Over 120 MPs and peers call for an urgent review of the student loan repayment system
The signatories to the letter include the Lib Dem education spokesperson Munira Wilson, Tory shadow education secretary Laura Trott, Labour MP Stella Creasy, and the former Green Party leader Carla Denyer.
More than 120 MPs and peers have called for the government to conduct an urgent review of the system under which student loans are repaid.
The parliamentarians – which includes senior Labour, Tory, Lib Dem and Green figures – have written an open letter to the chancellor of the exchequer John Healey.
The letter read: “We write to you as a cross-party group of 121 MPs and peers to highlight a growing concern across the country: the compounding financial pressure on recent graduates and early career professionals due to the current structure of student loan repayments.
“While higher education remains a vital pathway for personal advancement and national economic growth, successive governments’ adjustments to repayment thresholds – together with high interest and marginal tax rates – are placing an unsustainable burden on the next generation of workers.
“For many middle-income graduates, the combination of income tax, National Insurance and student loan repayments means they see less than half of any hard-earned pay rise.
“At a time when the cost of living remains a primary concern, this significantly diminishes disposable income, delays milestones such as first-time homeownership and family formation, and disincentivises career progression.”
Last year, the then chancellor Rachael Reeves decided to freeze the Plan 2 student loan repayment threshold between 2027 and 2030. This means more people will be brought into having to make repayments on their student loans as wages increase.
The Treasury select committee has previously said that that the government had a ‘moral obligation’ to reverse the thresholds freeze and to reduce the rate of interest on student loans.
The average graduate debt currently stands at around £50,000.
The signatories to the letter include the Lib Dem education spokesperson Munira Wilson, Tory shadow education secretary Laura Trott, Labour MP Stella Creasy, and the former Green Party leader Carla Denyer.
Chris Jarvis is head of strategy and development at Left Foot Forward
Image credit: Airpix – Creative Commons
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