In 1998 the Government first introduced tuition fees for higher education. Since then, the costs borne by students for their tuition has risen, and correspondingly so has the amount that students can borrow through student loans. In this inquiry the Treasury Committee will examine the student loan regime, the terms and conditions under which student … Show more
| Title | HC No. | Published | Items | Response |
|---|---|---|---|---|
| 1st Report – Student loans: Broken and unfair? | HC 14 | 7 Jul 2026 | 27 | Pending |
The student loans system is complex. The terms and conditions of loans must be examined within the context of the entire system. The overall level of subsidy provided by the state to the individual is the defining factor in how the loan then operates. (Conclusion, Paragraph 17) Read more
Although the government claimed that its subsidy is in the region of 30% to 40%, we saw evidence indicating that individual contributions from students graduating today could be as high as 95%. That was not what the government or Parliament intended, when Parliament agreed the Plan 2 legislation. Society benefits … Read more
In the long term, the government should return the balance between the individual and the state to a 50:50 split. (Recommendation, Paragraph 19)
Due to our remit, we have not scrutinised the relative value of different higher education courses. There may be valid arguments now and in the future about the proportion of costs borne by individuals and the state, depending on the relative value of courses to the state and the individual. … Read more
The government has described the student loans system as unfair and broken; the other key stakeholders in the system, universities and students, have agreed. We also agree. The system, however well-intentioned, has resulted in most students never paying back their loan in full while engendering widespread dissatisfaction among graduates. It … Read more
Intergenerational fairness is fundamental to maintaining a functional society. A responsible government would pay close attention to it. Ministers must decide where to spend and cut based, at least partially, on which portions of the population need help or can afford to carry more of the burden. The student loan … Read more
There is no definitive measure of what a fair student loan interest rate should be. The interest rate on each student loan plan must be considered within the context of the plan’s other terms and conditions. (Conclusion, Paragraph 41)
Considered in isolation, an interest rate much higher than inflation seems unfair, while an interest rate pegged to inflation that maintains the real- terms cost of a loan might seem fairer. If earnings fail to keep up with inflation, however, graduates become less well-off relative to their loan balance, as … Read more
Progressive interest rates that are set higher than the rate of inflation increase the costs of higher education to high earners, but this may not seem fair to high earners who also pay higher amounts of income tax than graduates on lower incomes. (Conclusion, Paragraph 43) 40 Read more
The government’s current 6% cap on student loan interest is a step in the right direction for protecting Plan 2 loan holders. However, capping the rate at 6% rather than allowing it rise to 7.1% as implied by March’s RPI rate will benefit only students who will pay back their … Read more
With its Plan 5 reforms, the previous government chose to replace income- contingent interest rates with rates pegged to inflation, which suggested that it considered income-contingent loans as problematic. Instead, it opted to shift the burden of paying for higher education slightly away from the highest earners towards all loan … Read more
It is regrettable that this government, along with all its predecessors, has continued to use RPI as its measure of inflation for student loans despite knowing it is statistically flawed. From 2030, RPI will be merged with CPIH, but this will be of little consolation to students who have had … Read more
We reiterate the recommendation of the then Treasury Committee in 2018: “The Government should abandon the use of RPI in favour of CPI to calculate student loan interest rates.” We are disappointed that eight years later this recommendation has not been implemented. (Recommendation, Paragraph 47) Consumer harms from changing terms … Read more
Governments both past and present have frozen the repayment thresholds of student loans, despite repeated commitments by government when the loans were taken out that that would not happen. (Conclusion, Paragraph 61)
The government has exempted its student loan policies from consumer protection laws. No government should ever have taken advantage of this exemption by pursuing lending practices that cause consumer detriment. Deciding to go to university, what to study and taking out a student loan is one of the most material … Read more
This government must reverse the repayment threshold freeze in the Autumn Budget. The annual additional borrowing from this policy would be £355 million by the fiscal rule target year 2029–30. The government has a moral obligation to deliver this modest fiscal reversal not only to maintain students’ trust in government, … Read more
The government has exempted its student loan policies from consumer protection laws and cannot be held liable in law for mis-selling. However, we expect the government to comply with not only the law, but basic fairness and common decency. The way in which student loans have been promoted and communicated … Read more
The Department for Education must in future ensure that all student loan promotional materials it authorises, endorses, or links to in its own materials are compliant with the FCA Consumer Duty or the FCA financial promotions regime, even if the Department is not legally required to do so. (Recommendation, Paragraph … Read more
