Conclusion 17

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 is deeply problematic: i) It was unwise of previous governments to claim that “a student loan is very unlikely to impact materially on an individual’s ability to get a mortgage.” Many people would interpret this statement as claiming that a student loan has no impact on mortgage affordability. The government relied on UK Finance for this quote, but the Department for Education remains responsible for the accuracy of its promotional materials. Dismissing the impact of a student loan on a mortgage application could be seen as a breach of the FCA Consumer Duty. ii) The Department for Education has produced YouTube videos and slides that did not disclose that the government could vary the terms and conditions of loans retrospectively. That amounted to mis-selling. iii) The Department for Education produced promotional materials that emphasised a comparison between the monthly cost of student loan repayments and the monthly cost of a mobile phone or cinema tickets, which was inaccurate for higher earners. That amounted to mis- selling. iv) The Student Loans Company does not make it explicitly clear in its “speedbumps” that the government can retrospectively change the terms and conditions. This fact is disclosed in the guide to student loans but is not done with any emphasis, as would be required were this to be a commercial contract. That amounted to mis-selling. (Conclusion, Paragraph 82)