Students: Loans
The question
To ask the Secretary of State for Education, if she will make an estimate of the potential impact to the public purse of (a) changing the student loan repayment rates for existing borrowers and (b) changing the income threshold at which student loans are repaid for existing borrowers.
Answered by Josh MacAlister
Reducing the repayment rate for existing student loan borrowers would reduce expected future repayments and therefore be a cost to the public purse. Increasing the income threshold at which student loans are repaid for existing borrowers would also reduce expected future repayments.
To support the long-term sustainability of the student loan system, we announced at the Autumn Budget 2025 that the Plan 2 repayment threshold will be increased to £29,385 in April 2026 and then frozen at that level for three years beginning April 2027.
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