UK MPs Urge U-turn on £29,385 Student Loan Freeze After 9% Repayment Mis-Selling Finding
Updated
Updated · bbc.co.uk · Jul 6
UK MPs Urge U-turn on £29,385 Student Loan Freeze After 9% Repayment Mis-Selling Finding
3 articles · Updated · bbc.co.uk · Jul 6
Summary
A cross-party Treasury Committee said ministers mis-sold student loans and should reverse plans to freeze the Plan 2 repayment threshold at £29,385 from 2027 to 2030.
MPs said government presentations likening repayments to £30-a-month phone contracts were inaccurate for higher earners, while borrowers were not clearly told terms could be changed retrospectively.
Plan 2 borrowers repay 9% of income above the threshold, so a freeze would pull more graduates into repayment sooner or make them pay more as wages rise with inflation.
The report covers loans taken in England between 2012 and 2023 and still issued in Wales; campaigners and the NUS said it confirmed long-running complaints and called for broader reform.
Government and the Student Loans Company welcomed the report's contribution but stopped short of accepting its recommendations, saying they were seeking a fairer system that remains financially sustainable.