Students: Loans
The question
To ask the Secretary of State for Education, what assessment she has made of the potential impact of maintaining the Plan 2 student loan repayment threshold at its 2026-27 level for three years from April 2027 on the disposable income of graduates earning below median earnings.
Answered by Treasury
The department has produced the following analysis regarding the impact of freezing the Plan 2 repayment and interest thresholds for three years starting April 2027:
| Average lifetime repayments (2024/25 financial year prices) | ||||
Baseline (£) | Post- 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 | |
If a borrower is earning above the repayment threshold and their income stays the same, their repayments will remain the same. If a borrower is not earning above the repayment threshold and their income remains the same, they will continue to not be required to make any repayments.
The department will release an equalities impact assessment, including the impact on lifetime repayments, alongside other borrower impacts for the Plan 2 repayment threshold and interest threshold freeze announced at the Autumn Budget. Published results may differ from those provided due to model and data updates.
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