Question to the Department for Education:

To ask the Secretary of State for Education, with reference to her Department’s press release entitled Interest rate cap introduced to protect Plan 2 borrowers, published on 7 April 2026, what assessment she has made of the impact of the cap on incentives for graduates to pursue higher education.

The government has taken decisive action to cap the maximum interest rates on Plan 2 and Plan 3 (postgraduate) student loans at 6%, instead of the Retail Prices Index (RPI) plus 3%, for the 2026/27 academic year. This short term protective measure removes the risk of a temporary increase in inflation causing loan balances to compound at an unsustainable rate.

The interest rate cap follows changes we have already made to the student finance system to improve it and make it fairer for students, graduates and taxpayers. This includes increasing the repayment threshold for Plan 2 loans to £28,470 in April 2025, its first increase since 2021, and increasing it again on 6 April this year, to £29,385. The department is also reintroducing targeted, means-tested maintenance grants from the 2028/29 academic year, providing students from low income households with up to £1,000 extra support that will not need to be repaid.