Starmer pledges to reform 'broken' student loans system

Sir Keir Starmer said he will explore ways to make the student loan system fairer, while ministers are reported to be considering changes to interest rates and the repayment threshold.

Sir Keir Starmer told MPs he will explore ways to make the student loan system fairer. His comments came during Prime Minister's Questions amid growing concern about loan costs. The Prime Minister's official spokesman said ministers might consider lowering interest rates and changing the repayment threshold. The November budget froze the repayment threshold at £29,385 for three years, which is expected to raise payments for many graduates. Key points: - Starmer said Labour inherited a 'broken' student loans system and will look at ways to improve fairness. - Ministers are reported to be considering reducing interest rates and adjusting the repayment threshold, but officials gave no timeframe and said work continues. - The November budget froze the repayment threshold at £29,385 for three years. - Plan 2 loans charge interest at RPI inflation plus up to 3% depending on earnings; Kemi Badenoch has proposed limiting that to RPI only. - Consumer champion Martin Lewis urged the Chancellor to reverse the decision and is due to meet Kemi Badenoch to discuss student loans. Summary: The government says it is reviewing elements of the student loan system while Labour has pledged to seek fairer arrangements. Ministers have signalled possible changes ahead of the spring statement next week, and a meeting between Kemi Badenoch and Martin Lewis is scheduled. It is not yet clear which specific measures, if any, will be announced.