Question to the Department for Education:

To ask the Secretary of State for Education, if she will commission an independent review into how student finance products, including Plan 2 loans, are communicated to prospective students, with particular regard to transparency and informed consent.

Plan 2 student loans were devised by previous administrations and students in England starting degrees under this government have different arrangements. Since the 2023/24 academic year, new students in England receive their loans on Plan 5 terms and conditions, not on Plan 2 terms. As Plan 2 loans are not available for prospective students in England, there is no impact on existing borrowers.

Students sign the terms and conditions of student loans before any money is paid to them. Student loans already contain borrower protections. For example, repayments are linked to income, not to the amount borrowed or interest applied. Repayments are made at a constant rate of 9% above the earnings threshold. Borrowers earning under the earnings threshold are not required to make repayments. Any outstanding loan, including interest built up, is cancelled at the end of the loan term with no detriment to the borrower, and debt is never passed on to family members or descendants.

Student finance and higher education funding is a complex, interconnected system, and we are considering a range of options to make the system fairer. However, funding arrangements must be considered to ensure they are fiscally responsible.