies.
- Reeves indicated next week’s spring statement is unlikely to deliver reforms, while The Times reported the Treasury could announce changes as early as next week, a move that remains unconfirmed.
- Consumer advocate Martin Lewis condemned the threshold freeze as a breach of trust, Conservative leader Kemi Badenoch proposed capping interest at RPI only, Labour MPs urged reform, and analysts warned rate cuts alone would offer limited relief for most borrowers.