MPs Launch Inquiry into England’s Student Loan Repayment System

An inquiry by MPs into the student loan system in England begins on Tuesday, with the Treasury Select Committee scheduled to hear evidence from student organisations and experts. The National Union of Students said the inquiry should examine the graduate earnings repayment threshold and interest rates.

The graduate campaign group Rethink Repayment said the repayment threshold freeze was against the original terms of the student loans.

New research published on Tuesday found that 34% of people in 2025 agreed a university education "just isn't worth the amount of time and money," up from 14% in 2005, according to the British Social Attitudes survey. The percentage of people who believe going to university leaves graduates a lot better off in the long run declined from 50% in 2005 to 36% in 2025.

Gemma, who graduated in 2016 with an initial student loan debt of £34,105, now owes £41,908.

" "It feels like I'm constantly chasing a debt that gets bigger over time; it feels like climbing a mountain," Gemma said. She added that student loans have contributed to a decision to delay starting a family with her partner. Graduates in England repay 9% of whatever they earn over a threshold.

The graduate repayment threshold is due to be frozen at £29,385 from April 2027 for three years. The NUS is asking the government to rethink the decision to freeze the repayment threshold. Alex Stanley from the NUS said there needed to be a longer term course correction to avoid a generation not being able to buy a home or start a family.

The government has capped the interest rate on Plan 2 loans at 6%. In a statement, it said it had raised the graduate repayment threshold since coming into government for the first time since 2021 and brought back some targeted maintenance loans. Vivienne Stern MBE, Chief Executive of Universities UK, said the labour market is challenging but data shows graduates are more likely to have a job, earn more and have better health.

She added that a university education does not just benefit the individual. At the end of the 30 years any unpaid loan will be cleared, effectively by the taxpayer. Graduates who took out Plan 2 loans between 2012 and 2023 are among those most worried about debts and interest rates.