When were student loan thresholds frozen?published at 13:09 GMT
By Anthony Reuben and Lucy Dady
Keir Starmer responded to Kemi Badenoch’s question about student loan thresholds being frozen by saying: “Under their government, student loan thresholds were frozen for 10 years.”
The threshold is the level of earnings at which graduates have to start paying off their student loans. The government announced in November that the threshold for Plan 2 loans would be frozen at its April 2026 level of £29,385 for three years instead of increasing in line with inflation.
Around 5.8 million students took out a Plan 2 loan between 2012 and 2023. The threshold was originally set at £21,000 and was supposed to increase each year from 2017. It was actually frozen in 2017, but increased to £25,000 in 2018. Then in 2022 it was frozen for three years at £27,295.
Badenoch has also recently been talking about the interest on the loans, which she said “increasingly feel like a scam”. The interest is calculated on the rate of inflation measured by RPI plus three percentage points.
This means anyone earning over £28,471 is currently charged up to 6.2% interest.
Graduates have been posting on social media saying they owe much more now than they originally borrowed, despite making repayments for years.
This chart shows how the interest added to their loan can outpace the amount they repaid. It is for someone who started an undergraduate degree in 2016, borrowed the average amount for fees and maintenance and has earned the average amount for a graduate.
