Student Loans: Review

Baroness Smith of Llanfaes Excerpts

Tuesday 24th February 2026 Lords Chamber

[Baroness Smith of Malvern (Lab)]

I know the noble Lord would not want the suggestion to be made that the level of debt impacts on the amount anybody repays in any given month, because, of course, that is wrong. As I have already identified, the majority of students do not repay the whole of their loan, so they already receive a considerable subsidy from the state. I am sure there are noble Lords in this House who feel slightly aggrieved about being accused, as the leader of the Opposition did, of presiding over a scam in developing the current plan 2 student loan system, but it is important that we maintain the protection for students and graduates that the student loan system creates while being open to thinking about how we can mitigate its burdens on students and those who are repaying their student finance.

[Baroness Smith of Llanfaes (PC)]

My Lords, what assessment have the Government made of how the increasing burden of student debt will influence young people’s decisions not to go to university, particularly for young people in regions of the UK where average salaries are really low? Are we going back to a situation where attending university will be just for the wealthy?

[Baroness Smith of Malvern (Lab)]

No we are not, and nor should we, which is why we have made increasing access and participation a major pillar of our reforms of higher education. Despite the student loan system, we have seen an increase in the numbers of young people going to university. We now need to close the gap between those who come from advantaged backgrounds and those who come from disadvantaged backgrounds, which has stubbornly remained. The student finance system removes any upfront fees from students to ensure that anybody who could benefit from higher education can.