- Published
More than 120 MPs and peers have asked the chancellor to carry out an "urgent review" of the student loan repayment system.
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MPs → publish → system
An open letter coordinated by the campaign group Rethink Repayment says the current set-up places an "unsustainable burden on the next generation of workers".
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up → coordinate → workers
Among the cross-party signatories are MPs with their own Plan 2 student loans, which have come under particular scrutiny this year.
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which → come → scrutiny
Last week, Education Secretary Lucy Powell said the interest rate on those loans was "egregious" and the issue was at the top of her in-tray.
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issue → say → tray
Current and former students have different student loan plans depending on where they live in the UK and when they went to university.
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they → have → university
The letter to Chancellor John Healey does not specify a particular plan signatories would like to be reformed, nor does it name a particular nation.
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it → specify → nation
However, the debate has centred around Plan 2 loans, which were taken out by students in England between September 2012 and July 2023 and are still issued in Wales.
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which → centre → Wales
Graduates pay back what they earn above the repayment threshold at a rate of 9%.
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they → pay → %
The letter says that "successive governments' adjustments to repayment thresholds – together with high interest and marginal tax rates – are placing an unsustainable burden on the next generation of workers".
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adjustments → say → workers
It says many middle-income graduates "see less than half of any hard-earned pay rise due to a combination of income tax, national insurance and student loan repayments".
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graduates → say → tax
It adds: "We are united in the belief that the current repayment framework requires urgent review... to ensure it is fair, sustainable, and supportive of aspiration."
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it → add → aspiration
The letter refers to a decision taken last November by then-Chancellor Rachel Reeves to freeze the Plan 2 repayment threshold at £29,385 between 2027 and 2030, instead of allowing it to rise with inflation.
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it → refer → inflation
The change would result in students starting to repay their loans sooner than they would otherwise have done, and their rising salaries leading to greater repayments.
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salaries → result → repayments
Campaigners want that decision to be reversed – a call echoed by the Treasury select committee in a report following its inquiry into student loans last month.
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decision → want → loans
The committee's report referenced a BBC investigation which found the government compared Plan 2 student loan repayments to £30-a-month phone contracts in promotional presentations to teenagers a decade ago.
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government → reference → teenagers
This was "inaccurate for higher earners", the report said, and "amounted to mis-selling".
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report → say → selling
Laura Trott, shadow education secretary for the Conservatives, and Munira Wilson, education spokeswoman for the Liberal Democrats, are among MPs who have signed the letter.
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who → sign → letter
Tom Gordon, Liberal Democrat MP for Harrogate and Knaresborough, also signed the letter and told the BBC he could not "see an end in sight" to his own Plan 2 student loan repayments.
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he → sign → repayments
Instead, he said he expected his debt to be written off after 30 years in line with the repayment terms.
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debt → say → terms
"If someone earning an MP's salary still isn't likely to repay their student loan in full, what chance does someone on a much lower income have?" Gordon asked, adding it was "an issue of fairness".
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it → earn → fairness
"Governments have changed the repayment terms and increased interest rates after people had already signed up," he said.
"
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he → change → rates
No bank or mortgage lender could retrospectively rewrite the terms of a loan like that.
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bank → rewrite → that
It simply wouldn't be allowed.
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It → allow → ?
So why should the government be able to do it?"
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government → do → it
Oliver Gardner, founder of Rethink Repayment, said the letter showed "the student loans crisis" was not "a partisan issue".
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crisis → say → Repayment
"We believe that now is the time to create a system that is fair and that unshackles millions of graduates from mountains of student loan debt," he said.
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he → believe → debt
A Department for Education spokesperson said: "We know the system we inherited is broken and unfair, and some graduates feel the weight of this more strongly.
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graduates → say → this
"We want to make sure the student loans system works better for everyone and are considering our response to the Treasury Committee's inquiry."
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system → want → inquiry
The Aporia
