Student Loans

Alex McIntyre Excerpts

Wednesday 18th March 2026 Commons Chamber

[Danny Beales (Uxbridge and South Ruislip) (Lab)]

I welcome the opportunity to discuss the student loans system. I took out a student loan under the plan 1 system. I am, fortunately, not young enough to have benefited from a plan 2, or, now, a plan 5 loan. However, despite having graduated with about £40,000 of student debt, I did consider myself fortunate—fortunate that I went to university under a Labour Government who had widened participation in higher education and created a fees, grants and loans system that enabled me to go to university and pay my living costs, which my single-parent family would not have been able to do without the grants that were, unfortunately, then cut by the Conservatives. I was happy to contribute towards my university education on the basis that most people at my school would not go to university, but a system that was one of contribution and fairness has become an aggressive system, and I believe it is time to review the plan 2, and now plan 5, loans systems.

I have heard from many of my constituents about the system as it is operating, including those at Brunel University. Recently, a teacher told me about the challenges of repaying her loan and how she is considering going part-time as a result of high interest rates. There are clearly a number of options that could be taken, such as changing the RPI basis to a CPI basis, capping lifetime interest costs and uprating the thresholds once again. Suggestions have also been made by the Good Growth Foundation.

It is important that, rather than going for any one of those changes, we properly analyse the options and the distributional impacts—work which the Conservative party clearly did not do given the half-baked proposals before us. It is quite baffling that the Conservatives moved this motion. Having been the architects of this regressive student loans system, having maintained the system for a decade, having continually frozen the repayment thresholds, and having trebled the fees when in coalition with the Lib Dems and cut maintenance grants for the poorest, they now pretend to be the party of students.

However, the mask has slipped in the last section of the Conservatives’ motion. They plan to pay for their minor change by reducing the number of people going to university. When they say that fewer young people should go to uni, they almost never mean that they should not, or that their children should not, and they do not mean that the universities in their constituencies should close. They are talking about other people, including those at universities such as Brunel in my constituency. They look down on the arts or “ology” courses that they feel have less benefit, and to be frank, that is elitism.

[Alex McIntyre]

My hon. Friend is making an excellent point about how, when the Opposition say they are going to cut funding for certain courses, they really mean that those courses will be available for wealthier students who can afford to pay for them without a Government subsidy. Does he agree that that will lead to a decrease in students from working-class backgrounds being able to access arts degrees?

[Madam Deputy Speaker]

Order. Members are being very generous with their time, but I remind them that I will be starting the Front-Bench speeches at about 6.40 pm, and we still have four more Back Benchers left to speak.

--- Later in debate ---

[Neil O’Brien]

Just one moment.

Analysis by the IFS found that total returns on going to university will be negative for about 30% of both men and women—and that is based on the cohort from the noughties. The problem now is probably even bigger because the graduate premium has declined further. As a result, many graduates now earn so little that they will never fully repay their student loans, leaving the taxpayer to cover about £8 billion in losses every year. That is why we would restore the number controls that existed for 70 years and use that to reduce the number of people who are on courses that are not good value for the taxpayer and not helping the young people, either.

To listen to Labour Members, anyone would think that there was not a single bad course, that every single course is totally brilliant and that there is no prospect of ever reducing spending on any single course. That is a fantasy world. We do not say about any other type of public service that every single instance of it is completely brilliant and there is no scope for improvement. We would use the savings from our proposal not just to abolish real interest rates on plan 2 loans but to double the number of apprenticeships for 18 to 21-year-olds so that quality apprenticeships are a real choice at age 18.

Why would we do that? Recent data shows that five years after finishing a course in 2018, the average level 4 apprentice was earning £32,000; by contrast, the average graduate was earning just £26,500 and the lower quartile of graduates were earning £19,000 or less. In many cases, a high-quality apprenticeship can be a better option than a low-value university course. That is why we would make that change.

[Alex McIntyre]

Labour Members have asked Conservative Members repeatedly if they can name a course or an institution that they would cut. The hon. Member for Runnymede and Weybridge (Dr Spencer) had to make up a course in David Beckham studies—as far as I understand, that never existed—to make the point. Does the hon. Gentleman have a real course in mind, or are his made up as well?

[Neil O’Brien]

We have already talked about that. If the hon. Gentleman wants a full list, he can go on my Substack and see a whole bunch of different institutions with low returns. He can also do better than that: he can look on the DFE’s website and see that many courses lead to low earnings. [Interruption.] It is not my purpose here to single out individual courses.

We have talked quite a lot about creative arts. The Institute for Fiscal Studies says that only 4.5% of those degrees represent a positive return to taxpayers. Some people will look at a statistic like that, say that it is only worth it for taxpayers 4% of the time and say, “That is not a problem. Let’s carry on shovelling money into something that is only working 4% of the time.” Other people would say, “We have to make choices, and we could use that money, which the Government continue to shovel into low-value courses, to fund more high-quality apprenticeships and cut repayments for betrayed plan 2 voters.”

Let me be clear: the current system is unfair. The Government admit it is unfair. Like so many other things, they say they will look at it. This is a Prime Minister who we can always rely on to do the right thing once we have dragged him by the nose to do it. As the former Deputy Prime Minister says, time is running out for this Labour Government, and it is time for them to stop moaning, grow a pair and fix this problem that they have moaned about.