Student Loans

Caroline Nokes Excerpts

Wednesday 18th March 2026 Commons Chamber

[Madam Deputy Speaker (Caroline Nokes)]

I inform the House that the Speaker has selected the amendment in the name of the Prime Minister. I call the shadow Secretary of State.

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[Laura Trott]

My hon. Friend is spot on. It is not well known that apprenticeship degrees are more oversubscribed than Oxford and Cambridge. These are things that young people want to do, and that is why we are trying to expand them. Instead of celebrating the expansion of low-value degrees, the Government should ask whether it is right to continue pushing young people down a path that leaves them with debt but no clear prospects.

[Madam Deputy Speaker (Caroline Nokes)]

I call John Slinger. [Hon. Members: “Hear, Hear!”]

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[Helena Dollimore]

The Opposition talk about amnesia. Does my hon. Friend agree that it is they who have collective amnesia about the system they created? My generation certainly do not have amnesia about the debt repayments we made when Liz Truss crashed the economy and sent interest rates soaring—that is what the Conservatives presided over. We do not have collective amnesia about them abolishing maintenance grants for the lowest income students. It is this Government who are acting for my generation with the Renters’ Rights Act 2025—

[Madam Deputy Speaker (Caroline Nokes)]

Order. I just remind Members that interventions need to be shorter than that.

[Georgia Gould]

rose—

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[Georgia Gould]

I thank the hon. Member for that comment, and that is why we are supporting maintenance grants to help students with the cost of living.

I will conclude by saying that our approach to further reform of the system will be deliberate, evidenced and fiscally responsible. We are here not to tear down the house, but to repair the roof that was left to leak.

[Madam Deputy Speaker (Caroline Nokes)]

I call the Liberal Democrat spokesperson.

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[Ian Sollom]

The point is to allow the market and the regulation of that market to decide. [Interruption.] I will make some progress.

[Madam Deputy Speaker (Caroline Nokes)]

Order. To be helpful, the hon. Member might reflect on the fact that the microphone is in front of him; it makes it much harder for Hansard and for the viewing public to pick up his words if he faces the back of the Chamber.

[Ian Sollom]

Thank you, Madam Deputy Speaker.

I will turn to the threshold and the interest rate—areas on which we do substantially agree with the Conservative motion’s diagnosis, if not its proposed remedy. In the system as it stands, the interest rate matters financially only for those who repay in full, which most graduates do not. That is by design to share the costs between the graduate and the state. It means that the largest benefit of the Conservatives’ proposal would flow to the highest earners—those who repay completely. As analysis from the Institute for Fiscal Studies has shown, it would be regressive in its distribution, which is why more thought is required on interest structure.

On the threshold, the picture is more straightforward. Before the election, the Education Secretary promised that graduates would pay less under Labour, as the shadow Minister said, and, in their first Budget, the Government left the threshold rising. Then, in their second Budget, the Government froze the threshold for three years from 2027.

Ministers have cited a £5.9 billion figure as the yield of this change, but we should be clear about what that figure is: it is the discounted present value of extra repayments across nearly 30 years, with the bulk sitting in the 2030s, 2040s and 2050s. The annual cash impact during this Parliament is relatively small, and the change barely moves the needle on the Chancellor’s own fiscal rules. Graduates will bear a real and immediate burden in their payslip for the remainder of their loan for a cash-flow improvement that is modest in this Parliament and does nothing at all for the Chancellor’s balanced Budget rule. Of all the choices in November’s Budget, why did they make this one?

I note that the Government’s amendment today welcomes a commitment to making the system fairer, and such commitments should be welcomed. However, graduates are waiting for action. Let me therefore set out what the Liberal Democrats would do. First, we would unfreeze the plan 2 threshold immediately and tie it to earnings, as was originally promised. Secondly, we would restore meaningful maintenance grants. Students from the poorest families can borrow £1,284 less today in real terms than in 2020-21. The £1,000 grant reaches about 10% of students, restricted to specific subjects. I think we can do better on maintenance policy: grants must be available regardless of subject, and the parental income thresholds that have been frozen since 2008 must be urgently uprated.

Thirdly, we would establish a royal commission on graduate finance, including plans 2, 3 and 5—plans 3 and 5 have terms that are, in several respects, even harsher. All those plans should be in scope. It should also have independent oversight of key parameters. That is not to delay, but to look seriously at fairer interest structures, total repayment caps and progressive repayment rates, and, critically, to build the cross-party settlement that is the only real protection against the next Government squeezing graduates again.

The system has been treated as a fiscal convenience rather than a social contract by the previous Government, and now by this one. Graduates deserve better.

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[Several hon. Members rose—]

[Madam Deputy Speaker (Caroline Nokes)]

Order. There will be an immediate five-minute time limit.