Student loans and taxation of graduates

Treasury Committee Open Inquiry
Opened: 12 Mar 2026 Parliament page
In 1998 the Government first introduced tuition fees for higher education. Since then, the costs borne by students for their tuition has risen, and correspondingly so has the amount that students can borrow through student loans. In this inquiry the Treasury Committee will examine the student loan regime, the terms … Read more
2 Recommendations
25 Conclusions
1 Report
2 Oral sessions
16 Letters
3 Events
Activity timeline 20 events
8 Jul
2026
Correspondence
7 Jul
2026
Report published
1 Jul
2026
Correspondence
1 Jul
2026
Correspondence
1 Jul
2026
Correspondence
1 Jul
2026
Correspondence
1 Jul
2026
Correspondence
1 Jul
2026
Correspondence
1 Jul
2026
Formal meeting (private meeting) · The Wilson Room, Portcullis House
23 Jun
2026
Correspondence
23 Jun
2026
Correspondence
10 Jun
2026
Oral evidence
Oral evidence sessions 2 sessions
10 Jun 2026
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Oral evidence
Lucy Rigby KC MP · HM Treasury Rt Hon. Baroness Smith of Malvern · Department for Education
2 Jun 2026
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Oral evidence
Alex Stanley · National Union of Students Kate Ogden · Institute for Fiscal Studies Kieren Walters · Prospect Oliver Gardner · Rethink Repayment Sir Philip Augar · Post-18 Education and Funding Review Toby Whelton · Intergenerational Foundation Vivienne Stern · Universities UK
Title HC No. Published Items Response
1st Report – Student loans: Broken and unfair? HC 14 7 Jul 2026 27 Pending
Recommendations & Conclusions
27 results
1 Conclusion
1st Report – Student loans: Broken…
The student loans system is complex.
The student loans system is complex. The terms and conditions of loans must be examined within the context of the entire system. The overall level of subsidy provided by the state to the individual is the defining factor in how … Read more
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2 Conclusion
1st Report – Student loans: Broken…
Although the government claimed that its subsidy is in the region of 30% to 40%,...
Although the government claimed that its subsidy is in the region of 30% to 40%, we saw evidence indicating that individual contributions from students graduating today could be as high as 95%. That was not what the government or Parliament … Read more
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3 Recommendation
1st Report – Student loans: Broken…
In the long term, the government should return the balance between the individual and the...
In the long term, the government should return the balance between the individual and the state to a 50:50 split. (Recommendation, Paragraph 19)
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4 Conclusion
1st Report – Student loans: Broken…
Due to our remit, we have not scrutinised the relative value of different higher education...
Due to our remit, we have not scrutinised the relative value of different higher education courses. There may be valid arguments now and in the future about the proportion of costs borne by individuals and the state, depending on the … Read more
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5 Conclusion
1st Report – Student loans: Broken…
The government has described the student loans system as unfair and broken; the other key...
The government has described the student loans system as unfair and broken; the other key stakeholders in the system, universities and students, have agreed. We also agree. The system, however well-intentioned, has resulted in most students never paying back their … Read more
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6 Conclusion
1st Report – Student loans: Broken…
Intergenerational fairness is fundamental to maintaining a functional society.
Intergenerational fairness is fundamental to maintaining a functional society. A responsible government would pay close attention to it. Ministers must decide where to spend and cut based, at least partially, on which portions of the population need help or can … Read more
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7 Conclusion
1st Report – Student loans: Broken…
There is no definitive measure of what a fair student loan interest rate should be.
There is no definitive measure of what a fair student loan interest rate should be. The interest rate on each student loan plan must be considered within the context of the plan’s other terms and conditions. (Conclusion, Paragraph 41)
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8 Conclusion
1st Report – Student loans: Broken…
Considered in isolation, an interest rate much higher than inflation seems unfair, while an interest...
Considered in isolation, an interest rate much higher than inflation seems unfair, while an interest rate pegged to inflation that maintains the real- terms cost of a loan might seem fairer. If earnings fail to keep up with inflation, however, … Read more
HM Treasury
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9 Conclusion
1st Report – Student loans: Broken…
Progressive interest rates that are set higher than the rate of inflation increase the costs...
