Students: Loans
The question
To ask the Secretary of State for Education, what estimate her Department has made of the proportion of Plan 2 borrowers graduating between 2016 and 2023 whose total lifetime student loan repayments, including interest, are projected to exceed the net present value of the graduate earnings premium attributable to their degree.
Answered by Josh MacAlister
The department does not hold estimates of lifetime repayment costs for Plan 2 borrowers by earnings bands.
The Autumn Budget included freezes to Plan 2 repayment and interest thresholds for at their 2026/27 financial year level until April 2030, when they will increase annually by inflation.
The following analysis of the impact of freezing the repayment and interest thresholds to aid the decision:
Average Lifetime repayments (2024/25 financial year prices) | |||||
Baseline | Policy | Impact | |||
£ | % | ||||
Entire cohort | £27,000 | £28,300 | £1,300 | 5% | |
Average | |||||
Lifetime graduate earnings decile | 1 | £2,000 | £2,000 | £0 | 0% |
2 | £4,300 | £4,700 | £400 | 9% | |
3 | £7,700 | £8,100 | £400 | 5% | |
4 | £11,600 | £13,000 | £1,400 | 12% | |
5 | £16,900 | £18,500 | £1,600 | 9% | |
6 | £23,100 | £25,200 | £2,100 | 9% | |
7 | £31,300 | £33,600 | £2,300 | 7% | |
8 | £41,200 | £43,500 | £2,300 | 6% | |
9 | £54,500 | £56,100 | £1,600 | 3% | |
10 | £59,100 | £59,500 | £400 | 1% | |
We also do not hold the proportion of borrowers projected to repay of their student loan than the graduate earnings premium attributable to their degree.
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