Helen Lambert, an NHS nurse in Scotland, borrowed £57,000 to attend university and began repaying her student loan in 2021. Despite having repaid over £5,000 through monthly deductions of about £145, her debt has soared to more than £77,000 due to interest rates as high as 8%, adding over £400 in interest each month.
Lambert's situation is particularly challenging because she studied from 2017 to 2020, just after NHS bursaries were axed in August 2017. These bursaries had previously covered tuition fees and living costs worth up to £16,454 per year. A partial replacement grant of at least £5,000 was only introduced in September 2020, after she had graduated.
Lambert is one of millions of graduates on Plan 2 student loans. Labour MP Nadia Whittome, 29, also highlighted the issue, noting that despite earning a salary in the top 5% since becoming an MP, her repayments have only reduced her £49,600 debt by £1,000 in six years. She questioned the prospects for other graduates if MPs struggle to make a dent in their loans.
Chancellor Rachel Reeves' decision to freeze the salary threshold for Plan 2 loan repayments for three years has exacerbated the problem. Borrowers now pay 9% of earnings above £28,470, regardless of the amount owed, with loans written off after 30 years. Many graduates will never repay their loans in full, leading to calls for the system to be rebranded as a graduate tax.
