Student loans: Phillipson says freeze will cost average graduate £8 a month
BBC World
February 24, 2026
AI-Generated Deep Dive Summary
Education Secretary Bridget Phillipson has defended the decision to freeze the repayment threshold for student loans in England, stating that this will result in an average increase of £8 per month for graduates. She emphasized that while the government is committed to addressing challenges in education and finance, it cannot solve every issue immediately. Phillipson confirmed that the repayment threshold will rise to £29,385 in April before being frozen for three years instead of increasing with inflation.
The freeze has already caused financial strain for some graduates, particularly those earning above the current threshold. Tinuke Bamiro, a 24-year-old graduate with a Plan 2 loan, shared her struggles with higher tax rates and increased repayments tied to her income. She revealed that her side hustle in social media earnings pushed her into a higher tax bracket, forcing her to pay 9% of her income over £28,470 for her student loans. George Holmes, another graduate, cut his work hours from five to four days a week due to the financial burden, allowing him to save money by managing household tasks himself.
Plan 2 loans, introduced in England and Wales between 2012 and 2023, come with high interest rates—6.2% during study and up to RPI plus 3% after graduation. This means borrowers like Tinuke and George face significant financial challenges as they repay their loans. For instance, Tinuke’s £75,000 loan grew to nearly £90,000 due to interest and the pandemic's impact on her studies. Meanwhile, Holmes has had to rethink his financial priorities, focusing on saving for a deposit rather than overpaying his pension.
The issue of rising student debt is not isolated to England; it reflects broader global concerns about education costs and income inequality. Campaigners argue that freezing repayment thresholds unfairly burdens graduates already grappling with high living expenses and career demands. Critics say the government’s decision, while framed as “tough but fair,” overlooks the long-term financial struggles faced by many graduates.
This debate highlights the growing divide between rising tuition fees, stagnant wages
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Originally published on BBC World on 2/24/2026