As no government can bind its successors, all government promotions should clearly state that “the future terms and conditions of your loan can be changed retrospectively by future governments”. The statement provided in some historic materials that “all policies are kept under review” is not sufficiently clear and in our … Read more
Future student loans should be issued as a contractual agreement rather than as agreements governed by statute, to prevent future governments from changing the terms and conditions of the loans retrospectively to the detriment of the borrower without paying compensation. (Recommendation, Paragraph 85) Read more
The Student Loans Company must explicitly make it clear in its “speedbumps” that the government can and does change the terms and conditions of the loans retrospectively after they are taken out. (Recommendation, Paragraph 86)
When asked about its compliance with the ‘red hand doctrine’, the SLC’s defence was that a student loan is not contractual, so it need not comply, and that in any case legal responsibility for its application forms actually lies with the Secretary of State for Education. When we asked Baroness … Read more
The Department for Education and the Student Loans Company need to both jointly and separately establish who is legally responsible for what. In particular, they must establish whether the student loan application form makes students sufficiently aware of the unusual terms of the loan, which allow the government to change … Read more
The government’s written evidence to the Committee stated that individuals are required to sign a ‘loan contract’, whereas the Student Loan Company has told us student loans are not contractual. This contradiction must be resolved. (Recommendation, Paragraph 89) Loan versus tax Read more
Most current student loan holders will never pay off their loan, which will function like a 30- or 40-year supplementary income tax. Many people told us that the debt acts as a psychological burden, unlike future income and national insurance taxation. (Conclusion, Paragraph 95) 43 Read more
While defining student loans as loans, the Teaching and Higher Education Act 1998 does not ban additional guidance being added to a student loan statement. We disagree with the government that additional information would confuse loan holders. There is potential for consumer detriment if people make voluntary repayments to pay … Read more
The Department for Education and the Student Loans Company should work together to design and implement wording that can be added to the annual statements giving students an approximate indication of how much of their total loan is likely to be written off. (Recommendation, Paragraph 97) 44 Read more
| Date | Witnesses | |
|---|---|---|
| 10 Jun 2026 | Lucy Rigby KC MP · HM Treasury, Rt Hon. Baroness Smith of Malvern · Department for Education | View ↗ |
| 2 Jun 2026 | Alex Stanley · National Union of Students, Kate Ogden · Institute for Fiscal Studies, Kieren Walters · Prospect, Oliver Gardner · Rethink Repayment, Sir Philip Augar · Post-18 Education and Funding Review, Toby Whelton · Intergenerational Foundation, Vivienne Stern · Universities UK | View ↗ |
| Witness | Organisation | Sessions |
|---|---|---|
| Alex Stanley · Vice-President of Higher Education | National Union of Students | 1 |
| Kate Ogden · Senior Research Economist | Institute for Fiscal Studies | 1 |
| Kieren Walters · Director of Communications and Research | Prospect | 1 |
| Lucy Rigby KC MP · Economic Secretary to the Treasury | HM Treasury | 1 |
| Oliver Gardner · Founder | Rethink Repayment | 1 |
| Rt Hon. Baroness Smith of Malvern · Minister of State (Minister for Skills) | Department for Education | 1 |
| Sir Philip Augar · Chair of the 2019 Independent Panel | Post-18 Education and Funding Review | 1 |
| Toby Whelton · Senior Researcher | Intergenerational Foundation | 1 |
| Vivienne Stern · CEO | Universities UK | 1 |
| Date | Direction | Title |
|---|---|---|
| 8 Jul 2026 | — | Correspondence from Minister of State for Education regarding student loans ses… |
| 1 Jul 2026 | — | Student Finance England, Student Finance Presentation, August 2022 |
| 1 Jul 2026 | — | Department for Education, Student Finance presentation, 2018 |
| 1 Jul 2026 | — | HM Government, Student Finance Campaign presentation, January 2020 |
| 1 Jul 2026 | — | HM Government, Student Finance Campaigns FAQs, January 2020 |
| 1 Jul 2026 | — | Department for Education, Student Finance Campaign FAQs, 2019 |
| 1 Jul 2026 | — | Department for Education, Emails approving presentations, December 2018 |
| 23 Jun 2026 | — | Correspondence from Student Loans Company to Chair on Student loans and taxatio… |
| 23 Jun 2026 | — | Correspondence from Chair to the Student Loans Company on Student loans and tax… |
| 27 May 2026 | — | Correspondence from the Chair to the Department for Education, requesting infor… |
| 27 May 2026 | — | Correspondence from the Department for Education in response to the Chair's req… |
| 19 May 2026 | — | Correspondence from the Interim Chair of the UK Statistics Authority on student… |
| 13 May 2026 | — | Correspondence from Mary Kelly Foy MP on student loans, dated 15 April 2026 |
| 13 May 2026 | — | Correspondence from Jas Athwal MP, on student loans, dated 28 April 2026 |
| 13 May 2026 | — | Correspondence from Rt Hon Justine Greening, former Secretary of State for Educ… |
| 15 Apr 2026 | — | Correspondence from the Secretary of State for Education on changes to student … |
| Date | Type | Detail | |
|---|---|---|---|
| 1 Jul 2026 | Formal meeting (private meeting) | Private meeting · The Wilson Room, Portcullis House |