Progressive interest rates that are set higher than the rate of inflation increase the costs of higher education to high earners, but this may not seem fair to high earners who also pay higher amounts of income tax than graduates … Read more
HM Treasury
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10 Conclusion
1st Report – Student loans: Broken…
The government’s current 6% cap on student loan interest is a step in the right...
The government’s current 6% cap on student loan interest is a step in the right direction for protecting Plan 2 loan holders. However, capping the rate at 6% rather than allowing it rise to 7.1% as implied by March’s RPI … Read more
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11 Conclusion
1st Report – Student loans: Broken…
With its Plan 5 reforms, the previous government chose to replace income- contingent interest rates...
With its Plan 5 reforms, the previous government chose to replace income- contingent interest rates with rates pegged to inflation, which suggested that it considered income-contingent loans as problematic. Instead, it opted to shift the burden of paying for higher … Read more
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12 Conclusion
1st Report – Student loans: Broken…
It is regrettable that this government, along with all its predecessors, has continued to use...
It is regrettable that this government, along with all its predecessors, has continued to use RPI as its measure of inflation for student loans despite knowing it is statistically flawed. From 2030, RPI will be merged with CPIH, but this … Read more
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13 Recommendation
1st Report – Student loans: Broken…
We reiterate the recommendation of the then Treasury Committee in 2018: “The Government should abandon...
We reiterate the recommendation of the then Treasury Committee in 2018: “The Government should abandon the use of RPI in favour of CPI to calculate student loan interest rates.” We are disappointed that eight years later this recommendation has not … Read more
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14 Conclusion
1st Report – Student loans: Broken…
Governments both past and present have frozen the repayment thresholds of student loans, despite repeated...
Governments both past and present have frozen the repayment thresholds of student loans, despite repeated commitments by government when the loans were taken out that that would not happen. (Conclusion, Paragraph 61)
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15 Conclusion
1st Report – Student loans: Broken…
The government has exempted its student loan policies from consumer protection laws.
The government has exempted its student loan policies from consumer protection laws. No government should ever have taken advantage of this exemption by pursuing lending practices that cause consumer detriment. Deciding to go to university, what to study and taking … Read more
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16 Conclusion
1st Report – Student loans: Broken…
This government must reverse the repayment threshold freeze in the Autumn Budget.
This government must reverse the repayment threshold freeze in the Autumn Budget. The annual additional borrowing from this policy would be £355 million by the fiscal rule target year 2029–30. The government has a moral obligation to deliver this modest … Read more
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17 Conclusion
1st Report – Student loans: Broken…
The government has exempted its student loan policies from consumer protection laws and cannot be...
The government has exempted its student loan policies from consumer protection laws and cannot be held liable in law for mis-selling. However, we expect the government to comply with not only the law, but basic fairness and common decency. The … Read more
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18 Conclusion
1st Report – Student loans: Broken…
The Department for Education must in future ensure that all student loan promotional materials it...
The Department for Education must in future ensure that all student loan promotional materials it authorises, endorses, or links to in its own materials are compliant with the FCA Consumer Duty or the FCA financial promotions regime, even if the … Read more
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19 Conclusion
1st Report – Student loans: Broken…
As no government can bind its successors, all government promotions should clearly state that “the...
As no government can bind its successors, all government promotions should clearly state that “the future terms and conditions of your loan can be changed retrospectively by future governments”. The statement provided in some historic materials that “all policies are … Read more
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20 Conclusion
1st Report – Student loans: Broken…
Future student loans should be issued as a contractual agreement rather than as agreements governed...
Future student loans should be issued as a contractual agreement rather than as agreements governed by statute, to prevent future governments from changing the terms and conditions of the loans retrospectively to the detriment of the borrower without paying compensation. … Read more
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21 Conclusion
1st Report – Student loans: Broken…
The Student Loans Company must explicitly make it clear in its “speedbumps” that the government...
