Student Loans
Debate between Catherine West and Meg Hillier
Dame Meg Hillier
The Committee certainly received some evidence on that issue. There is a logic to not paying back the loan until that point, because students are mostly not working, so there would be a real challenge in paying it back while someone is an undergraduate or graduate student. The hon. Lady rightly highlights that that has caught a lot of people unawares, as they were not aware of how much it ratchets up. There is layer upon layer of complexity, and the fact is that parents do not fully understand the impact.
The hon. Lady says that she has children on plan 2 and plan 5 loans. The bigger picture, which I have looked at over many years, is that Governments of different colours keep changing the student loan package, and each package is more complicated than the last. Plan 5 is paid back over 40 years, but plan 2 is paid back over 30 years. Try keeping up with that! It is very confusing. The Government’s commitment to greater transparency is welcome, but it is only a first step.
Catherine West (Hornsey and Friern Barnet) (Lab)
On 27 March 2026, the Minister for Skills wrote to my hon. Friend the Member for Brentford and Isleworth (Ruth Cadbury) confirming that the Department for Education would release an equality impact assessment on student loan lifetime repayments and other borrower impacts for the plan 2 repayment threshold. Does the Chair of the Treasury Committee agree it is high time that the equality impact assessment was published by the Department?
Dame Meg Hillier
In that simple question, my hon. Friend raises a raft of issues. For most students, the only way that they can go to university is by getting a loan. There has been a big drive to get people to go to university who would not have been able to do so before, partly because they may be from poorer backgrounds. This Government have added in extra support through the maintenance grant and so on, but there are still huge costs on young people. It is really important that in making decisions, especially as they have committed to reviewing the student loans system, the Government really understand the impact on different cohorts.