More than 52,000 people have responded to a Commons Treasury select committee inquiry into student loans, revealing widespread frustration over repayment terms and interest rates. The committee chair, Meg Hillier, described the responses as showing a 'massive scale of frustration and upset'.
Of the 49,357 respondents who took out student loans, 92% said the level of interest and repayment terms were not reasonable, while 81% reported that the financial impact was worse than expected. Over half (57%) admitted they had not understood the terms and conditions before taking out their loans.
The inquiry was launched amid controversy over the government's decision to freeze the salary threshold for 'plan 2' loan repayments at £29,385 until 2030. This threshold, above which graduates repay 9% of earnings, was originally promised to rise annually with earnings. Many respondents described interest rates as 'extortionate' and 'higher than my mortgage', with some saying repayments acted 'like a tax on ambition'.
Official promotional materials from the Department for Education, published by the committee, repeated the claim that the threshold would be adjusted annually. However, graduates now face monthly repayments of hundreds of pounds, contrasting with earlier examples suggesting repayments of £15 or £60 a month.
In response to the inquiry, a government spokesperson said steps had been taken to make the system fairer, including raising the repayment threshold for the first time since 2021 and capping maximum interest rates at 6% from September. They added that the system protects lower-earning graduates, with repayments linked to income and balances written off after the loan term.
