Question to the Department for Education:

To ask the Secretary of State for Education, what assessment she has made of the potential impact of the (a) Plan 5 student loan repayment threshold and (b) annual pay for someone on the minimum wage in a full-time job from 1 April 2025 on the net income of graduates with student loans.

In 2022, the department conducted a government consultation to assess the impact of policy reforms on higher education funding and finance, including changes to repayment thresholds from Plan 2 to Plan 5. More details on the consultation can be found here: https://assets.publishing.service.gov.uk/media/62223cfb8fa8f549071fc82c/Higher_education_policy_statement_reform_consultation_-_Equality_analysis.pdf.

Comparing the previous threshold of £28,470 under Plan 2 with the new threshold of £25,000 under Plan 5, the monthly repayments under the new repayment plan would result in an individual who was previously earning £28,470 and not repaying their loan, to now repaying approximately £26 per month.

From 1 April 2025, the National Minimum Wage has increased to £12.21 for workers aged 21 and over. If working a standard 37.5 hours per week, a minimum wage worker will earn £23,809.50, which is below the annual threshold for both Plans 2 and 5. This calculation is based on the average actual weekly hours of work for full-time workers.