Student loans inquiry responses show ‘massive scale of frustration and upset’

More than 52,000 graduates have told a parliamentary inquiry they feel misled and financially strained by the UK student loan system, with 92% calling the interest and repayment terms unreasonable [1]. The Treasury select committee's inquiry revealed widespread discontent, with 81% of respondents saying the combined financial impact of loan repayments and taxation was worse than expected [1]. A majority, 57%, admitted they did not understand the loan terms before borrowing [1]. One graduate described being told repayments would be "less than a phone bill," but now pays "hundreds of pounds a month," calling it "a complete lie" [1]. The debate centers on 'Plan 2' loans, where repayments are often dwarfed by monthly interest accrual, causing debts to grow [1]. A key flashpoint is the government's decision to freeze the repayment salary threshold at £29,385 until 2030, breaking a prior commitment to uprate it annually with earnings [1]. Official promotional materials from the Department for Education had repeated the claim of annual adjustments [1]. This freeze has triggered accusations of 'mis-selling' [1]. In response to pressure, the government has capped the Plan 2 loan interest rate at 6% from September [1]. A government spokesperson stated the system "protects lower-earning graduates" and that any outstanding balance is written off at the loan term's end [1]. The scale of the response, according to committee chair Meg Hillier, shows "massive scale and strength of frustration and upset" that MPs must address [1].