"More than 20 Labour MPs spoke during a debate in Westminster Hall to call for changes to the system. Several criticised the decision to freeze thresholds as "moving the goal posts" and changing the terms of loans retrospectively. Athwal said the system was "in urgent need of reform" and "tinkering around the edges is not going to cut it"."
"This means that workers earning above that amount are dragged into making larger repayments on their loans than if thresholds had risen in line with inflation, while others will have to start repaying their loan earlier."
"For students in England, the interest rate is normally set by the RPI measure of inflation. It is currently 4.3% for anyone who started university in 2023 or later, but for those on Plan 2, who started university between September 2012 and July 2023, the interest is RPI, currently 3.8%, plus up to 3%, depending on earnings."
More than 20 Labour MPs have called for significant reforms to England's student loan system, criticizing high interest rates and recent policy changes. The government announced plans to freeze salary repayment thresholds for three years from April 2027, which will force graduates to make larger repayments than if thresholds had risen with inflation. Current interest rates vary by enrollment date and loan plan, ranging from 3.8% to 7.3%. MPs argue this threshold freeze retrospectively changes loan terms unfairly. Leading the parliamentary debate, Jas Athwal urged raising the salary threshold and cutting interest rates, stating the system requires urgent comprehensive reform rather than minor adjustments. Prime Minister Sir Keir Starmer responded that the government would explore ways to make the system fairer.
Read at www.bbc.com
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