Ministers in England should look at unfreezing the repayment threshold and handing more support to disadvantaged students if they want quick wins to address mounting public discontent with student loans – but such measures won’t solve anything without a reassessment of state support for teaching, experts have said.
After months of criticism, new education secretary Lucy Powell has stressed that addressing student debt is “at the top of my in-tray”, signalling that the new Andy Burnham government could potentially move quickly to offer support to younger voters – a key demographic for the Labour party.
Under Keir Starmer, then-chancellor Rachel Reeves announced that the repayment threshold for Plan 2 loans would be frozen at £29,385 for three years from April 2027 – a move campaigners said added to anger over the burden the loans place on graduates.
Plan 2 loans apply to students who started undergraduate courses between September 2012 and July 2023. Graduates repay 9 per cent of earnings above the threshold.
In April, the previous government also said interest on some student loans in England, including Plan 2, would be capped at 6 per cent.
