Question to the Department for Education:

To ask the Secretary of State for Education, what steps the Government is taking to help ensure that those currently repaying Plan 2 student loans are able to pay off the initial capital owed and return to solvency.

Student loans are not like commercial loans, as they carry significant protections for borrowers, and repayments are linked to income, not to the amount borrowed or interest applied. As repayments remain income-contingent, if a borrower’s salary remains the same, their monthly repayments will also stay the same.

Repayments are made at a fixed rate above the earnings threshold and 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.

The government appreciates that making student loan repayments does have an impact on individuals. This is why there are unique protections for borrowers, and the finance system is heavily subsidised by taxpayers.