MPs Launch Inquiry into England's Student Loan System
An inquiry by Members of Parliament into the student loan system in England commenced on Tuesday, gathering evidence from student organisations and experts.
The National Union of Students (NUS) urged the inquiry to examine the graduate earnings repayment threshold and interest rates.
However, the government maintained that the current student loan system safeguards lower-earning graduates, with repayments linked to earnings and loans written off after their term ends.
Public Opinion Shows Growing Doubts Over Degree Value
Separate research published on the same day indicates that one-third of people now believe a university degree is not worth the time and money invested.
The British Social Attitudes survey, which has monitored public opinion on key issues including university education for decades, revealed that 34% of respondents in 2025 agreed that a university education "just isn't worth the amount of time and money"—a rise from 14% in 2005.
This represents the highest level of concern about the value of a degree in 20 years.
Simultaneously, there has been a decline in the proportion of people who think attending university leaves graduates "a lot better off" in the long term, dropping from 50% in 2005 to 36% in 2025.
MPs to Hear Graduates' Concerns on Debt and Interest Rates
Against this backdrop of public unease, the Treasury Select Committee of MPs will consider the worries of graduates regarding the size of their debts and the interest rates applied.
Graduates who took out Plan 2 loans between 2012 and 2023 are among those most concerned.
Gemma, now employed by a technology company, contacted the BBC via Your Voice to express her frustration.
Upon graduating in 2016, her debt stood at 34,105, but her latest balance statement shows it has risen to 41,908 due to interest accumulating faster than her repayments.
"It feels like I'm constantly chasing a debt that gets bigger over time; it feels like climbing a mountain."
Gemma stated that her degree was worth it, as it enabled her to move from a low-income background to a job earning just under 50,000 annually, but living with the loan is "draining."
Now 33 years old, she said that student loans have influenced her decision to delay starting a family with her partner because, although repayments pause during maternity leave, interest continues to accrue.
After 30 years, any unpaid loan balance is cleared, effectively by the taxpayer.
Strong Graduate Feedback and Written Evidence Submitted
The intensity of graduates' feelings is evident, with over 50,000 individuals submitting written evidence to MPs. Many graduates reported that they did not fully understand the terms of their student loans when they agreed to them.
Graduates in England repay 9% of their earnings above a threshold, which is set to be frozen at 29,385 from April 2027 for three years. This freeze means more graduates will begin repayments earlier.
The NUS has called on the government to reconsider this decision.
The graduate campaign group Rethink Repayment argued that freezing the repayment threshold contradicts the original terms of the student loans.
Alex Stanley from the NUS stated there must be a longer-term "course correction" to prevent a generation from being unable to buy homes or start families.
Universities UK Highlights Graduate Benefits Despite Challenges
Vivienne Stern MBE, Chief Executive of Universities UK, acknowledged that the labour market is challenging but noted that data shows graduates "are more likely to have a job, earn more and have better health."
"A university education doesn't just benefit the individual. If we want our country to grow, we need more graduates entering the labour market."
Government Defends Policies on Repayment Threshold and Interest Rates
The government has defended the decision to freeze the repayment threshold and capped the interest rate on Plan 2 loans at 6%.
In a statement, it said:
"We recognise that some graduates have concerns about the cost of student loan repayments and understand why this is an important issue."
The statement added that the government had increased the graduate repayment threshold for the first time since 2021 and reintroduced some targeted maintenance loans.
