Student Loans

Georgia Gould Excerpts

Wednesday 18th March 2026 Commons Chamber

[The Minister for School Standards (Georgia Gould)]

I beg to move

an amendment, to leave out from “House” to the end of the Question and add:

“recognises that the Government inherited the current broken student loans system, including Plan 2, which was devised by previous administrations; welcomes the Government’s commitment to make the system fairer and financially sustainable; further welcomes the support the Government is providing to young people through the Youth Guarantee; supports the Government’s target for two thirds of young people to achieve higher level skills by the age of 25, including reversing the decline in apprenticeships under the previous Government; and further supports the reintroduction of maintenance grants, which had been scrapped under the previous Government, to help ensure that background is not a barrier to opportunity for young people.”

I welcome the Opposition’s focus today on opportunities for young people, student loans and apprenticeships. I am pleased that the House has the opportunity to scrutinise this broken system devised by the Conservatives, who tripled tuition fees, introduced plan 2 loans and presided over a decade that saw a 40% drop in young people starting apprenticeships.

[David Reed]

We have heard the argument repeatedly that it was the Conservatives and the coalition Government that brought in these changes. I am someone with a plan 2 loan. I was in the generation that Blair told to go to university, and at no point did anyone in that Blair Government talk about how the jobs market would take on so many graduates or, most importantly, who would pay for those people to go to university. Does the Minister agree that the 50% of school leavers who went to university should be paid for by the 50% that did not?

[Georgia Gould]

I think it is really relevant to make sure that the public know who created this system—and not only created it, but froze those loans 10 times over the last 12 years—[Interruption.] I know that it is inconvenient for the Conservatives to be reminded of these truths, but we have lived through them.

[Simon Hoare (North Dorset) (Con)]

I must be suffering from some sort of political amnesia, because I was absolutely convinced that it was a Labour Government that introduced tuition fees in the first place. Maybe the Minister will correct me.

[Georgia Gould]

I was talking about plan 2—[Interruption.] The debate today that has been called by the Opposition is about plan 2 loans—a system that was created in 2012 by the Conservatives.

[Alex Sobel (Leeds Central and Headingley) (Lab/Co-op)]

I have read the motion and the amendment. Students today are on a new loan—the plan 5 loan—and Conservative Members have completely forgotten current students. The Government amendment talks about the system in the round. Can my hon. Friend reassure me that the Government are going to look at the system in the round and not just at plan 2, so that all students and graduates have a fairer system?

[Georgia Gould]

I thank my hon. Friend for his advocacy on this issue. I know that he represents a number of students, and this is something that he has raised continually. We have heard the concerns about student finance, and it is something that we will be looking at. I am really happy to take that conversation forward.

[Dr Murrison]

My constituents are not interested in the past, particularly the distant past; they are interested in the future. They have heard what the Conservatives would do, but we have yet to hear from the Government of the day what they will do. Will the Minister enlighten us?

[Georgia Gould]

I think that the past is really relevant. I was a council leader during the last Government and I saw the cuts to local youth services, to early years support and to all our public services. We lived through that time when young people really were at the back of the queue, and we are rebuilding from that through investment in tackling child poverty, in youth services and in schools, and through the historic investment in special educational needs and disabilities provision. Those choices that we are making really matter, and are relevant to the discussion we are having.

In terms of what we are actually doing, we are increasing the threshold to £29,385 this year, which will help to support people this year after the threshold was frozen for four years by the previous Government.

[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—

[Sir Desmond Swayne (New Forest West) (Con)]

I’ve got a short one!

[Georgia Gould]

I would be delighted to take the right hon. Member’s incredibly short intervention.

[Sir Desmond Swayne]

The Minister’s hon. Friend, the hon. Member for Leeds Central and Headingley (Alex Sobel), asked a perfectly reasonable question about looking at the thing in the round, and her answer was that she would take the conversation forward. I think we need more than that.

