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Look at interest rates to reduce student loan repayments

Last updated 3 months ago

We will look at the interest rates on loan repayments with a view to reducing the burden of debt on students.

Conservative Party Manifesto 2019, p.37

Our verdict

  • This is a promise to review the interest rates of student loans and try to reduce the debt burden on higher education students.
  • In March 2020, the government announced a reduction in the interest rate for student loans taken out prior to 2012, but that was triggered by a decrease in the Bank of England base interest rate and was not part of a broader review process. In January 2021, the Skills for Jobs white paper laid out plans for a new ‘Lifelong Loan Entitlement’ for post-18 education to be introduced in 2025, but did not mention a review of loan interest rates.
  • The white paper announced plans to consult on the Lifelong Loan Entitlement, but with no evidence to date of a systematic review, despite calls from university vice-chancellors for a temporary waiver of student loan interest during the coronavirus pandemic, this policy is ‘not started’.

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