Tories vow cuts to student loan interest repayments
BBC World
February 22, 2026
AI-Generated Deep Dive Summary
The Conservative Party has announced plans to reduce interest rates on certain student loans, specifically targeting Plan 2 loans taken out between 2012 and 2023. Kemi Badenoch, the party leader, highlighted that these loans, which were introduced under a previous coalition government and tripled tuition fees, have left many graduates feeling disadvantaged. With an estimated 5.8 million borrowers affected, the move comes amid growing pressure on the government to alleviate student debt.
Under the current system, interest rates are tied to the Retail Prices Index (RPI) plus up to 3%, depending on income. Badenoch's proposal caps this at RPI only, currently 3.8%. This change would simplify repayment structures and reduce financial burdens for many graduates. However, the government has defended its stance, with Chancellor Rachel Reeves emphasizing that lower inflation will naturally decrease interest fees.
Critics, including Labour MPs like Lucy Powell, argue that Plan 2 loans are unfair and punitive, especially given frozen repayment thresholds. The debate underscores broader concerns about debt sustainability and access to education for future generations.
This policy shift not only addresses immediate financial relief for graduates but also reflects a larger societal discussion
Verticals
worldpolitics
Originally published on BBC World on 2/22/2026