Government Presentation Compared Student Loans to Phone Contracts
The government compared student loan repayments to a £30-a-month phone contract in a presentation delivered to teenagers about a decade ago, has uncovered.
This presentation was part of a series of "student finance tours" conducted between 2011 and 2017, reaching thousands of schools. Graduates were recruited to speak to pupils and parents on behalf of the government at the time.
Presenters were instructed to "avoid words [or] phrases like debt," with one former presenter telling the BBC he felt as though he had "sold his soul to the devil."
The Department for Education (DfE) stated that these presentations were conducted under previous governments and emphasized that current ministers have prioritized making the student loan system fairer.
The National Union of Students (NUS) criticized the script used for the presentation about Plan 2 loans—loans that have faced significant criticism this year due to high interest rates and changes to repayment thresholds—calling it "deeply misleading" and stating it had "aged poorly."
According to a government contract with Event Marketing Solutions (EMS), a private company that hired graduates and managed the tours, the objective was to "convert" young people from disadvantaged backgrounds into "actual [higher education] applicants."
The BBC understands that the presentation materials, including the script and notes, were either provided or approved by the Department for Education.
One script from 2016-17 reviewed by the BBC emphasizes that applicants should conduct their own research and directs them to further information. Graduates often took questions after the presentation, and the script references an accompanying leaflet, which the BBC has not obtained.
However, the BBC spoke to former presenters, including two who expressed concerns that the implications of taking out a student loan were downplayed during these talks.
These revelations emerge amid increasing pressure on the government to amend the repayment terms of Plan 2 student loans, which were issued in England between September 2012 and July 2023 and continue to be issued in Wales.
Last week, Prime Minister Sir Keir Starmer stated he would "look at ways" to make the loans "fairer."
Former Presenter Reflects on Presentation Approach
Ed, a presenter in 2016, said he initially believed he was assisting prospective university students but now feels one part of the script resembled a "sales tactic."
In the section explaining that graduates repay 9% of earnings above the repayment threshold—which was £21,000 at the time—the script provides an example of someone earning £25,000.
"You'll pay 9% of £4,000. In case you're wondering, that works out at just under £7 a week – or just under £30 a month," it reads.
"I don't know about you but my phone contract costs about that which might help to put things into a context and point out that the monthly repayments are entirely affordable."
Ed acknowledged that the example was accurate for Plan 2 loans taken out at the time and was designed to engage teenagers.
However, he noted that the "minor life decision" of signing up for a phone contract is "completely separate" from the "huge life decision" of taking out a student loan.
According to Student Loan Company figures, the average graduate now leaves university with debts around £53,000, with repayments via HMRC averaging £93 a month in the latest data.
Interest accrues annually on the total debt, and any remaining balance is written off at the end of the loan term, meaning many students never repay the full amount.
Ed shared that since moving to Australia in 2018, he has struggled to afford his student loan repayments but feels "lucky" to have attended university before Plan 2 loans were introduced.
"I feel like I kind of sold my soul to the devil a little bit," he said.
Student Loans and Regional Differences
Most students attending university in England, Wales, and Northern Ireland take out student loans to cover tuition costs. In many cases—including in Scotland, where tuition is free for Scottish students—loans are also taken out for living expenses.
Repayment plans vary depending on the student's location and when they attended university.
Recent controversy has focused on Plan 2 loans, particularly following the government's decision to freeze the salary threshold at which repayments begin in England.
The threshold will increase from £28,470 to £29,385 in April but will then remain fixed for three years instead of rising with inflation. This means graduates whose salaries increase with inflation will effectively pay more.
While thresholds have changed, the repayment rate remains at 9%. Graduates earning £4,000 above the threshold will still repay approximately £30 a month, consistent with the 2016-17 script example.
However, those with higher salaries pay more. For example, someone earning £50,000 will pay over £160 a month.
Presenter Katie Highlights Need for Broader Examples
Katie, a London resident who applied to deliver government presentations a decade ago to assist disadvantaged students, said the script should have included examples of repayments for higher salaries such as £50,000 or £60,000.
"I've got friends in that category and they refer to their student loan as their second mortgage," she said.
The script informs students that loans accrue interest, but certain details on how interest is applied—including that an additional amount of up to 3% is added depending on earnings, on top of the Retail Prices Index (RPI)—were marked as not to be included in the presentation.
Supplementary notes advised presenters not to "get bogged down in explaining the way interest is calculated" and to avoid words or phrases such as "debt," "poor/poorer," "free money," or "I can guarantee."
Katie said: "There's some real big facts in there that weren't conveyed to students at the time."
"It feels unfair, it feels unjust."
National Union of Students and Experts Respond
Amira Campbell, president of the National Union of Students UK, said the script had "aged so poorly" and described the phone contract comparison as "deeply misleading."
She added that the tour was an opportunity to "have honest conversations," but the script "reads as a sort of brochure for student debt that makes it all look prettier and happier and lighter and more affordable than it actually is."
Funmi Olufunwa, a financial educator and consumer finance lawyer, described it as "strange" that some interest rate details were excluded from the presentation, calling interest information "one of the most fundamental pieces of information."
Higher Education Policy Institute Defends Presentation
Nick Hillman, director of the Higher Education Policy Institute and an adviser to the government during the design of Plan 2 loans, said the tours demonstrated that the government did explain the system to young people.
He described the script as "very defensible" and said the phone contract comparison was "fair," noting the script was designed to communicate at a level appropriate for teenagers.
Hillman added that student loan repayments were "generally affordable" and often amounted to "a few pounds a week" for many people.
"With the benefit of hindsight, one might have put other information in there. But there's nothing in there that's factually incorrect. There's nothing in there that would count as mis-selling," he said.
Department for Education and Student Loans Company Statements
The Department for Education said:
"These tours were delivered between 2011 and 2017 under previous governments.
"This government has focused on making the system fairer, including by reintroducing targeted maintenance grants to support students from lower-income backgrounds and widening access to higher education and high-quality training."
A spokesperson for the Student Loans Company stated that the student finance tours were "commissioned, contracted and led" by the then-government.
"SLC's role is to administer government student finance policy, supporting customers to understand their eligibility, how to apply, their repayment obligations and how repayments are processed," they said.
"We communicate this information and guidance, but we do not provide financial advice or promote student finance."
The EMS Group declined to comment.
Additional reporting by Ruth Green, Nathan Standley, Hope Rhodes, Hayley Clarke, and Emily Holt.
