Question to the Department for Education:

To ask the Secretary of State for Education, whether her Department has had any discussions with Rethink Repayment regarding their student loan reform campaign.

Plan 2 student loans were designed and implemented by previous governments. Interest rates are applied at the Retail Price Index (RPI) only, then variable up to an upper limit of RPI +3% depending on earnings. This maintains the real value of repayments over a long loan term. As an additional borrower protection, interest rates on post-2012 loans are automatically capped by the prevailing market rate for comparable unsecured personal loans, ensuring borrowers are protected if market conditions change.

Interest rates do not impact monthly repayments made by student loan borrowers. Repayments are made at a constant rate of 9% above the earnings threshold, and the 9% rate strikes a balance between affordability for graduates and fairness to taxpayers. For example, someone earning £30,000 will repay around £4 per month in the 2026/27 financial years under the repayment threshold of £29,385.

Those earning below the earnings threshold do not make repayments. Any outstanding loan including interest built up, is cancelled at the end of the loan term with no detriment to the borrower, and debt is never passed on to family members or descendants.

This is a deliberate government investment in students and the economy, and the 9% over-threshold repayment rate keeps higher education funding sustainable and ensures the costs are shared fairly between students and taxpayers.

Reducing the repayment rate to 5% would significantly increase the cost to taxpayers, many of whom have not attended university, which in turn would undermine the sustainability of higher education funding.

My noble Friend, the Minister for Skills has written to the Rethink Repayment campaign organiser via their MP regarding this issue.