Sir Ashley Fox MP is inviting residents to take part in a new survey on Conservative plans to reduce interest rates on Plan 2 student loans.
The proposal, announced by Leader of the Conservative Party Kemi Badenoch, would remove the additional 3 per cent interest currently charged above inflation on Plan 2 loans, those taken out by most students who started university between 2012 and 2023. Interest would instead be capped at the Retail Prices Index, stopping balances from rising faster than repayments.
Under the current system, graduates repay 9 per cent of their income over the threshold, yet many see their overall balance increase because of the added interest. National estimates suggest that a graduate with £40,000 of debt earning £50,000 could save around £26,000 over their lifetime under the proposed changes.
The policy would be funded by reducing 100,000 university places on courses that do not lead to strong career outcomes. Funding would instead be redirected into 100,000 additional apprenticeships each year for 18 to 21 year olds, helping more young people move into skilled and technical careers, including trades such as plumbing and electrical work.
Ashley Fox MP said, “I regularly hear about young people feeling like the current student loan system is stacked against them. Many are doing the right thing, working hard and making repayments, yet watching their debt rise because of the extra interest charged on top of inflation. This proposal would ensure graduates are not penalised for seeking to improve their prospects, while also expanding high-quality apprenticeship opportunities for those who choose a different route. I want to hear directly from residents, whether you are affected yourself or supporting a family member who is.”
Residents can take part in the survey by visiting Student Loans SNAP Survey | Ashley Fox and sharing their views.
