Students: Loans
The question
To ask the Secretary of State for Education, what is the evidential basis for her view that graduates will pay back £8 more a month on average due to the freezing of the repayment threshold for student loans.
Answered by Josh MacAlister
Monthly repayments for a borrower earning above the repayment threshold in a scenario with no threshold freeze was calculated as £8 lower in the 2027/28 financial year compared to the repayments of the same borrower in a scenario with a freeze. This is calculated as 9% (the repayment rate) of the difference between the frozen threshold and the non-frozen threshold. This figure was based on Office for Budget Responsibility (OBR) inflation forecasts from the 2025 Spring Statement.
Following updated OBR economic forecasts released on 3 March 2026 as part of the Spring Statement, this figure has been recalculated and remains £8.
For borrowers earning less than the threshold calculated without a freeze, the increased repayments compared to the freeze scenario will be less than £8, and borrowers earning below the frozen threshold will continue to repay nothing.
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