Student Loans

Ben Spencer Excerpts

Wednesday 18th March 2026 Commons Chamber

[Dr Ben Spencer (Runnymede and Weybridge) (Con)]

I thank the Minister for giving way: she has been very generous with her time. I think there is a point of principle in this debate, and I should like to hear the Minister’s thoughts on it. Does she believe that there is any degree offered by a university in which it is not fair to invest taxpayers’ money? If the quality is not good enough, surely it is not fair for the individual to be indebted. Will the Minister concede that there probably are some courses, across the country, that it is not fair for the taxpayer to subsidise?

[Georgia Gould]

I have made it very clear that we want to increase the quality of courses, and that is one of the conditions that we attached to increasing the fees in a fair way, but we want to do that by ensuring that those courses are of high enough quality, rather than scrapping the opportunity for young people to go on them.

Looking further ahead, I can tell the House that the Prime Minister’s ambition is to see two thirds of young people in higher-level learning by the age of 25. With the lifelong learning entitlement, which will be launched in January 2027—a policy that the last Administration failed, year after year, to deliver—we are transforming higher education from a “one-shot” opportunity into a flexible and responsive system with learners at its centre. As was mentioned earlier, the LLE will allow learners to fund individual modules and reskill throughout their careers, at colleges and universities alike.

We now have a responsibility to ensure that the benefits of higher education are maintained for future generations, and to clean up a student loan system in which interest rates have been allowed to spiral and students are confused about what is the right path for them. We absolutely recognise that there are failings in the system, but it is not a system that we built; it was a system that the Conservatives created. We know that student loan repayments are a concern for graduates, which is why we increased the plan 2 repayment threshold last year and why we are increasing it again next month, to £29,385. Borrowers who earn below that amount annually will not be required to make any repayments at all. This threshold is higher than the median graduate salary three years after graduation.

Graduates generally go on to benefit from higher earnings, and it remains reasonable for those who gain the largest financial benefits from their degrees to contribute more towards the cost of their studies than those who have not gone to university, or graduates earning lower salaries. Lower earners will still benefit from the unique protections that student loans offer. Any unpaid loan balance, including interest accrued, will still be cancelled at the end of the loan term at no detriment to the individual, outstanding debt is never passed on to a borrower’s family, and having an outstanding student loan is not a barrier to accessing a mortgage. Student loan balances do not appear on borrower credit records, although regular student loan repayments will be considered, alongside other living costs, as part of the affordability check for mortgage applications.

I want to say how seriously the Government take the cost of living challenges that young people face. Too often this generation have found their challenges ignored. We are working hard to tackle these issues by extending Government-funded childcare, reducing energy bills, freezing rail fares, rolling out free breakfast clubs, building new homes and introducing the Renters’ Rights Act 2025.

Before Conservative Members once again line up to criticise the decisions that we have made, I would like to take a moment to remind them of their track record on this matter. Plan 2 student loans were designed and introduced in 2012 by the Conservative-Liberal Democrat coalition, with a repayment threshold of £21,000 per year and interest rates of up to 3% above inflation. Those are the very interest rates that the Conservatives and Liberal Democrats are now calling to be reduced. Having said that they would increase the plan 2 repayment threshold to reflect earnings, they froze it for four years. The Conservatives then froze it in 2016 and in 2017, and again from 2021 to 2024. In total, there was a decade of freezes by the opposition parties. It is their mismanagement that now necessitates a further freeze to the threshold. I do not remember any of this outrage from those Members when they created and built this system.

As we have heard, the Opposition’s solution is to cut courses and cut opportunities. We will not make reckless and unfunded changes to student loans. Student finance and higher education funding is a complex, interconnected system. We are considering a range of options to make the system fairer, but we must be fiscally responsible and consider carefully how change would be funded. Politics is about choices.

--- Later in debate ---

[Ian Sollom]

I thank the right hon. Gentleman for his intervention, because that is one part of the argument I am making. There is a very important point about that, which is that it could equally be an argument for making the loan system fairer in its repayment terms to reflect that.

There is a deeper problem, too. The graduate earnings premium has declined in Britain, but not because we have too many graduates; it is because we have too few skilled jobs. That is a demand-side failure and a Conservative legacy. Our peers in OECD countries have expanded graduate numbers while maintaining the graduate premium, because they built the industries and invested in the regions that generate high-skilled employment. Cutting student numbers accepts our economic underperformance as permanent. It is, as I have said before, a counsel of despair dressed up as policy.

