Question to the Department for Education:

To ask His Majesty's Government what plans they have to address high levels of interest some graduates pay on student loans.

Student loans are subject to interest so as to ensure that those who can afford to do so contribute to the full cost of their degree.

Interest rates on student loans do not affect monthly repayments made by borrowers. Regular repayments are based on a fixed percentage of earnings above the applicable student loan repayment threshold, not on amount borrowed or the rate of interest. If income is below the relevant student loan repayment threshold, or a borrower is not earning, then they do not have to make repayments at all. Any outstanding debt, including interest built up, is written off after the loan term ends or in case of death or disability, at no detriment to the borrower.

Interest rates are set annually in relation to the Retail Price Index. The government caps maximum student loan rates when needed to ensure that student loan interest rates do not exceed market rates for comparable unsecured personal loans.

A full equality impact assessment of how the student loan reforms may affect graduates, including detail on changes to average lifetime repayments under Plan 5, was produced and published in February 2022 and can be found here: https://www.gov.uk/government/publications/higher-education-reform-equality-impact-assessment.