MPs open inquiry into England student loan system

An inquiry by MPs into the student loan system in England begins on Tuesday, with evidence from student organisations and experts.

The National Union of Students said the inquiry should examine the graduate earnings repayment threshold and interest rates. The government said the current system protects lower-earning graduates because repayments are linked to earnings and loans are written off at the end of their term.

New research published on Tuesday found that 34% of people now agree a university education "just isn't worth the amount of time and money," up from 14% in 2005. This is the highest level of concern about the value of a degree in 20 years. At the same time, the share of people who believe going to university leaves graduates "a lot better off" in the long run has fallen from 50% in 2005 to 36% in 2025.

The Treasury Select Committee will hear from graduates about the size of their debts and the interest rates. Among those most affected are graduates who took out Plan 2 loans between 2012 and 2023.

Gemma, who graduated in 2016 and now works at a tech company earning just under £50,000 a year, told the BBC her debt rose from £34,105 just after graduation to £41,908 because interest has outpaced her repayments. She said the degree helped her move from a low-income background into a better job, but living with the loan is "draining." "It feels like I'm constantly chasing a debt that gets bigger over time; it feels like climbing a mountain," she said. Now 33, she said the loans have contributed to her decision to delay starting a family because interest would continue to accrue during maternity leave.

More than 50,000 people have submitted written evidence to MPs. Many graduates said they did not understand the terms of their loans when they signed up. Graduates in England repay 9% of earnings above a threshold that is due to be frozen at £29,385 from April 2027 for three years, meaning more will begin repaying earlier.

The graduate campaign group Rethink Repayment said the repayment threshold freeze goes against the original terms of the loans. Alex Stanley of the NUS called for a longer-term "course correction" to prevent a generation from being unable to buy homes or start families.

Vivienne Stern, chief executive of Universities UK, said the labour market is challenging but data shows graduates "are more likely to have a job, earn more and have better health."