The Commons Treasury Select Committee has said the Labour government has a "moral obligation" to reverse its student loans policy, which the cross-party group of MPs described as "unfair" and amounting to "mis-selling". The row centres on Chancellor Rachel Reeves's autumn Budget decision to freeze the earnings threshold for repaying Plan 2 student loans for three years from 2027 at £29,385, rather than raising it in line with average earnings as borrowers were originally promised. The dispute matters because it affects how much graduates repay, dragging more low earners into repayments while also increasing the amount higher earners pay.

The committee's report accused Ms Reeves of altering the original terms of the loans, noting that students taking them out from 2010 were told the threshold would be uprated annually in line with average earnings or inflation from 2016. Committee chair Dame Meg Hillier said it was unusual for a cross-party committee to agree that a specific Budget measure must be reversed, adding that the issue "can no longer be ignored" and "patience has run out". The intervention follows pressure from graduate campaigners on Prime Minister Sir Keir Starmer, who has so far declined to announce a U-turn.