Martin Lewis, a well-known consumer advocate, has found himself in a heated dispute with Chancellor Rachel Reeves over student loans. The issue at the center of their clash is the decision to freeze the salary threshold for repayments on plan 2 student loans for three years.
For those unfamiliar with the system, plan 2 loans were taken out by students from England who began university between September 2012 and July 2023, and students from Wales who started university after that date. These loans are currently repaid at a rate of 9% of earnings above £28,470 per year.
Lewis has expressed his disagreement with the move, stating that he does not believe it is a moral thing for the government to freeze the repayment threshold in this way. He argues that students had a contract and were told they would pay back their loans under certain conditions, but now those conditions are being unilaterally changed without their consent.
The Chancellor has defended her decision, saying it is necessary to make sure the student finance system is sustainable for taxpayers. However, critics argue that this policy will disproportionately affect graduates who start working after 2025, as they will have to repay more of their loan due to the frozen threshold.
A recent YouGov survey found that nearly half of the public believes the government should write off some or all student debt, while 41% think graduates should continue to pay back their loans. The debate is ongoing, with Lewis suggesting that millions of plan 2 graduates could join together to write to their MPs to express their discontent.
The issue has sparked controversy, with many arguing that it is unfair for those who did not take out the loan to bear the cost of others' debt. Others argue that this policy is a breach of contract and could lead to long-term financial hardship for affected graduates.
For those unfamiliar with the system, plan 2 loans were taken out by students from England who began university between September 2012 and July 2023, and students from Wales who started university after that date. These loans are currently repaid at a rate of 9% of earnings above £28,470 per year.
Lewis has expressed his disagreement with the move, stating that he does not believe it is a moral thing for the government to freeze the repayment threshold in this way. He argues that students had a contract and were told they would pay back their loans under certain conditions, but now those conditions are being unilaterally changed without their consent.
The Chancellor has defended her decision, saying it is necessary to make sure the student finance system is sustainable for taxpayers. However, critics argue that this policy will disproportionately affect graduates who start working after 2025, as they will have to repay more of their loan due to the frozen threshold.
A recent YouGov survey found that nearly half of the public believes the government should write off some or all student debt, while 41% think graduates should continue to pay back their loans. The debate is ongoing, with Lewis suggesting that millions of plan 2 graduates could join together to write to their MPs to express their discontent.
The issue has sparked controversy, with many arguing that it is unfair for those who did not take out the loan to bear the cost of others' debt. Others argue that this policy is a breach of contract and could lead to long-term financial hardship for affected graduates.
I'm so done with governments making decisions like this 
! It's all about finding ways to justify increasing taxes on one group while 'helping' others out... meanwhile, the ones who actually took out those loans are being left high and dry 
. Like, come on Chancellor, can't you just be transparent about your intentions? 
. They're already struggling to find a job, let alone pay off their student debt on top of that 
. And what's the logic behind freezing the repayment threshold anyway? Is it really sustainable for taxpayers? 
I'm calling BS on this one 
. It's time for some real change and transparency in how student debt is handled 
.
and btw, 9% is a lot to pay back on top of their salary - that's like having an extra job 
. The fact that these students took out loans without knowing the exact repayment terms is kinda like signing a contract with no fine print... or so they thought 
. And honestly, if anyone's being unfair it's those who are expecting a free ride because they didn't take on debt like others did. The government's gotta make some tough decisions and this one might just be necessary to balance the books 
It feels like they're just trying to shift the burden on the next gen. I'm not saying it's all their fault, but come on, Chancellor Rachel Reeves, you gotta think about those who are actually feeling this 
. Freeze the threshold for three years and then what? Raise it again in 2026? 
It's like they're playing a game of loan limbo... who knows when we'll get out? 
. I remember when I was studying, we didn't have to deal with all this student loan nonsense 
. We just went to uni, paid our tuition fees, and that was it 
.
! I mean, think about it, these students were already on thin ice trying to pay back their loans after university, and now you're just freezing the threshold? It's not fair, mate! 
.
. They're not just going to magically have more money in their pockets after graduation, you know? 
It's just not right, you know?
It's not like these students had any say in the first place, but I guess that's what happens when you're born into a world where 'sustainable' means 'we don't want to pay out any more money'. Anyway, I'm sure it'll be totally fine for all those graduates who are already making six figures. 
. Like, can you even imagine if someone came up to you and said "hey, I've taken out a massive loan that you have no say in paying off, but we're gonna make it so the amount you have to pay increases dramatically after a certain point"? You'd be like "what's going on with this world?!" 
. I mean, think about it - these students took out loans thinking they'd pay them back in a certain way, but now that's being taken away from them 
The fact that nearly half of the public is calling for student debt to be written off suggests there's a lot of empathy out there 
, but what's needed now is some clarity and transparency from our politicians. We need to hear more about how this policy will benefit everyone in the long run 
.