Question to the Department for Education:

To ask the Secretary of State for Education, what estimate her Department has made of the salary a Plan 2 borrower must earn for their outstanding loan balance to stop growing in cash terms, given current interest rates.

The salary a Plan 2 borrower must earn for their repayments to exceed interest accrual in a given financial year is dependent on how much the borrower owes. A borrower with a balance of £52,100, the mean average of all Plan 2 borrowers, would need to earn £63,600 to have their balance decrease in cash terms in the 2026/27 financial year. Further earnings-based student loan forecasts can be found at: https://explore-education-statistics.service.gov.uk/find-statistics/student-loan-forecasts-earnings/2025-26.

The Resource Accounting and Budgeting (RAB) charge for Plan 2 full time outlay in 2026/27 financial year is 43%, and for Plan 2 part time outlay it is 37%. The RAB charge is the estimated cost to government of providing a subsidy for the student finance system, calculated as the proportion of outlay issued each year that is forecast not to be repaid when valuing future repayments in present terms using His Majesty’s Treasury’s discount rate.

Student loan forecasts for England for the 2025/26 financial year can be found at: https://explore-education-statistics.service.gov.uk/find-statistics/student-loan-forecasts-for-england/2025-26#dataBlock-45709243-5e56-47d5-9e4e-abf97fbd89d1-tables.

The department does not hold analysis on the proportion of borrowers across all cohorts forecasted to repay more in real terms than the amount they originally borrowed. The expected proportion of outlay repaid in real terms broken down by lifetime earnings decile for the final, cohort of Plan 2 borrowers was published in table 2.1 of the 2023/23 web release ‘Student loan forecasts for England’, which can be found at: https://explore-education-statistics.service.gov.uk/find-statistics/student-loan-forecasts-for-england/2022-23#section-undergraduate-learners-with-higher-education-student-loans-average-repayment-per-student.