[Georgia Gould]

We have acknowledged the issues and the unfairness in the system. The Prime Minister, the Chancellor and the Secretary of State for Education have acknowledged that, and we have said that we will look at it.

I will make progress. Under the last Government, the number of young people not in education, employment or training rose by 250,000. Today, nearly 1 million young people are not in education, employment or training. That is the legacy of the Conservatives, but this Government are turning that around. We are renewing the post-16 education landscape and celebrating routes into vocational education not by restricting university, but by opening up new high-quality vocational routes. We are introducing new V-levels and new foundation apprenticeships and supporting students to get excellent university education across the country.

The Opposition talk a lot about higher education and suggest that too many young people go to university. It is interesting that they can never tell us who should no longer go or which courses they should not study.

[Laura Trott]

I just told you!

[Georgia Gould]

Did the right hon. Member tell me who should not go to university? I can tell the Conservatives that when they close the drawbridge, it is pupils from disadvantaged backgrounds who will end up not at university. That is the consequence. We are opening up access to apprenticeships and vocational routes not by closing down university routes, but by opening up other routes.

[Dr Luke Evans]

The Opposition have made the argument that 30% of courses leave people with a negative bank balance. That is the problem that we are trying to solve. We are not denigrating anyone for wanting to choose; this is about ensuring that the quality of the course means that people have a positive life outcome, not a negative one. Does the Minister agree with that principle?

[Georgia Gould]

We are absolutely committed to driving up the quality of all university courses, and we are acting on that.

Conservative Members have attacked arts and creative courses as the areas where they would like to see a reduction. We have just seen the British talent at the Brits and the Oscars. This is one of our highest-growth industries. We saw this in our schools when there was a reduction in education in the arts, and we are seeing it now as the Conservatives attack those courses in universities.

[Graham Stuart]

Young people in my constituency are looking for a bit of hope. How should they interpret the Minister’s answer to her hon. Friend, the hon. Member for Leeds Central and Headingley (Alex Sobel), and the fact that the Chancellor has said that young people are at the back of the queue? From that very recent mood music, it does not sound as if there is much to hope for from this Government.

[Georgia Gould]

I have spent the last few months travelling around the country talking to young people about the investment that Labour is putting in to support young people with special educational needs and to support schools and youth clubs. That is what the Labour party is doing in power, and there is huge hope that comes from that. Those are the areas where we need to prioritise investment.

The chance to study in higher education for those who want to and who have the ability to changes lives. We are determined to support students who want to go to university to fulfil their aspirations. We must not lose sight of the value that student loans provide in enabling that and levelling the playing field at the point of access. They remove the up-front financial barriers to study and enable students to repay when they are earning.

[Ruth Cadbury (Brentford and Isleworth) (Lab)]

The Minister is making an excellent and powerful speech on the motion. One aspect of the broken student loans system is the maternity penalty. When someone is on maternity leave, the interest on a student loan continues to accrue, despite income dropping below the repayment threshold. That means that graduates with student loans who take maternity leave face a longer repayment period and a greater total loan amount. Will the Minister take that concern back? Will the Government have a look at this perceived inequality?

[Georgia Gould]

I thank my hon. Friend for making that point. As she knows, increasing security for women on maternity leave is a really important part of this Government’s agenda, and that is why we are taking forward the Employment Rights Act 2025. It is important to note that in the system, if income goes below a threshold and someone is out of work generally, they will not have to pay. That is very different from a commercial loan, but I will absolutely take her point back.

The student loan system delivers tuition fee funding—some £10.7 billion in 2024-25—to our world-class higher education sector, a sector that remains by any objective metric one of our nation’s greatest exports and a global beacon of intellectual excellence. It is important that we remember what is at stake here. From pioneering laboratories developing quantum computing and agritech to those at the forefront of advanced manufacturing and genomics, our universities are the primary engines of the research that will define the 21st century, and the impact of our universities goes beyond their pivotal contribution to the economy and the careers of individual learners. By exposing students to diverse perspectives and expanding their social horizons, these institutions help our young people to build the networks, resilience and life skills that define a person long after they have graduated.

