Accuse mis-selling of student loans call freeze reversal

A cross-party committee of MPs has accused the government of "misselling" student loans and called for the reversal of a planned freeze on repayment thresholds, arguing ministers have a "moral obligation" to honor the original terms offered to graduates. The House of Commons Treasury Select Committee published a report on Tuesday, July 7, 2026, describing the student loan system as "broken and unfair."

The report focuses on a policy announced by Chancellor Rachel Reeves in an autumn 2025 budget to freeze the repayment threshold for Plan 2 student loans for three years, starting in April 2027. The threshold will remain at £29,385 until 2030, rather than rising with inflation or average earnings as was originally promised when the loans were introduced in 2010. This means graduates will repay 9% of their income above that fixed amount, and as wages rise, their repayments will increase year-on-year.

The committee, chaired by Dame Meg Hillier, stated that reversing the freeze is a "modest change that would not eat up vast resources" and would help repair trust. It concluded that successive governments have taken "the politically convenient option" of shifting financial burdens onto...