PARLIAMENTARY WRITTEN QUESTION
(3 February 2026)

To ask the Secretary of State for Education, what assessment she has made of the (a) potential impact of accrued interest on the total debt balances of Plan 2 borrowers and (b) number of graduates whose monthly repayments are lower than the monthly interest added to their account.

Asked by:
Claire Young (Liberal Democrat)

As monthly repayment amounts for individual borrowers can change from month to month, it is not possible to produce a reliable monthly level figure. On an annual basis, the number of England-domiciled borrowers with Plan 2 loans which have become liable to repay where the sum of all interest amounts accrued is greater than the sum of all repayment amounts in the 2024/25 financial year, to the nearest 10,000, was 3.32 million. This includes all maintenance, tuition and advanced learner loans and includes borrowers who are currently earning below repayment threshold.

Unlike commercial loans, student loan repayments are linked to income, not to the amount borrowed or interest applied. Borrowers only start repaying their student loan once earnings exceed the threshold, after which they repay at a rate of 9% of income above the repayment threshold, meaning low earning borrowers are protected. At the end of the repayment term the majority of Plan 2 borrowers, other than those with sufficiently high earnings to repay their loan in full, will have any outstanding loan debt, including interest accrued, cancelled with no detriment to the borrower and debt is never passed on to family members of descendants.

Answered by:
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