PARLIAMENTARY WRITTEN QUESTION
(4 February 2026)

To ask the Secretary of State for Education, what assessment her Department has made of the potential impact of maintaining thresholds for Plan 2 student loan repayments on trends in the level of repayments made by graduates; and what discussions she has had with the Chancellor of the Exchequer on the potential impact of maintaining this threshold on the marginal effective tax rate for graduates earning above that threshold.

Asked by:
Claire Young (Liberal Democrat)

The department produced the following analysis regarding the impact of maintaining the repayment and interest thresholds for Plan 2 student loans on the lifetime repayments made by borrowers:

Average lifetime repayments (2024/25 financial year prices)
Baseline (£)	Post- policy (£)	Impact
		£	%
Entire cohort		27,000	28,300	1,300	5
Average
Lifetime graduate earnings decile	1	2,000	2,000	0	0
	2	4,300	4,700	400	9
	3	7,700	8,100	400	5
	4	11,600	13,000	1,400	12
	5	16,900	18,500	1,600	9
	6	23,100	25,200	2,100	9
	7	31,300	33,600	2,300	7
	8	41,200	43,500	2,300	6
	9	54,500	56,100	1,600	3
	10	59,100	59,500	400	1

The department will release an equalities impact assessment, including the impact on lifetime repayments, alongside other borrower impacts for the Plan 2 repayment threshold and interest threshold freeze announced at the Autumn Budget. Published results may differ from those provided due to model and data updates.

The rate of repayment for undergraduate student loans remains at 9% on all income above the relevant threshold. Other factors, including any reliefs, pension contributions, or receipt of certain means-tested welfare benefits could adjust an individual’s effective tax rate.

Answered by:
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