Politics
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27 May 26
16:59
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06 Jul 10
Thousands of people have told a parliamentary inquiry that they did not understand the terms and conditions on their student loans before they took them out.
More than 52,000 people responded to a call for evidence by the Treasury Committee for its inquiry on the taxation of graduates - more than half said they did not understand what they had signed up for.
The inquiry is looking at all student loan plans in England and whether repayment terms are "reasonable".
Treasury Committee chairwoman Dame Meg Hillier, said "the massive scale and strength of frustration and upset is powerful."
The inquiry was launched following controversy over Plan 2 loans, which were issued in England between September 2012 and July 2023 and are still issued in Wales.
Graduates with Plan 2 loans have been paying back 9% of everything they earn over the repayment threshold which currently stands at £28,470.
This threshold will remain frozen at £29,385 from 2027 to 2030, rather than rising with inflation.
That means graduates will effectively start repaying sooner and those earning above the threshold will see a greater proportion of their salary subjected to student loan repayments than they would have done.
In April, after the inquiry was launched, the government said interest on some student loans in England will be capped at 6% in the next academic year to protect graduates from the risk of rising inflation due to the Iran war.
Campaigners have welcomed this but called for wider reforms to the system.
Alex Stanley, vice-president of the National Union of Students, said the data showed "how damning the situation is".
"Students and graduates already knew this was the case, because we are living it. Governments have repeatedly changed the terms, in a move that no bank could do, making the conditions worse while we have no option but to take the financial hit".
As part of its inquiry, the committee invited anyone over the age of 16 to share their experiences.
Of the 49,357 respondents who have taken out student loans:
40,373 said the financial impact of repaying their student loan was worse than they expected
45,843 said that they think the terms are not reasonable
28,275 said that they did not understand the terms and conditions of their student loans before they took them out
25,291 said they would not take their student loan out if they were given the choice again
However, most said they would not have been able to attend higher education without a student loan.
More than 52,000 people responded to a call for evidence by the Treasury Committee for its inquiry on the taxation of graduates - more than half said they did not understand what they had signed up for.
The inquiry is looking at all student loan plans in England and whether repayment terms are "reasonable".
Treasury Committee chairwoman Dame Meg Hillier, said "the massive scale and strength of frustration and upset is powerful."
The inquiry was launched following controversy over Plan 2 loans, which were issued in England between September 2012 and July 2023 and are still issued in Wales.
Graduates with Plan 2 loans have been paying back 9% of everything they earn over the repayment threshold which currently stands at £28,470.
This threshold will remain frozen at £29,385 from 2027 to 2030, rather than rising with inflation.
That means graduates will effectively start repaying sooner and those earning above the threshold will see a greater proportion of their salary subjected to student loan repayments than they would have done.
In April, after the inquiry was launched, the government said interest on some student loans in England will be capped at 6% in the next academic year to protect graduates from the risk of rising inflation due to the Iran war.
Campaigners have welcomed this but called for wider reforms to the system.
Alex Stanley, vice-president of the National Union of Students, said the data showed "how damning the situation is".
"Students and graduates already knew this was the case, because we are living it. Governments have repeatedly changed the terms, in a move that no bank could do, making the conditions worse while we have no option but to take the financial hit".
As part of its inquiry, the committee invited anyone over the age of 16 to share their experiences.
Of the 49,357 respondents who have taken out student loans:
40,373 said the financial impact of repaying their student loan was worse than they expected
45,843 said that they think the terms are not reasonable
28,275 said that they did not understand the terms and conditions of their student loans before they took them out
25,291 said they would not take their student loan out if they were given the choice again
However, most said they would not have been able to attend higher education without a student loan.
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Replies: 18
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Over half did not understand the terms of a simple loan , maybe university isnt for them if at the age of 18 you dont understand that .
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It's impossible to fully understand terms, if the terms are changed since loan was taken out.
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I'd be more worried about other half.
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I was just reading it says over half did not understand the terms and conditions before they took it out , so over half took out a financial product they did not understand .
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Tuition fees were just another way of off-booking National Debt.
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The law is very clear. Ignorance is NO EXCUSE. Why does anyone who fails to read the terms of a legal document deserve more sympathy than someone who reads and understands every word?
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How can you read the terms of a document you sign
at time and conditions are changed 10 years later. Inquiry needs to do a job on behalf of those ripped off Just like rip off banks were held to account |
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They said they didnt understand the terms and conditions before they took them out , ie the terms and conditions at the time , not in the future
it is irrelevant if the terms did or did not change in the future , they did not understand the terms and conditions at the time they signed . |
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50% out of Work after graduating , can't find a Job , I thought there was a Million vacancies couple of years back ,Its a Lose Lose Situation
Need to bang these oligy Courses on the Head IMVHO |
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They said they didnt understand the terms and conditions before they took them out , ie the terms and conditions at the time , not in the future
But they were asked "in the future" so they may have thought they understood them at the time, but time as taught them they did not, as it wasn't what they signed up for, so couldn't reasonably have understood them. |
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70% responding their loan repayments had a material impact on their financial planning for the future.
Gosh, what a revelation this is. Wait until they find out that Mortgages, council tax and credit card payments have a similar effect. |
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sounds like another 'WASPI Women' saga in the making.
"But I didn't know this would happen?" should be answered by "Well you should have known" and that's that, but instead there will be 15 years of committees and inquiries. |
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I wonder how many would buy shares and be shocked they have lost money , the value of your investment may go up or down
oh if i had known i would never have bought them |
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That's a strawman mrstrawman.
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Talking about credit cards did n t take the banks to find a way for credit card to be used for gambling again.
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long
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Many People seem to struggle with maths but ace other exams.
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The interest rate on student loans is now quite high compared to the bank rate. I can remember when my boys were students. I gave them enough to pay their fees then told them to take out the student loan and put it on deposit and make a a 2% profit. Not possible now.
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