The Student Loans Company must explicitly make it clear in its “speedbumps” that the government can and does change the terms and conditions of the loans retrospectively after they are taken out. (Recommendation, Paragraph 86)
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22 Conclusion
1st Report – Student loans: Broken…
When asked about its compliance with the ‘red hand doctrine’, the SLC’s defence was that...
When asked about its compliance with the ‘red hand doctrine’, the SLC’s defence was that a student loan is not contractual, so it need not comply, and that in any case legal responsibility for its application forms actually lies with … Read more
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23 Conclusion
1st Report – Student loans: Broken…
The Department for Education and the Student Loans Company need to both jointly and separately...
The Department for Education and the Student Loans Company need to both jointly and separately establish who is legally responsible for what. In particular, they must establish whether the student loan application form makes students sufficiently aware of the unusual … Read more
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24 Conclusion
1st Report – Student loans: Broken…
The government’s written evidence to the Committee stated that individuals are required to sign a...
The government’s written evidence to the Committee stated that individuals are required to sign a ‘loan contract’, whereas the Student Loan Company has told us student loans are not contractual. This contradiction must be resolved. (Recommendation, Paragraph 89) Loan versus … Read more
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25 Conclusion
1st Report – Student loans: Broken…
Most current student loan holders will never pay off their loan, which will function like...
Most current student loan holders will never pay off their loan, which will function like a 30- or 40-year supplementary income tax. Many people told us that the debt acts as a psychological burden, unlike future income and national insurance … Read more
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26 Conclusion
1st Report – Student loans: Broken…
While defining student loans as loans, the Teaching and Higher Education Act 1998 does not...
While defining student loans as loans, the Teaching and Higher Education Act 1998 does not ban additional guidance being added to a student loan statement. We disagree with the government that additional information would confuse loan holders. There is potential … Read more
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27 Conclusion
1st Report – Student loans: Broken…
The Department for Education and the Student Loans Company should work together to design and...
The Department for Education and the Student Loans Company should work together to design and implement wording that can be added to the annual statements giving students an approximate indication of how much of their total loan is likely to … Read more
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Correspondence 16 letters
8 Jul 2026 Correspondence from Minister of State for Education regarding student loans session, dated 1 July 2026
Parliament page
1 Jul 2026 Student Finance England, Student Finance Presentation, August 2022
Parliament page
1 Jul 2026 Department for Education, Student Finance presentation, 2018
Parliament page
1 Jul 2026 HM Government, Student Finance Campaign presentation, January 2020
Parliament page
1 Jul 2026 HM Government, Student Finance Campaigns FAQs, January 2020
Parliament page
1 Jul 2026 Department for Education, Student Finance Campaign FAQs, 2019
Parliament page
1 Jul 2026 Department for Education, Emails approving presentations, December 2018
Parliament page
23 Jun 2026 Correspondence from Student Loans Company to Chair on Student loans and taxation of graduates inquiry, dated 29 May 2026
Parliament page
23 Jun 2026 Correspondence from Chair to the Student Loans Company on Student loans and taxation of graduates inquiry, dated 14 May 2026
Parliament page
27 May 2026 Correspondence from the Chair to the Department for Education, requesting information on Student Finance, dated 30 April 2026
Parliament page
27 May 2026 Correspondence from the Department for Education in response to the Chair's request for information on Student Finance, dated 15 May 2026
Parliament page
19 May 2026 Correspondence from the Interim Chair of the UK Statistics Authority on student loans, dated 14 April 2026
Parliament page
13 May 2026 Correspondence from Mary Kelly Foy MP on student loans, dated 15 April 2026
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13 May 2026 Correspondence from Jas Athwal MP, on student loans, dated 28 April 2026
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13 May 2026 Correspondence from Rt Hon Justine Greening, former Secretary of State for Education, on student loans, dated 14 April 2026
Parliament page
15 Apr 2026 Correspondence from the Secretary of State for Education on changes to student loan interest rates for 2026/27 academic year, dated 7 April 2026
Parliament page