{"id":117741,"date":"2026-02-22T12:45:00","date_gmt":"2026-02-22T12:45:00","guid":{"rendered":"https:\/\/en.econostrum.info\/uk\/?p=117741"},"modified":"2026-02-22T12:33:44","modified_gmt":"2026-02-22T12:33:44","slug":"graduates-squeezed-as-student-loan-costs","status":"publish","type":"post","link":"https:\/\/en.econostrum.info\/uk\/graduates-squeezed-as-student-loan-costs\/","title":{"rendered":"Graduates Squeezed as Student Loan Costs Climb and Government Signals Review"},"content":{"rendered":"\n

The Education Secretary has indicated she is prepared to examine the operation of Plan B student loans<\/strong> following growing concern over rising repayment costs. Speaking amid mounting criticism of the scheme, Bridget Phillipson acknowledged frustrations among graduates but declined to commit to immediate changes.<\/p>\n\n\n\n

Her remarks come after the Chancellor\u2019s November budget confirmed that the salary threshold for repayments will remain frozen at \u00a329,385 <\/strong>for three years. With interest rates tied to inflation, many borrowers are expected to repay more over time, intensifying debate about fairness and long-term affordability.<\/p>\n\n\n\n

Frozen Thresholds and Inflation-Linked Interest Drive Concerns<\/strong><\/h2>\n\n\n\n

Under the current Plan B system, graduates begin repaying their loans once their earnings exceed \u00a329,385. According to the Government\u2019s post-budget position, that threshold will stay fixed for three years<\/strong>, a move that effectively increases the number of borrowers drawn into repayment as wages rise.<\/p>\n\n\n\n

Interest on these loans is set at the Retail Prices Index (RPI<\/a>) inflation rate plus up to 3%<\/strong>, depending on a graduate\u2019s income. This structure has drawn criticism from some commentators and campaigners, who argue that the combined effect of frozen thresholds <\/strong>and variable interest places sustained financial pressure on those in their 20s and 30s.<\/p>\n\n\n\n

When asked directly whether reforms were forthcoming, Ms Phillipson told the BBC\u2019s Sunday With Laura Kuenssberg<\/strong> that she would \u201clook at it, of course I will\u201d, while adding that it was \u201cgalling that the very people who designed, implemented and delivered that system are now complaining about the fundamental problems that they see within it<\/em>\u201d. Her comments were widely interpreted as a pointed response to Conservative criticism.<\/p>\n\n\n\n

Pressed further on Sky News\u2019 Sunday Morning with Trevor Phillips, she said: \u201cI get the problem. I see the issue<\/em>.\u201d Yet she also cautioned that the Government must weigh \u201ca question of priorities\u201d given the current state of the public finances.<\/p>\n\n\n\n

Political Divide Over University Access and Funding Priorities<\/strong><\/h2>\n\n\n\n

The debate has also exposed a broader divide over the future of higher education funding. The Conservatives have pledged to cap interest <\/a>at RPI alone and to reduce the number of university places, while expanding apprenticeships. According to statements from the party, these measures are intended to ease pressure on graduates and redirect resources towards vocational training.<\/p>\n\n\n\n

Shadow education secretary Laura Trott <\/strong>has argued that funding should be withdrawn from what she described as \u201cdead-end university courses\u201d, claiming they leave students with weaker employment prospects. The party has also proposed that the first \u00a35,000 of national insurance contributions paid by young people entering full-time work be placed into a personal savings account, which could be used towards buying a home.<\/p>\n\n\n\n

Ms Phillipson has rejected calls to scale back university admissions. She criticised proposals to shrink student numbers<\/strong>, saying they came from individuals who had benefited from higher education themselves and were now seeking to restrict access for others. \u201cI\u2019m not in the business of pulling up the drawbridge behind me<\/em>,\u201d she said, arguing that ambitious young people should continue to have the opportunity to attend university.<\/p>\n\n\n\n

While acknowledging the strain on graduates, the Education Secretary pointed to what she described as broader support measures, including expanded free childcare, frozen rail fares and investment in housing. For now, the Government\u2019s position appears to be one of review rather than reform, leaving many borrowers watching closely for any sign of concrete change.<\/p>\n","protected":false},"excerpt":{"rendered":"

Graduates face frozen repayment thresholds and interest linked to inflation. Bridget Phillipson says she will \u201clook at\u201d the system but stops short of promising reform.<\/p>\n","protected":false},"author":10,"featured_media":117743,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[44],"tags":[],"class_list":["post-117741","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","generate-columns","tablet-grid-50","mobile-grid-100","grid-parent","grid-33","no-featured-image-padding"],"_links":{"self":[{"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/posts\/117741","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/comments?post=117741"}],"version-history":[{"count":1,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/posts\/117741\/revisions"}],"predecessor-version":[{"id":117742,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/posts\/117741\/revisions\/117742"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/media\/117743"}],"wp:attachment":[{"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/media?parent=117741"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/categories?post=117741"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/tags?post=117741"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}