Student Loan System

Lord Sikka Excerpts

Tuesday 10th March 2026 Lords Chamber

Asked by

[Lord Sikka]

To ask His Majesty’s Government what plans they have for reforming the student loan system.

[Baroness in Waiting/Government Whip (Baroness Blake of Leeds) (Lab)]

My Lords, as the Prime Minister and the Secretary of State for Education have outlined in the other place, this is indeed a complex system. We are looking for ways to make it fairer, but to be fiscally responsible we must consider how any change would be funded. The Government aim to be supportive of students from all backgrounds, including, for example, students from low incomes. For this reason, we are introducing maintenance grants of up to £1,000 a year.

[Lord Sikka (Lab)]

My Lords, the unjust loan system forces many graduates to bear real rates of interest and make repayments while earning less than the median wage. Millions of people are prevented from buying a home or starting a family or business. The Government have many policy options. These include abolishing university tuition fees, as in Scotland, charging only nominal rates of interest, cutting the repayment rate and aligning the repayment threshold with the median wage. Which of these policies does the Minister find attractive?

[Baroness Blake of Leeds (Lab)]

I am tempted to say, “Who needs an Opposition?” I emphasise that this system is obviously getting a lot of attention at the moment. There is a lot of disquiet about what is happening to our young people. Of course, the Opposition have experience in this and, indeed, probably have a lot to contribute on just how difficult it is to move it forward. The whole premise running through this is how we can make the system fair and make sure that it is affordable for all young people, regardless of their family backgrounds and financial support, so they can access the best education opportunities in this country. I believe that is a prize worth fighting for. We need to look at this in detail and move forward as we can.