To: Prime Minister Andy Burnham
Andy Burnham: fix the broken student loans system in this Budget
Millions of graduates are being ripped off by their student loans.
The Government must urgently fix the broken student loans system by:
- Increasing the Plan 2 repayment threshold in line with average earnings growth since 2016.
- Capping student loan interest at CPI inflation.
Why is this important?
Recently, the Treasury Select Committee’s inquiry concluded that the student loan system is ‘broken’ and ‘unfair’ and that ‘the Government must now take the necessary steps to fix it.’
Successive governments have changed student loan terms years after graduates took out their loans, meaning graduates will now repay tens of thousands more on average over their lifetime than originally agreed.
Punitive Plan 2 interest rates, which reached 8% in 2024, mean most graduates see their loan balance grow despite making repayments. 83% have seen their balance increase since leaving university, while the average graduate needs to earn over £63,600 before their balance falls each year.
Young people are already struggling to buy homes, start families and save for retirement. The broken student loan system is making things worse.
Andy Burnham needs to act now. With the Budget on 28 October 2026, fairer student loan terms must be part of it. There is no time to waste.
