Student Loan Repayment Plans

Kevin Bonavia Excerpts

Wednesday 25th February 2026 Westminster Hall

[Kevin Bonavia (Stevenage) (Lab)]

It is a pleasure to see you in the Chair, Ms Lewell. I thank my hon. Friend the Member for Ilford South (Jas Athwal) for securing the debate.

Young people who work hard, gain qualifications and enter the workforce deserve a system that supports their ability to build secure and fulfilling lives. One constituent recently told me about the impact of the system on his family’s future. He is a young, working professional raising a daughter with his wife, and they are doing everything they can to provide security and opportunity for her. This year alone he has paid £852 towards his loan, but during the same period more than £2,300 of interest was added—nearly three times what he managed to pay down. He began university nearly a decade ago and the balance at the start of his repayment was £54,683. Today, despite working and making regular loan repayments, that balance has grown to £76,040—an almost 40% rise over the last 10 years. For a young parent trying to build a stable foundation for their child, the situation feels like running up a down escalator: always working hard, but never getting closer to the top.

Will the Minister think not just about incremental changes to the system, but fundamental, broad reform? That could include a graduate tax and, as the hon. Member for Macclesfield (Tim Roca) said, thinking about a balance between the taxpayer and the graduate repayments. I know the Minister will think about those carefully and I look forward to hearing his response.

--- Later in debate ---

[Jack Rankin]

I do not want to talk about each plan individually, but this does need to be looked at in the round, as the hon. Lady is quite right to say.

Returning to the hon. Member for Ilford South, I am glad that he recognised—which some of his colleagues did not—that the beneficiaries of student loans should be asked to contribute. He called for fairness. I agree with him that, as it stands, the balance is not quite right. To my mind—the hon. Member for York Outer (Mr Charters) spoke to this—the main issue that we have seen is the breach of the promise on thresholds being frozen and on interest rates being increased. I acknowledge that we did that in government, but it has happened most recently in the recent Budgets. That is morally indefensible.

The hon. Members for Leeds East (Richard Burgon) and for York Central (Rachael Maskell), who I do not think are in their places anymore, made similar contributions from a left-wing point of view. I gently suggest that the mechanisms for mass debt cancellations, or even more, what they call “progressive taxation”, is not where we need to be. I am afraid I consider that to be the politics of the magic money tree. When we look at what is happening, one of the things that graduates are upset about is the unreasonable marginal rates of tax that they face as graduates when the student loan is included. More so-called “progressive” marginal rates of income tax would be part of the problem, not part of the solution.

I am aware that many a Conservative ex-Minister has stood at the shadow Dispatch Box and criticised the Government for things they themselves were doing in the recent past, so I say this with some self-awareness, but I say to the hon. Member for Eastbourne (Josh Babarinde) that the Liberal Democrats have to be careful on this issue—the faces on the Government Benches when the Liberal Democrats made some of their remarks were quite the picture.

The hon. Member for Dulwich and West Norwood (Helen Hayes), who I believe is the Chair of the Education Committee, made a fair point about the balance in education between economic outcomes and the broader social good of education. I agree with her that the case for education is broader than just economic, but I suggest that there is a balance. We have to be careful about whether it is progressive to send working-class children on university courses that will laden them with debt, but not provide them with the economic outcomes that they might need. There is a balance there to tread.

My hon. Friend the Member for Chester South and Eddisbury (Aphra Brandreth) talked about the nuance here, between the oppressive interest rates and the 30-year repayment threshold.

[Kevin Bonavia]

The hon. Member made the point about working-class people thinking about whether to go to university and be loaded with debt. Why should they have that worry when people who have far more family income do not have to make that choice?

[Jack Rankin]

I am not sure that I recognise that statement. At the risk of pointing out the obvious, I was not born in the parliamentary seat of Windsor. I grew up in Ashton-under-Lyne and was the kind of child the hon. Member probably has in mind. My passion at school was history but I did maths and physics at university. That was partly an economic choice that gave me opportunities that my parents and people I went to school with could not have dreamed of. That was a sensible decision I made for me and my family. Dismissing that as a relevant factor is not progressive.