Student Loans

Luke Charters Excerpts

Wednesday 18th March 2026 Commons Chamber

[Joe Robertson (Isle of Wight East) (Con)]

Labour is failing young people. Youth unemployment is up since Labour took office—it is now higher than in the eurozone. There are more people not in education, employment or training since Labour took office—now nearly 1 million. There is a midlife crisis in our economy, too. More than 2 million people aged between 50 and 64 are on out-of-work benefits. The deal for young people is bad, and it has been made worse by this Chancellor.

Too many young people are coming out of university with excessive debt, and they do not know what the future terms of their borrowing will be. If a private provider were to provide loans in this way, where someone did not know when they signed up what the interest rates, repayment deal or income threshold would be, that provider would be unable to enforce it—it would be unlawful. When it comes to this Government and the Chancellor freezing the threshold, for some reason those on the Government Benches think that is okay.

We have heard from Government Members who said that they joined the Labour party to fight for a better deal. We heard from the hon. Member for Kettering (Rosie Wrighting), who said that she is here to fight for her generation—generation Z. Is she not bitterly disappointed at the limp response from her Government now that they have power and can do something about intergenerational justice as she sees it? Instead, Labour Members come into this House to defend their Government increasing debt for students and freezing the earnings threshold at which those young people have to start repaying.

[Mr Charters]

I am on plan 2, and I had a targeted maintenance grant. I will ask the hon. Member a simple question: does he think it is a fairer system to have targeted maintenance grants in it—yes or no?

[Joe Robertson]

Let me ask the hon. Member a question, because his party is in government, he has power and he can change things. Does he think the system is fair? No, he does not, because he has already told this House that it is not. Is he not bitterly disappointed that his own Government have not got a plan to change it? If he does not like the system that existed before July 2024, why are his Government not changing it?

The Opposition have brought forward a plan, which we are debating today. It would mean that those on plan 2 student loans will not end up paying more and more above RPI, so the Government will not be making money out of them having a loan. That is a meaningful change. The Government can go further because they are in power. I hope that our party, by the time of the next election, will be able to offer more, but we have already announced that we would abolish stamp duty, helping young people. We have already announced that we would scrap bad courses that offer no real additional employment prospects for people who do them, other than leaving them saddled with debt.

It would seem that most Labour Members have history degrees, given the amount of time they have spent speaking about the last decade, but we are talking about the system that exists now. When I went to university, I accepted the principle that young people who went to university did not contribute enough to the education that they received. Under the Blair Government, undergraduates were asked to contribute more. Clearly there is a benefit for society in having an educated and graduate workforce to take up jobs as teachers and doctors, for instance, but there is also a great benefit for those who take up those jobs, because of the higher earnings involved. That is a principle I supported. It is a principle most people supported, and I still support it. However, we have plainly reached a tipping point for too many students. The personal debt is so high that they have no real prospect of ever paying it back. Some have degrees that give them no real opportunity ever to earn more than they would have earned had they been in a good apprenticeship—a good apprenticeship that the last Government gave them the opportunity to enter into.

--- Later in debate ---

[Neil O’Brien]

Yes, and I am grateful for that question. Under our proposed reforms, four fifths—80%—of plan 2 graduates would benefit and pay less over their lifetime. The hon. Gentleman can look up all this stuff on the IFS website if he wants to check.

There are so many personal stories here. The other day, one doctor was recounting how she graduated with £75,000 of debt, has worked hard for years and has paid off every year, but she now owes £90,000.

[Mr Charters]

rose—

[Neil O’Brien]

Perhaps the hon. Gentleman will tell me why he thinks that is fair.

--- Later in debate ---

[Mr Charters]

The hon. Gentleman referenced the IFS report. He will know that it has costed his proposals and that for the plan 2 cohort there would be a capital cost of £30 billion to £40 billion—I believe that could be a gaping hole. It is a seriously uncosted policy, is it not?

[Neil O’Brien]

If the hon. Gentleman reads to the end of the IFS report, he will see that it costs our proposal in single-digit billions, and we have explained exactly how we will pay for it—I will come to that in a moment—so there is no gaping hole whatsoever. No wonder so many despair, with more broken promises from the Government and ever-rising debt, and no promise of action at any particular time.

How we would pay for our proposal—this goes to the hon. Gentleman’s question—is equally important. Since the last Government created the longitudinal education outcomes dataset, we have had much better data on which degrees do—or do not—provide economic value for students and taxpayers. Economic value is not the only value put on higher education, or any kind of education, but rather than simply pushing more young people towards courses that the Government’s own data show us do not benefit them—they do not help them, and they leave them feeling like they have been mis-sold and betrayed, with a lot of debt and nothing much to show for it—we need to have a rethink. The current approach is not working.

Since the election, youth unemployment has risen to levels significantly above the eurozone’s for the first time in a generation. That is mainly as a result of the Government’s decision to target lower-paid people for tax increases and to increase regulation, but it is not helped by the Government’s unbalanced approach to skills, based on an endless expansion of university courses whether they are any good or not.