UK markets open in 2 hours 27 minutes
  • NIKKEI 225

    -342.37 (-0.86%)

    -108.24 (-0.62%)

    +0.14 (+0.18%)

    +10.30 (+0.43%)
  • DOW

    -57.35 (-0.14%)
  • Bitcoin GBP

    -1,042.16 (-1.99%)
  • CMC Crypto 200

    -24.50 (-1.77%)
  • NASDAQ Composite

    -10.22 (-0.06%)
  • UK FTSE All Share

    -15.97 (-0.36%)

Labour pledge to cut student loan repayments left out of manifesto

Shadow Education Secretary, Bridget Phillipson,
Shadow education secretary Bridget Phillipson had previously pledged to give young people 'more breathing space' in the careers - Leon Neal/Getty Images

A Labour pledge to lower student loan repayments has failed to appear in the party’s manifesto.

Shadow education secretary Bridget Phillipson had previously said she was considering proposals to “reduce the monthly repayments” and put money back into the pockets of “every single graduate” under a Labour government.

However the offer, which also included giving young people “more breathing space at the start of their working lives” did not feature in Labour’s manifesto, released on Thursday.

The National Union of Students (NUS) accused the party of failing to prioritise students.

Writing in The Times in June 2023 Ms Phillipson said the party had considered “plenty of proposals” about how to make student loans “fairer”.


Ms Phillipson’s article said the “government could reduce the monthly repayments for every single new graduate without adding a penny to government borrowing or general taxation”.

It added: “Reworking the present system gives scope for a month-on-month tax cut for graduates, putting money back in people’s pockets when they most need it. For young graduates this will give them breathing space at the start of their working lives and as they bring up families.”

The pledge signalled that a Labour government would reverse changes made by the Conservatives in 2022 to the structure of student loans, which now see graduates begin repaying at lower salaries and for a decade longer than previously.

A source close to Bridget Phillipson refuted that the party had scrapped the proposal and said there was “language” about student loans in the manifesto.

However, the official document released ahead of the July 4 election made no reference to support for graduates.

The manifesto read: “The current higher education funding settlement does not work for the taxpayer, universities, staff, or students. Labour will act to create a secure future for higher education and the opportunities it creates across the UK. We will work with universities to deliver for students and our economy.”

Chloe Field, of the NUS: said: “A graduate on the average salary effectively pays 40% income tax when their student loan is accounted for. If millions of student voters are not a priority for the Labour Party, they will only have themselves to blame if student voters go elsewhere on polling day.”

Tuition fees for universities have not increased since 2017 and are currently £9,250 a year. The average student in Britain graduates £45,000 in debt according to House of Commons figures.

Interest rates on student loans are currently between 6.25pc and 7.9pc depending on the graduate’s loan plan. Students who enter higher education this September will face some of the highest repayments on record as a new ‘plan five’ comes into effect.

Under the new requirements, graduates must repay 9pc of their income that is over a £25,000 threshold – and loans will not be written off until 40 years after they graduate, instead of the current 30.

Graduates on the older “plan four” loans do not start repaying until they earn more than £31,395 in a year. Postgraduates begin repaying after they earn £21,000 and pay 6pc of their salary over that figure.

Sir Keir ditched a long-standing commitment to scrap tuition fees, in May last year and instead promised to offer a “fairer solution”.

The Labour leader had previously made the pledge a centrepiece of this leadership campaign in 2020 and blamed worsening economic conditions for his decision to axe the policy.

Scrapping tuition fees formed a key part of Labour’s 2017 and 2019 manifestos. Sir Keir promised to take it forward when he ran to replace Jeremy Corbyn four years ago.

He said during his 2020 leadership bid that Labour “must stand by its commitment to end the national scandal of spiralling student debt and abolish tuition fees. We lost the election, but we did not lose our values or determination to tackle the injustice facing young people going to university.”

The Labour Party was approached for comment.