Then there are the creative industries: over £100 billion a year to the British economy; one of our most successful global exports; built on a pipeline of arts graduates. The answer is not to stop training the people on whom the whole pipeline depends. Ultimately, the value of an education cannot be read entirely from a graduate’s salary. The capacity for critical thinking, empathy and cultural participation are public goods, hidden in plain sight, that show up nowhere in write-off rates. A party that asks only “What does it pay?” has already decided something important about what it values.

[Dr Ben Spencer]

On the broader point of principle about the value of certain subjects, I intervened on the Minister and she failed to answer, so I will ask the hon. Gentleman the same question. Does he think that there are some subjects offered by some universities for which the value is quite poor and that it is unfair for the taxpayer to subsidise them? Does he think that in principle it is possible that those subjects exist?

[Ian Sollom]

The point is to allow the market and the regulation of that market to decide. [Interruption.] I will make some progress.

--- Later in debate ---

[Alex McIntyre]

I am always happy to be educated by privately educated Oxbridge graduates who did not pay a penny for their student fees. The right hon. Gentleman will find that employment levels have actually gone up. The number of people in employment has gone up under this Government—[Interruption.] Well, that’s the stat. If he wants to check, he is more than welcome to.

I welcome the youth guarantee that the Government have talked about this week, introducing more apprenticeships and opportunities for young people and tackling the people in my constituency who have been furthest from employment. My hon. Friend the Member for Kettering (Rosie Wrighting) made a fantastic speech about some of the other things we are doing for young people. It is not just about education; it is about renters’ rights and expanding free childcare.

[Dr Spencer]

I am not privately educated, and nor did I go to Oxbridge. I am where I am today because I went to a state grammar school. The hon. Gentleman is making an impassioned speech about breaking down barriers to social opportunity. Would he agree that grammar schools are a key part of that?

[Alex McIntyre]

Gloucester has a number of grammar schools and they are doing very well for the students there. I went to a grammar school—[Hon. Members: “Oh!] I went to a state school, and my parents worked really hard to get me there. If Members want to talk about my background, where I came from and how I got to this place, I am very happy to do that. It was quite different from the background of a lot of people on the Conservative Benches.

I am proud to stand here, as the son of a train conductor, talking about opportunities for young people in my constituency who have been left behind for generations, written off and, quite frankly, talked down to by the Conservatives, who talk about making sure that the arts are only for the wealthiest who can afford to go to university and not be spread out, as if education is not actually a benefit to everyone in society and should only be in the purview of those who can afford to pay for it. It is disgraceful, it is taking us back generations and, quite frankly, I am sick to death of hearing about it.

Politics is the language of priorities. As I have said, there are undoubtedly challenges with this system, but the Conservatives left behind so many messes after 14 failed years in government that we cannot fix them all in the first five years of a Labour Government. We are going to need at least a decade. We said that in the manifesto. We talked about a decade of national renewal, and we are committed to that because we cannot afford to fix all the messes that you left behind straight away because you left the economy in a mess as well—[Interruption.] Sorry, Madam Deputy Speaker. They left the economy in a mess—you had nothing to do with it.

I would say to the Minister, as a parent and as someone who is on plan 2 and has spoken to lots of my residents, that if there is money available and if there is an opportunity, we need to look at the expansion of free childcare. We are talking about priorities and how we can support young people at the moment, and the 30 hours of funded childcare is very welcome, but it does not cover the cost of childcare for people who are working full time throughout the year, not just in term time. That is preventing young people from starting their families and getting on, and this could be a really good opportunity if there was money available. This is about priorities and about how we can support young people. I welcome what the Government are doing, but if I were to give them a gentle nudge in any direction, I would encourage them to look again at what we can do to expand the offering of free childcare.

I am not going to take lectures from the Conservatives on young people. They had no plan for young people during their 14 years. They did not care about young people like me when they were in government. Quite frankly, they wrote me off and I had to fight my way to get here today—[Interruption.] Yes, I did go to a grammar school and I am proud of that. I did quite well for myself, but my parents sacrificed a lot for me to get here, so I am not going to take lectures from the Conservatives on that. This Government are fixing the mess that they left behind. Of course there are challenges in the system, but I welcome the measures that the Government have taken so far, and long may that continue.