Campaign Stories
The Government Has Responded to Our Student Loan Campaign. Here's What They Said (And What They Didn't)
March 10, 2026
The UK student loan system is broken and the numbers make that clear.
Graduates in England who started degrees after 2012 are on Plan 2 loans. They repay 9% of everything they earn above the repayment threshold, with interest charged at the Retail Price Index (RPI) + 3%. For many borrowers, that interest accrues faster than repayments reduce the balance. The result: millions of graduates face decades of repayments for a debt that, in real terms, never meaningfully shrinks.
According to the government's own response, the repayment threshold (the earnings level at which graduates begin repaying) has been frozen multiple times since Plan 2 was introduced in 2012. It was frozen between 2012 and 2018, frozen again between 2021 and 2025, and is now set to be frozen again until 2030, despite being raised to £29,385 in April 2026.
Organise has been campaigning on student loan reform for several years. The campaign relaunched with renewed urgency after the Autumn Statement in 2025, when Chancellor Rachel Reeves announced the repayment threshold would be frozen again, a decision that directly worsened the situation for millions of existing borrowers. When the Spring Statement in March 2026 came and went with still no commitment to reform, the campaign escalated, calling on the government to:
The response from the public was immediate. 2,546 people emailed the Treasury and Department for Education directly. A further 4,154 contacted their own MPs. These are not form-letter signatories, these are people who took time to tell the government, in their own words, what this system is doing to their lives.
Below is the full text of the formal response received from the Department for Education, reference number 2026-0058813.
Dear Organise campaign group,
Thank you for your emails on the topic of student loans, we hope you will share our response with your campaigners.
The student finance system removes upfront financial barriers so that everyone with the ability and desire to enter higher education (HE) can do so. It is right that those who can repay do so and under this system, where repayments are determined by income not total borrowed, graduates earning some of the highest salaries in the country contribute more towards the repayment of their student loan than workers who did not attend university or graduates on the lowest salaries.
On the plan 2 earning threshold freeze, we recognise the concerns among borrowers. Plan 2 student loans were designed and implemented by previous governments. Students in England starting degrees under this government have different arrangements. The fiscal situation this government inherited means we've had to make tough choices. Threshold freezes are part of the hard but fair decisions needed to protect taxpayers and students now and for future generations of students and workers.
As announced at the Autumn Budget, the plan 2 repayment threshold will increase to £29,385 in April 2026, and will remain at this level until April 2030, at which point it will increase annually by inflation. Maintaining the Plan 2 repayment threshold in financial years 2027-28, 2028-29 and 2029-30 is expected to have only small impacts on individual lifetime student loan repayments.
Lower earning graduates remain protected by this change. Graduates only begin repaying once their earnings exceed the threshold, paying 9% of income above that level. As repayments remain income-contingent if a borrower's salary remains the same, their monthly repayments will also stay the same. Even with the freeze, in year one the average borrower will repay around £8 more than had the freeze not been enforced.
Student loans function differently to a commercial loan. Repayments are calculated solely on earnings, not on amount borrowed or the rate of interest applied. Crucially, Plan 2 student loans are cancelled after 30 years (regardless of outstanding balances) and outstanding balances will not be passed on to descendants. A borrower entering repayment at age 21 will see any outstanding loan amount cancelled at age 51, long before they reach state pension age. Therefore, the student finance system is heavily subsidised by government and is a deliberate investment in our young people and the economy.
Students have access to a wide range of information across a range of platforms before they submit their loan application. Likely overall costs and benefits to them of undertaking HE can be weighed up alongside the financial cost of repayment across the length of the loan period. Student loan terms and conditions make clear that the conditions of the loan may change in line with the regulations that govern the loans. Students sign these terms and conditions before any money is paid to them. It is worth noting that threshold freezes are not new: since plan 2 was introduced in 2012 the earning threshold has been frozen for six years between 2012 and 2018 and for a further four years between 2021 and 2025.
On interest rates, to consider both students and taxpayers and ensure the real value of the loans over the repayment term, interest rates are linked to inflation by being set in reference to the retail price index (RPI) from the previous March and applied annually on 1 September. The RPI rate applicable from 1 September 2025 is 3.2%. This ensures that over a period of years, interest rates on student loans have been consistently linked to a widely recognised and adopted measure of inflation. While interest rates impact the overall amount borrowed and therefore the length of time spent in repayment, they do not alter the monthly repayment amount for borrowers.
Borrowers on Plan 2 terms have interest applied at RPI if earnings fall below the repayment threshold, ensuring that the loan's debt value will not grow in real terms. Additionally, due to the unique protections of student loans, borrowers earning under the repayment threshold are not required to make repayments.
Regarding a borrower applying for a mortgage, student loan balances do not appear on borrower credit records. However, student loan repayments will be considered alongside other living costs as part of the affordability check for mortgage applications.
As an additional borrower protection, interest rates on loans taken out after 2012, including Plan 2 loans, are automatically capped by the prevailing market rate (PMR) for comparable unsecured personal loans ensuring that borrowers are protected if market conditions change.
We are making the tough but fair decisions needed to protect taxpayers and students. We will continue to keep the terms of the student finance system under review to ensure that it remains fair, sustainable, and supportive of students from all backgrounds.
Yours sincerely,Department for Education
The government's letter is carefully written. Here is a plain-English breakdown of what it says — and what it leaves out.
The DfE's headline reassurance is that the freeze will cost the average borrower "around £8 more" per year. This is technically true for year one, and deliberately incomplete.
Interest at RPI + 3% continues to accrue on the total outstanding balance throughout the freeze. For borrowers whose salaries never reach the level needed to clear the loan within 30 years, and research consistently shows this is the majority of Plan 2 borrowers, a higher balance means more years of repayments before the debt is eventually written off. The cumulative impact of four more years of frozen thresholds is far greater than £8 per year, particularly for graduates in lower and middle-income work.
The campaign specifically called for interest on student loans to be scrapped. The government's response defended RPI-linked interest rates at length, but did not engage with the demand to end interest at all. There is no commitment, no review, no acknowledgement that this is a legitimate ask.
The government's most eyebrow-raising argument is that borrowers "signed terms and conditions" that allow the rules to be changed. This is legally accurate, but the idea that 18-year-olds applying for loans they had no practical alternative to somehow consented to an open-ended government right to worsen those terms is a troubling position for a government to take.
The letter closes with the government promising to "keep the system under review." This is not a commitment. It is the standard phrase used when a government wants to avoid saying no while also refusing to say yes. Combined with the finger-pointing at the previous government, while defending and extending those exact same policies, the letter amounts to a defence of the status quo dressed up as concern.
On Monday 16th March, the Organise team will walk this petition directly to Parliament and deliver it to Rachel Reeves — backed by over 30,000 members of the public.
The size of that petition matters. Every additional signature and share between now and Monday makes it harder for the government to treat this as a fringe issue. Ministers have already said publicly they want a "fairer" system, that language only emerged because of public pressure. The next step is to show that pressure is not going away.
Share the petition before Monday
The student loan system needs real reform, not warm words. The government has had its chance to respond. Now it needs to feel the full weight of public opinion.
If you found this breakdown useful, share it with anyone you know who is affected by student loan debt — friends, family, or colleagues who graduated after 2012 and are currently repaying. The more people understand what the government is actually saying, the harder it becomes to ignore.
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