Question to the Department for Education:

To ask the Secretary of State for Education, what plans she has to replace the Retail Prices Index with the Consumer Prices Index as the basis for calculating interest on Plan 2 student loans.

The department recognises that the student finance system is not working as fairly or effectively as it should and we continue to look at financially sustainable ways to make the system fairer for students, graduates and taxpayers.

We have already taken action by capping the maximum interest rates on plan 2 and plan 3 loans at 6% for the 2026/27 academic year. This protects borrowers from the risk of inflation shocks.

The Office for National Statistics has confirmed that it will bring the methods and data sources used to calculate owner occupiers’ housing costs into the retail prices index from February 2030. The government will continue to consider the appropriate treatment of inflation measures within the student finance system as part of its ongoing consideration of higher education funding and student support arrangements.