PARLIAMENTARY DEBATE
Student Finance (Review) - 15 September 2026 (Commons/Commons Chamber)

I beg to move,

That leave be given to bring in a Bill to require the Secretary of State to review student finance in England; to require the review to consider loan repayment arrangements and thresholds; to require the review to consider the terms and conditions applying to student loans when they were issued; to require the review to consider the relationship between student finance loan repayment thresholds and average earnings; and for connected purposes.

Before I begin, I wish to send my deepest condolences to the Prime Minister on the loss of his father. I am sure that the whole House will be thinking of them. I should also declare an interest, as a graduate with both a plan 2 loan and a postgraduate loan.

This is not the speech that I intended to make. In fact, it is not even the Bill that I thought I would be presenting. Originally, when I secured this slot, I was planning to present a Bill that would remove time restrictions on disability bus passes, but before I could get to my feet, or even table that Bill, the Prime Minister handed me my first big win in Parliament, for which I am eternally grateful to him. I thank him for that, and for his new approach to politics, which is about problem solving, not point scoring. I can only hope he continues in that spirit and hands me another big win today, because the timing could not be any better.

I want to start by paying tribute to the Chair of the Treasury Committee, the hon. Member for Hackney South and Shoreditch (Dame Meg Hillier), and to all the members of the Committee for their very thorough work on this matter, about which we heard earlier. Their report asks, “Student loans: Broken and unfair?” I think we all know the answer, on both counts: they are both broken and very unfair. Let me make it clear from the outset that this is not a single, individual political party’s failure. Every party that has sat on the Government Benches has had a bit of a shoddy record on this particular issue—Conservatives, Labour, and yes, even the Liberal Democrats, which might come as a surprise. In this regard, no one comes to the debate or to the Chamber with clean hands.

Honesty has to start with three things: the repayment thresholds, the terms that graduates were sold, and whether those thresholds have kept pace with earnings. I grew up in a former mining town, in a working-class family. My mum had me when she was 18, and I was the first person in my family to go to university. For people like me, taking out a student loan was not an option or a luxury; it was a necessity, and it was the only way I could get through the door of a university—Newcastle, where I secured a biochemistry degree and a master’s in public health. Today, my student loans, combined, stand at more than £65,000. Between my two loans, 15p of every extra pound I earn goes on repayments, on top of tax.

This is the cruellest part for many people across the country. The poorer your family, the more you have to borrow. In 2016, maintenance grants for poorer students were scrapped and replaced with loans, so the students who have the least borrow the most, graduate with the biggest debts, and are then charged interest on every penny. A system that was meant to be a ladder of opportunity has become a penalty for being born poor. That is not social mobility; it is social injustice, with interest.

When I signed up, like millions of others, I was told a story. Department for Education slides compared repayments with a mobile phone contract: about £15 a month, we were told. Government-commissioned videos told teenagers that the threshold would rise with earnings. It was sold like a phone contract, and paid back like a second income tax. The Treasury Committee examined those materials, and concluded that they amounted to mis-selling. No other lender in this country would be allowed to sell a loan to an 18-year-old on one set of terms, only to rewrite them when the ink was barely even dry. If a bank did that, the regulator would shut it down. When the Government do it, they call it a policy change. Ministers wrote themselves out of the Consumer Credit Act 2006, and they have been getting away with it ever since. With no regulator watching, borrowers are left in the dark.

When my university friends saw that I had this ten-minute rule Bill, WhatsApp groups that had not been active for a number of years suddenly lit up with everyone getting in touch. One friend, Jasmine, told me that she was refused a straight answer on what she owed and that her balance then jumped by a few thousand pounds because interest had not been properly added back in 2021. In her words, “I am livid.” My friend Rebecca had to open a case just to get back a refund she was owed. No customer of any other lender would put up with that.

