Overview
- MPs on the Commons Treasury Committee have launched a formal investigation into the student loan regime, with submissions open until 14 April.
- The probe will focus on Plan 2 loans for those who started courses from 2012 to 2023, examining interest-setting, frozen repayment thresholds and whether terms should be changed after loans are taken out.
- Chancellor Rachel Reeves confirmed in the autumn budget that the Plan 2 repayment threshold will be fixed at £29,385 for three years from next year, a move critics say increases payments in real terms.
- Plan 2 borrowers repay 9% of earnings above the threshold and face interest at RPI plus up to three percentage points, contributing to large balances that many see rising despite regular repayments; reported averages exceed £43,000 and the IFS cites debts of over £50,000 on graduation.
- Campaigners including the NUS and Martin Lewis are pressing for higher thresholds and lower interest, Conservatives propose capping interest at RPI only, ministers plan targeted maintenance grants from 2028/29 and say any wider reforms must be fully costed.