Disappointment as Rachel Reeves silent on student loans

Unions have accused the government of “betraying” graduates after chancellor Rachel Reeves ducked making any changes to student loans in her Spring Statement. 

Speaking in Parliament on 3 March, Reeves presented the latest economic forecasts to MPs but did not share details of any specific policy updates, including mooted changes to student finance. 

The chancellor had previously said the speech would not be a major fiscal announcement, instead committing to giving major updates once per year at the autumn budget.

However, with public outrage growing over the level of debt among graduates with Plan 2 loans, some hoped that Reeves may announce reforms to the student finance system. 

The government has indicated that it is looking at changes to student finance, but it is unclear when these plans will emerge. 

Reeves was challenged by politicians on the issue after her speech. 

“Graduates are being ripped off,” said Daisy Cooper, Liberal Democrat MP for St Albans. “They’ve studied hard. They have done everything they were told to do but they are facing eye-watering repayment costs and they are struggling to get on in life. 

“The chancellor could have used today’s Spring Statement to end the repayment threshold freeze, putting £100 back in graduates’ pockets in the first year, rising to £210 in the third. Why didn’t she?”

As well as scrapping the freeze on the repayment threshold, the Liberal Democrats have said some public sector workers should have their debt written off after 10 years of service and have called for an independent oversight body to be established. 

Reeves responded that it was “extraordinary” to hear the Liberal Democrats “have the nerve to raise student financing, when they trebled tuition fees when they were in government and created the Plan 2 system”. 

In a statement, Amira Campbell, president of the National Union of Students, said the Treasury had “missed an opportunity”. 

“You cannot fix a broken funding model by making it even more unfair,” she said.

“Upfront, we want to see the chancellor unfreeze the repayment threshold, and put money back into the pockets of graduates. Fundamentally, student finance needs reform. Labour keep saying they inherited a broken system. We say, well then, what are you going to do about it?

“Student finance is a plague on the houses of all parties. This Labour government have a generational opportunity to invest in young people, and we hope they seize it.”

Jo Grady, general secretary of the University and College Union (UCU), said the government had “betrayed the millions of graduates drowning in debt by refusing to lift a finger to help them”.

“Decades of enforced pay deductions cause real harm, undermine the social contract between a government and its citizens, and inflict lasting damage on the country’s growth,” she continued. 

“Labour needs to fix this mess by ending the debt burden and addressing the root cause of the crisis: an outdated and under-resourced higher education funding model.”

helen.packer@timeshighereducation.com