The Treasury select committee has concluded that the government's promotion of plan 2 student loans in England and Wales amounted to mis-selling, and that ministers have a moral obligation to reverse last year's freeze on the repayment threshold. The finding matters because it puts significant political pressure on the chancellor, Rachel Reeves, over a decision affecting a generation of graduates, and it is unusual for the committee to demand that a specific budget measure be scrapped.

The committee pointed to three instances of mis-selling: YouTube videos and slides that failed to disclose the government could retrospectively change loan terms, promotional material comparing monthly repayments to a mobile phone contract (inaccurate for higher earners), and the Student Loans Company not making the possibility of retrospective changes clear during applications. Reeves had frozen the repayment threshold at £29,385 for three years from April 2027, meaning graduates earning above that repay 9% of additional earnings with no protection against inflation. A committee survey drew more than 52,000 responses, over half of whom said they had not understood the terms before borrowing; one called repayments "a tax on ambition". The government has capped loan interest at 6% but resisted unfreezing the threshold, and says it will respond in due course.