[Rosie Wrighting (Kettering) (Lab)]

I have a creative arts degree. Not only did it give me the opportunity to meet people, importantly, it enabled me to access the fashion industry as somebody growing up outside of London. Does the Minister share my concern that removing those degrees would create London-centric creative industries?

[Georgia Gould]

I thank my hon. Friend for that powerful point. Her creative arts degree was of huge benefit in getting her to this place.

[Dr Murrison]

Does the Minister think that the creative industries are the exclusive province of universities? If that is what she thinks, can I invite her to visit Trowbridge college in my constituency—an excellent further education college—and see what it is doing with multimedia to give kids the skills they need, as part of the growth in the economy that the Government are sorely lacking?

[Georgia Gould]

Of course I recognise the critical role that FE colleges play in supporting children into the creative industries. That is why this Government are backing FE colleges after the previous Government failed to do so. However, we do not believe that closing down routes to university is the best way to support our creative industries. We can have both, and we can have opportunities for both.

[Laurence Turner]

Is it not also the case that kids from working-class backgrounds were increasingly shut out of traditional apprenticeship routes under the previous Government because of the artificial entrance requirements, which employers said were blocking them from hiring the best? Employers said that those requirements should be scrapped, but the Department for Education blocked that under its previous management.

[Georgia Gould]

We saw a 40% reduction in young people’s apprenticeships over a decade. That was the legacy of the Conservative party.

While the foundational principles of our higher education funding and student finance system might be solid, they are straining after more than a decade of neglect and mismanagement, on top of the structural flaws baked into the system by the Conservatives. First, a legacy of seven years of frozen tuition fees has contributed in no small part to a significant and growing number of English higher education providers facing financial challenges. Analysis published last autumn by the Office for Students indicates that without mitigating action, some 124 providers—45% of those included in the OfS financial sustainability report—could face a deficit in 2025-26.

[Tim Roca (Macclesfield) (Lab)]

The Minister is making an important point. The economics of higher education are actually quite complicated; there is a great deal of cross-subsidy, with the humanities and the arts effectively supporting science, medicine and engineering courses and so on. Does the Minister agree that we should be worried that the Opposition parties’ proposals would put jobs and the viability of universities at risk?

[Georgia Gould]

My hon. Friend makes an important contribution to this debate.

The Government have taken the tough, immediate action that is required, including by making the difficult decision to increase tuition fees by forecast inflation, balancing the need to give the sector stability with fairness to students and taxpayers. We are also asking more of the sector: we expect higher education providers to demonstrate that they deliver the very best outcomes, both for those students and for the country, in return for the increased investment we are asking students to make. To achieve this, this Government will link future fees increases to university quality, as I have said. This will protect taxpayers’ investment in higher education and incentivise high-quality provision for students without taking away opportunities.

[Edward Argar (Melton and Syston) (Con)]

The Minister is typically generous with her time and courteous in the number of interventions she accepts. May I gently take her back to lines 3 to 4 of the text of the Prime Minister’s amendment on student loans, which state that this House

“welcomes the Government’s commitment to make the system fairer and financially sustainable”.

To avoid this sounding like jam tomorrow and to reassure young people—I have a lot of respect for the Minister, and I will be generous—can she give one or two concrete announcements today of specific measures that she is bringing forward that will achieve that commitment?

[Georgia Gould]

We are lifting the threshold, which will make a difference this year for students. We have already announced that, and we have said that we will continue to look at this matter as we look at a wide range of issues. We accept that the system created by the Conservatives is not fair.

More broadly, this Government are resetting the contract for young people across the landscape. Beyond our new deal for young people who do not go to university, we will support more young people into work and training through a £2.5 billion investment in the youth guarantee and growth and skills levy over the next three years and—this is incredibly concrete—we will support almost a million young people and deliver almost 500,000 opportunities to earn and learn.

