Chancellor Rachel Reeves Responds to 'Loan Shark' Student Loan Change Criticism
The Labour Party government has issued a response to mounting pressure from the National Union of Students (NUS) to reverse controversial changes to student debt repayment terms. Chancellor Rachel Reeves faces accusations of implementing "loan shark" policies that critics claim unfairly burden graduates.
NUS Demands Reversal of Student Loan Changes
The NUS has formally urged Chancellor Reeves to scrap modifications announced in November's budget that will freeze the repayment threshold for Plan 2 student loans at £29,385 for three years starting April 2027. Protesters wearing Reeves face masks gathered outside Parliament this week, demanding systemic changes to what they describe as an increasingly oppressive debt structure.
Graduate Debt Stories Highlight Growing Concerns
Alex Stanley, NUS vice-president for higher education, shared her personal experience: "I borrowed £50,000 to study politics at Exeter University, graduating in 2023. Due to interest rates, I'm already facing £62,000 of debt. The problem is that students sign these contracts at 17 or 18, and the reassurances we received when Plan 2 began no longer exist."
Adele Cooke revealed she will repay approximately £80,000 before her remaining balance is written off. Chancellor Reeves responded that the loan system is "designed so you don't pay it back in full," emphasizing that threshold freezes extend beyond student loans to include income tax and national insurance thresholds.
NUS President Condemns 'Broken System'
NUS President Amira Campbell delivered a scathing assessment: "The current student loan system is freezing our future. How can graduates build professional lives while the chancellor acts like a loan shark, taking hundreds monthly from pay cheques as interest grows faster? We struggled with rent and bills as students, with parents filling the void. Now as graduates, we live pay cheque to pay cheque while repaying hundreds or thousands as loans continue growing."
Campbell concluded: "The chancellor should seek solutions rather than doubling down on a broken system."
Government Defends Tough Fiscal Choices
A Labour government spokesperson stated on behalf of Chancellor Reeves: "We recognize borrower concerns. The fiscal situation this government inherited necessitates tough choices. Threshold freezes represent hard but fair decisions required to protect taxpayers and students, both current and future generations."
The spokesperson added: "The student finance system receives substantial government subsidy, with lower-earning graduates always protected. Any outstanding loan and interest is cancelled at the repayment term's conclusion."
The debate continues as students and graduates await potential policy adjustments while managing escalating debt burdens under the current framework.
