MSE News: Martin warns pledge to provide clear student loan info will NOT fix the 'Plan 2' crisis

MSE_Abby

MoneySavingExpert.com (MSE) founder Martin Lewis has said the Government's new pledge to give prospective university students clearer information about loan terms – including the fact that they can change in future – doesn't fix the current 'Plan 2' crisis. Martin welcomed the "small crumbs" of progress but said that overall, the response was "very disappointing" and "does little to help" those already struggling…

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https://www.moneysavingexpert.com/news/2026/09/student-loans-report/

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rjd185

There are in practice two unfair aspects of the Student Loans system as it stands - the financial repayment issues, and the value for money issues.

The value question doesn’t get quite as much air time but it is worth consideration. Our family’s experience is that the universities have maximised tuition fees to the cap and stripped actual tuition below acceptable levels. If we had our chance again, we would advise degree apprenticeships or work first then secure additional qualification as a better route.

Current family experience one - medical student (Plan 2 loan) so accumulating about 10K a year tuition fee debt. Those fees are supposed to be paying for tuition but there is practically no tuition being given. Placements are weakly managed, lectures comprise poor presentation of poor content, and so on. Compared to the medical training provided to my generation it is parlous to say the least.

Other current experience - near the end of an arts degree - different university and different learning proposition. Accumulates the same 10K tuition debt per year but while face time is more productive, last year ended with a single lecture in May given after a two month gap in all tuition, which makes the course appear two months longer than it actually is. The overall content of the three years could easily be delivered in two - lectures are so scarce that the cost per hour of tuition or assessment (which must be included) is unjustifiable.

Bizzywizard

I agree with rjd185!

My daughter is going into her second year at Uni, she is studying Law….its 8 Hours a week max!!!!!! She is paying the full £9500…or whatever it is now…its less than my 16 hour part time course I did 30 years ago at college! But they count 8 Hours as a full time course, its an insult!!!! The course finished on 28th March 2026…its really a 6 month course too, as they have loads of time off! Yet her friends were paying for halls for another 2 months!

The course is also recorded…so need to even bother turning up!

We did see if other Unis offered longer full time hours in Law…but its the same across the UK, so she chose to live at home, as she saw it as a waste of money.

She commutes 30 minutes on the train and won't bother with the maintenance loan this year (did it last year and its gone up by over £200 in interest already), we will just pay her train fair. She also works 15 hours per week at our local Boots, to support herself going out and also saving! Lots of her friends are rather skint and struggle to get part time work!

The amount the kids pay should be on the amount of hours per week and course length (how many weeks they are in lectures as I understand this can be different too).

silvercar

I think the value for money is a different issue. You can and should research the amount of context time, lectures, support etc before choosing a course. You know the fees, you know the end result ie a degree of a certain type in your chosen subject. You can research the university and the course, then you decide whether to choose the particular course and spend the money. What to a large extent you are doing is buying the degree. The price is 3 (or whatever) years study at fees of £9,790 per year. Nothing hidden here. If it doesn’t offer VfM in your opinion, then you don’t have to buy.

The changes in the student loan system are different. Particularly when the rules change along the way. For the vast majority of students (I think only about 10% of UK students don’t take a loan) student finance is the only way to afford university.

zathrasB5

The answer to fix the current crisis is actually very easy. When students start paying off their loan, the money goes to the capital. It does not pay off the interest. Then when the capital is paid off, the repayment works on the interest. This would make it much more manageable all round. Best of all it stops the financial institutions breaking the back of the future of this country and actually being forced to support it instead.

kaMelo

https://forums.moneysavingexpert.com/discussion/comment/82137874#Comment_82137874

Interest is compounded and charged on the total balance, paying money only off capital first doesn't reduce the balance upon what interest is charged. In essence, if they did what you suggest the outcome is exactly the same.

Which financial institutions do you think are breaking the back of the future of this country? The only supplier, and repayment collector, of student loans are the SLC who are non departmental public body of HM Government.

If your suggesting that HM Government should increase the amount of taxpayers money they provide to reduce the burden on students then that's a wholly different discussion.

2Protons

https://forums.moneysavingexpert.com/discussion/comment/82135980#Comment_82135980

She commutes 30 minutes on the train and won't bother with the maintenance loan this year (did it last year and its gone up by over £200 in interest already), we will just pay her train fair.

I think your making the common mistake of misunderstanding what student finance actually is in the UK - it essentially a grant based system (which covers your university fees & living costs) with a linked graduate tax masquerading as a loan but to complicate things it can functions like a loan for those who's 9% payment result in the balance of the money originally provided to the student + the interest decreasing as this could in theory mean the balance could reach £0 before 40 years (for a plan 5 plan) but it probably make more sense for someone in that position to overpay but only after they have enough to clear all the other credit they may have like a mortgage & have max out any pension contributions. Essentially the only people who need to be concerned about interest on a so called student loan are the some people who are wealthy enough to have financial advisors for tax planning.

Think of the interest on these so called student loans as a graduate tax buy out fee which also stops the balance declining with normal repayments so a student loan functions like a tax.

With this in mind I personally I would take the max maintenance loan I could get as she will pay 9% of her income over the £25,000 threshold for the 40 years (in practice as most won't actually clear these so called loans as things currently stand) from the April after they leave university regardless she might as well save a much as she can now while she is still at home and use it to something useful to her future like a deposit for a home & I would priorities work experience with relevance to her future qualification over having a job just to avoid getting a maintenance loan.

In theory the government can retrospectively change the terms of the so called student loan (as they are a graduate tax in all but name) but I think there would be enough people negatively affected to create a public outcry if the changes are any worse than freezing the income repayment threshold and the main unknown is what happens when the so called Plan 2 student loan reach their 30 year write off point (after about 2046) as its not quite clear where the money for this is going to come from for this. The youngest someone with a plan 5 loan if going to be is in their early 60 before it clears with the 40 year write off so I doubt a government would attempt to have pensioner still repaying student loans but that is crystal ball gazing at this point.