Question to the Department for Education:

To ask the Secretary of State for Education, whether her Department has made an assessment of the potential merits of increasing the repayment threshold of student loans on plan five in line with those on plan two.

Where government reforms lead to the introduction of a new student loan plan type, the terms of the new loan, such as repayment threshold, interest rates and length of the loan are considered as a whole. They are then set in legislation to apply to that specific loan type, such as for Plan 5 which was introduced in 2023.

Comparing only one element, such as the threshold, of a historic plan to a new plan does not provide a balanced assessment. Though the Plan 5 repayment threshold is lower than for Plan 2, the Plan 5 interest rate is lower (RPI+0%) when compared with Plan 2 Plan (RPI+3% during study and varies with earnings post-study).

In 2022, the department conducted a government consultation to assess the impact of policy reforms on higher education funding and finance, including changes to repayment thresholds from Plan 2 to Plan 5. Details on the consultation are available at: https://assets.publishing.service.gov.uk/media/62223cfb8fa8f549071fc82c/Higher_education_policy_statement_reform_consultation_-_Equality_analysis.pdf.