Student Loan Repayment Plans

Chris Hinchliff Excerpts

Wednesday 25th February 2026 Westminster Hall

[The Parliamentary Under-Secretary of State for Education (Josh MacAlister)]

It is a pleasure to serve under your chairship, Ms Lewell. I am grateful to my hon. Friend the Member for Ilford South (Jas Athwal) for securing today’s important debate on student loan repayments.

I would like to take a moment to collectively celebrate higher education and the transformational impact it can have for so many young people. We are right now in the peak UCAS application season. Although there are debates in this place about the merits and limitations of the current student finance system, I would not want any of these debates to put off those who have talents that university can accelerate and amplify. I acknowledge the interest shown in this debate on an issue that the Government will be looking at—I want to be clear about that up front. I recognise that many Members wanted to contribute, share personal stories and extend the arguments, but, because of time limits, we have not been able to hear the full breadth of the debate today. However, I doubt this will be the last time that Parliament considers this. The Minister for Skills in the other place, Baroness Smith, and I are alert to the issues.

I want to start by establishing some facts about the history of the plan 2 student loan system.

[Chris Hinchliff (North East Hertfordshire) (Lab)]

As a plan 2 graduate myself, before the Minister proceeds will he put on the record an acceptance that, with the misstep on the tuition fee repayment level, the cat is out of the bag? We need to deal with it in this Parliament. I urge him to reject the tedious, time-wasting suggestions from the Lib Dems and get on and deal with it with Labour values.

[Josh MacAlister]

I can confirm, as the Secretary of State for Education said earlier this week, this is an issue that we will, of course, look at. The plan 2 system was introduced in 2012 by the Conservatives and the Liberal Democrats in coalition. At the time, my party raised concerns about the design of that student loan package. When it was introduced, the threshold for repayment was only £21,000. Having said they would increase the threshold, the Conservatives and Liberal Democrats then froze it. They froze it in 2012, its first year; they froze it in 2013, in 2014 and in 2015: four years of Liberal Democrat and Conservative freezes to thresholds. The Conservatives then froze it in 2016. They froze it in 2017 and then again in 2021, 2022, 2023 and 2024. In total, there was a decade’s worth of freezes by parties who designed the model that they now stand here criticising. There is one phrase for that: crocodile tears.