[Andrew Pakes (Peterborough) (Lab/Co-op)]

I welcome this week’s announcement of the new deal for young people beyond university. One of the challenges in a seat like Peterborough is that not enough young people get to either apprenticeships or university. Does the Minister agree that one of the challenges we face is that we spend so much time in this place and in the media debating university routes as the path to success, but we do not spend half as much time as we need to discussing apprenticeships? The youth guarantee starts to put that right.

[Georgia Gould]

My hon. Friend makes an incredibly important point. We need to open up access to apprenticeships. That is why the Government are making this investment, and it is why we have set that ambitious target for young people to go to university and to access apprenticeships.

[Robin Swann]

On that point, does the Minister agree that there is another way? The Open University also allows people to earn and learn at the same time. The situation is not as simple as university or apprenticeship. There is a middle way and, as a former graduate of the Open University, I encourage the Government to support it.

[Georgia Gould]

We are committed to opening up those routes to lifelong learning, and we are setting out plans on that. I welcome that intervention.

[Dr Murrison]

With hindsight, does the Minister regret Tony Blair’s announcement in the late 1990s that more than 50% of school leavers should go to university? Would it not have been better to have said that all young people leaving school should either go to university or into high-quality apprenticeships or training?

[Georgia Gould]

Opposition Members were accusing me of talking about the past, but I think I was nine years old when that was going on. I do not regret the real focus on opening up access to university, because that opened it up to disadvantaged pupils who might never have had that opportunity. Today, we recognise that we need both those routes. There has not been enough investment or focus on vocational pathways. We absolutely agree with that, and we are putting that right. It is our ambition to have a more sustainable, more specialised and more efficient sector that better aligns with the needs of the economy.

[Mr Gagan Mohindra (South West Hertfordshire) (Con)]

The Minister is being generous with her time, and I thank her on behalf of Opposition Members. Does she believe that there is an oversupply of courses in higher education? She has spoken about trying to evolve and reform the model, and the concern among Opposition Members is that there seems to be pressure on a lot of children to go to university, even though they will not get a graduate bonus associated with that. A lot of us question the financial viability of HE. What are her views on that?

[Georgia Gould]

We want young people to have a choice: to go to university, to study, to take up an apprenticeship or to earn and learn. We want that range of routes to be available and for young people to have high-quality careers education, so that they know what the opportunities are in their local communities.

We want higher education providers to go further to give their students the best course and employment outcomes, ensuring that the sector remains globally competitive. The Government are committed to ensuring that higher education is open to all who have the ability and the desire to pursue it. In the 2028-29 academic year, we will be reintroducing targeted, means-tested maintenance grants of up to £1,000 a year, increasing the cash in students’ pockets without increasing their debt. To help students from the most disadvantaged backgrounds, we are already delivering on a commitment to future-proof maintenance loans by increasing them in line with forecast inflation every academic year to try to ensure that support keeps pace with financial pressures. In the academic year 2026-27, care leavers will become automatically eligible to receive the maximum rate of maintenance loans, which will provide vital extra support for one of the most vulnerable groups in society.

[Rebecca Smith (South West Devon) (Con)]

I welcome support for people from the most vulnerable groups who are heading to university, but will the Minister acknowledge that by enabling those groups to take the maximum amount of support, the Government are also enabling them to have the maximum amount of debt at the end of their university careers? A frequent problem throughout all this has been the fact that either the people in the middle who do not quite get the support that they need or those at the far end of the system who do need support are saddled with the most debt, because they will not have the parental assistance that would help them to leverage against the loan repayments for the rest of their careers.

[Georgia Gould]

I think it important to make it clear—some people watching the debate will be worried about this—that these are not normal loans, in that young people who are not earning, or are earning below the threshold, do not have to pay anything. In the long term, if they have not earned enough by the end of their careers, they do not have to pay the whole amount, and they do not have to pass that on to future generations.

