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MPs accuse government of ‘mis-selling’ student loans – what we know

Stay up to date with notifications from The IndependentNotifications can be managed in browser preferences.AllNewsSportCultureLifestyleA cross-party group of MPs on the Commons Treasury Committee has called for the next Treasury chief to reverse the three-year freeze on student loan repayment thresholds. The committee's report warned that the government's handling of 'Plan 2' loans, particularly the threshold freeze, amounts to 'mis-selling' and places undue stress on younger generations. The chancellor froze the salary threshold for loan repayments for three years from 2027, meaning graduates will pay 9% of earnings above £29,385 until 2030, making them likely to be significantly worse off as the threshold would otherwise have risen with inflation. Reversing this freeze would cost £355 million by the 2029–30 financial year, a 'modest fiscal reversal' that MPs believe would help restore trust between graduates and the government. The government acknowledged a 'confused and broken system' but highlighted actions taken, such as raising repayment thresholds in previous years, capping interest rates, and reintroducing maintenance grants. In fullNext chancellor must scrap student loans three-year threshold freeze, MPs sayMore bulletinsThank you for registeringPlease refresh the page or navigate to another page on the site to be automatically logged inPlease refresh your browser to be logged in

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