Student Loans Contents


1.In 2012, a fundamental shift in the way universities are funded took place. The major changes—often referred to as the “2012 reforms”—saw the cap on tuition fees raised from £3,000 to £9,000 (with tuition fee loans increased accordingly) and teaching grants significantly cut. Alongside this, the repayment threshold was increased from £15,000 to £21,000, and positive real interest rates were applied to student loan debt. Amongst other things, the 2012 reforms allowed the Government to relax controls on the number of students universities are able to recruit. The 2012 reforms had their genesis in the Browne Review—an independent review of higher education funding and student finance, led by Lord Browne of Madingley and published on 12 October 2010.1

2.The student loan system remains the subject of regular debate, with much attention paid to its fairness and sustainability. It is a topic that is likely to remain high on the political agenda for the foreseeable future, not least due to the Prime Minister’s announcement that the Government will be undertaking a major review of university funding and student financing.2

3.The Committee has examined various aspects of the student loan system, including the impact of the system on public finances, the marketisation of higher education, and issues faced by students. However, the inquiry has not considered the optimal level of higher education funding. For its final evidence session as part of the inquiry—with the then Minister of State for Universities, Science, Research and Innovation, Jo Johnson (who was replaced by Sam Gyimah on 9 January 2018)—the Committee took to Twitter, asking those with experience of the student loan system to submit questions for the Committee to ask on their behalf. The Committee would like to thank all of those that participated in this initiative.

4.Higher education is a devolved issue, and the focus of this inquiry was largely on the English system. It should also be noted that this report focuses primarily on post-2012 student loans, often referred to as “Plan 2” student loans. Finally, the Committee recognises that the higher education sector comprises a diverse range of institutions, but the focus of this inquiry has been mainly on universities.

2 Speech by Theresa May to the Conservative Party Conference 2017, Renewing the British Dream, 4 October 2017

15 February 2018