[Dr Ben Spencer (Runnymede and Weybridge) (Con)]

I thank the Minister for giving way: she has been very generous with her time. I think there is a point of principle in this debate, and I should like to hear the Minister’s thoughts on it. Does she believe that there is any degree offered by a university in which it is not fair to invest taxpayers’ money? If the quality is not good enough, surely it is not fair for the individual to be indebted. Will the Minister concede that there probably are some courses, across the country, that it is not fair for the taxpayer to subsidise?

[Georgia Gould]

I have made it very clear that we want to increase the quality of courses, and that is one of the conditions that we attached to increasing the fees in a fair way, but we want to do that by ensuring that those courses are of high enough quality, rather than scrapping the opportunity for young people to go on them.

Looking further ahead, I can tell the House that the Prime Minister’s ambition is to see two thirds of young people in higher-level learning by the age of 25. With the lifelong learning entitlement, which will be launched in January 2027—a policy that the last Administration failed, year after year, to deliver—we are transforming higher education from a “one-shot” opportunity into a flexible and responsive system with learners at its centre. As was mentioned earlier, the LLE will allow learners to fund individual modules and reskill throughout their careers, at colleges and universities alike.

We now have a responsibility to ensure that the benefits of higher education are maintained for future generations, and to clean up a student loan system in which interest rates have been allowed to spiral and students are confused about what is the right path for them. We absolutely recognise that there are failings in the system, but it is not a system that we built; it was a system that the Conservatives created. We know that student loan repayments are a concern for graduates, which is why we increased the plan 2 repayment threshold last year and why we are increasing it again next month, to £29,385. Borrowers who earn below that amount annually will not be required to make any repayments at all. This threshold is higher than the median graduate salary three years after graduation.

Graduates generally go on to benefit from higher earnings, and it remains reasonable for those who gain the largest financial benefits from their degrees to contribute more towards the cost of their studies than those who have not gone to university, or graduates earning lower salaries. Lower earners will still benefit from the unique protections that student loans offer. Any unpaid loan balance, including interest accrued, will still be cancelled at the end of the loan term at no detriment to the individual, outstanding debt is never passed on to a borrower’s family, and having an outstanding student loan is not a barrier to accessing a mortgage. Student loan balances do not appear on borrower credit records, although regular student loan repayments will be considered, alongside other living costs, as part of the affordability check for mortgage applications.

I want to say how seriously the Government take the cost of living challenges that young people face. Too often this generation have found their challenges ignored. We are working hard to tackle these issues by extending Government-funded childcare, reducing energy bills, freezing rail fares, rolling out free breakfast clubs, building new homes and introducing the Renters’ Rights Act 2025.

Before Conservative Members once again line up to criticise the decisions that we have made, I would like to take a moment to remind them of their track record on this matter. Plan 2 student loans were designed and introduced in 2012 by the Conservative-Liberal Democrat coalition, with a repayment threshold of £21,000 per year and interest rates of up to 3% above inflation. Those are the very interest rates that the Conservatives and Liberal Democrats are now calling to be reduced. Having said that they would increase the plan 2 repayment threshold to reflect earnings, they froze it for four years. The Conservatives then froze it in 2016 and in 2017, and again from 2021 to 2024. In total, there was a decade of freezes by the opposition parties. It is their mismanagement that now necessitates a further freeze to the threshold. I do not remember any of this outrage from those Members when they created and built this system.

As we have heard, the Opposition’s solution is to cut courses and cut opportunities. We will not make reckless and unfunded changes to student loans. Student finance and higher education funding is a complex, interconnected system. We are considering a range of options to make the system fairer, but we must be fiscally responsible and consider carefully how change would be funded. Politics is about choices.

[Tessa Munt (Wells and Mendip Hills) (LD)]

Would the Minister consider doing something about the cost of accommodation in university towns and cities? Where I come from in north Somerset there is no university, and at the moment people do not really have the option to go anywhere except a city, which is incredibly expensive. Would she give some consideration to reducing those costs on ordinary working families?

[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.