In 2010, the Universities Minister told this House that the threshold would rise “periodically” to reflect average earnings and that

“The Government are committed to the progressive nature of the repayment system.”—[Official Report, 3 November 2010; Vol. 517, c. 924.]

That was not a hope; that was a promise made in this place. It has been broken again and again by Governments of all persuasions. The thresholds for repayment were frozen again at the last Budget for another three years from April 2027. On top of that is a system where the interest piles up from the day you take out the loan, before you can even repay a penny, and where you earn more, the higher the interest rate you are charged.

At its heart, this is an issue about fairness, and the injustice does not fall evenly. My friend Rebecca took maternity leave. While she was at home with her newborn, not making repayments and not earning, her balance rose by the best part of £2,000 in interest. Women have been charged interest for starting a family. Think of those living with long-term health conditions who cannot work full time or have to take time off sick. They are already fighting their bodies and now they watch their debt grow while their earnings often stall. This is damaging to our public services and our economy. I have heard from people who have turned down promotions because, after tax and loan repayments, the extra pay is simply not worth the extra responsibility. I have heard from doctors refusing extra shifts because once the higher tax rate, national insurance and the student loan repayments are added, they keep less than half of every extra pound. At a time when our NHS is calling out for extra staff and extra support, we are punishing those very people for trying to work harder.

We have a generation on track to be the first in modern times to be worse off than their parents. They did everything they were told: they worked hard, went to university and tried to better themselves. What did they get in return? In addition to a housing crisis, a property ladder with the bottom rung sawn off and a really grim graduate jobs market, they have had, added on top, a 9% tax that will earn on everything above the threshold before it ever reaches their bank account. I have friends who have put off having children because they cannot afford childcare while hundreds of pounds a month leave their payslip in student loan repayments. This is an injustice at its starkest: a generation told to borrow for the future are now paying for it with their future. The Prime Minister has rightly talked about bringing back hope. I agree with him wholeheartedly. There is no better place to start than honouring the deal that my generation were promised.

How have the Government responded to the Treasury Committee’s cross-party call to reverse the freeze, which it called “a moral obligation”? They state that they keep

“all aspects of the student finance system under review”,

which does not sound like they are going to reverse that freeze. Martin Lewis called it

“a very disappointing response that does little to help the millions of students already struggling.”

The Government’s answer is, in effect, that we will do better for future students, but millions of graduates are already paying under those terms today. They cannot wait for a better system to be built for people who have not yet borrowed a penny.

I said at the start that every party of Government have had a hand in this situation. I say it again, because it is exactly why I believe we can reach a cross-party consensus. No party can claim the moral high ground, so every party can help to be part of the solution. My message to the Government and the Prime Minister is simple: in the spirit of problem solving, not point scoring, will the Government commit to a genuine fix? Not another promise to keep things under review, but looking honestly at the deal graduates were promised and the deal they are getting. Restore the link between repayment thresholds and earnings. Guarantee that the terms will not be changed after people have signed them and put right the wrongs that have already been done. Let us make sure that that fix reaches every borrower, not just those who are yet to walk through a university’s door. The Prime Minister has already shown this House that when he hears a good case, he acts on it, and I am asking him to do so again. The Select Committee asked whether student loans are broken and unfair, and we know the answer. The only question left is whether, together, we will commit to putting it right.

I commend the tremendous efforts of Rethink Repayment, Ollie Gardner and the team who have been pushing on this issue. For the best part of two years, internally within my party, I have been banging the drum to try to make this an issue to which we Liberal Democrats can be part of the solution. I am really pleased that we have seen Members from across this House add their names in support of the Bill. I commend it to the House.

Question put and agreed to.

Ordered,

That Tom Gordon, Vikki Slade, Liz Jarvis, Ann Davies, Dr Danny Chambers, Siân Berry, Cat Eccles, Cat Smith, Christine Jardine, Layla Moran, Ruth Cadbury and Alex Sobel present the Bill.

Tom Gordon accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 15 January 2027, and to be printed (Bill 151).