Your Officers are keeping you in the loop! Ananya (VP Education) has responded to the Treasury Select Committee's Student Loan inquiry, regarding the government’s decisions to introduce a tuition fee levy on international students, freeze the thresholds for student loan repayment, and increasing fees for home students in the coming years. Read the full response here.
In April 2026, a Treasury Select Committee held an inquiry into student loans following Chancellor, Rachel Reeves, decision to freeze the repayment threshold for three years from April 2027 as part of her 2025 Budget.
The Treasury Committee’s webpage states that according to ‘the Institute for Fiscal Studies, students now leave university with more than £50,000 in student loan debt’.
At Warwick SU, our students have a long history of fighting for free and accessible education for all.
Most notably, in 2014, Warwick students staged a sit-in at Senate House as an act of protest for free education. These students were met with excessive Police violence with tasers pulled on them and CS Spray used on some of the students. Three students were even arrested.
Additionally, Warwick SU’s Policy on the matter titled ‘Warwick SU Against Tuition Fees’, which was proposed in the Academic year 2011/12, and has been renewed every academic year since, highlighting that campaigning for free education is deeply intertwined with the history and legacy of your SU.
Keeping with that trend, this April, as your VP Education, I submitted a report to the Treasury Select committee’s call for evidence. You can find my report below:
Warwick Student’s Union’s Response to the Treasury Committee’s Call for Evidence
Warwick Student’s Union (WSU) is the representative body for almost 30,000 students at the University of Warwick. This is WSU’s position on the Student Loan system, decided democratically through our policy process and the mandate of our elected sabbatical officers.
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Should a student loan incur interest?
No. At least not in the way it currently does. WSU believes that interest creates a psychological burden for students, especially as balances grow even when repayments are being made. This disproportionately affects students from lower-income backgrounds, who are already more debt-averse than their peers from wealthier backgrounds. Moreover, the system structurally “rewards” governments for extracting more from graduates while masking underinvestment in higher education.
WSU’s position:
Student finance should not function like a profit-generating debt product. At most, interest should be minimal (inflation-only) or removed entirely and replaced with a system of maintenance grants and tuition fees completely funded by the state.
1b) Should the interest on a student loan be dependent on income?
No. WSU believes the current model is flawed and regressive in practice. While income-linked interest is intended to be progressive, it fails in these scenarios:
WSU’s position:
Interest should not vary by income. Instead:
1c) Should the interest on a student loan be fixed to RPI, CPI, or another measure?
WSU believes that if interest on student loan exists, it should be capped at CPI. RPI is outdated and higher, inflating debt unfairly while CPI is a more standard, realistic measure.
WSU’s position:
Interest should be at most CPI and preferably below it or zero. Anything higher unjustifiably increases graduate debt.
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Are interest rates above the rate of inflation on a student loan fair?
No, this is fundamentally unfair. WSU notes that charging above-inflation interest turns student finance into a punitive system, where graduates pay far more than they borrowed. The NUS even describes this as a “financial penalty on ambition” which aptly describes the potential experience of students under this new student loan regime.
WSU’s position:
Interest above inflation is unjustifiable in a public education system and should be abolished.
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Was it fair for the Government to block the interest rate on student loans from going negative when the measure of index the loan was pegged to went negative?
No, it was inconsistent and unfair to students. If loans are tied to economic indices, they must work both ways, by preventing negative rates while allowing positive ones the state undermines the legitimacy of its policy.
WSU’s position:
The decision to block the interest rate on student loans from going negative demonstrates how the system is designed to benefit the government, not student borrowers.
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Should student loans be branded as loans, or as something else? Does calling a student loan a loan exacerbate the dissatisfaction with the product among its users?
No, this framing is misleading and harmful. It is abundantly clear that the dissatisfaction comes not just from the name but from:
The harsh reality is that the system is more like a graduate tax than a traditional loan.
WSU’s position:
Rebranding alone is insufficient in addressing what is truly unfair about this system which is: education is a public good that should be funded by the state. However, WSU does recognise that calling it a “loan” does worsen anxiety and misunderstanding, and can drive young adults away from higher education, especially those from low socioeconomic backgrounds who have increased anxieties surrounding being in debt. It could be reframed as a public contribution system, as long as it is explicitly clear about the financial agreement students are making with the state.
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What proportion of a student’s university education should be funded by the student versus being subsidised by the state?
As per longstanding SU policy (created and voted in by students at the University of Warwick), WSU believes tuition fees should be completely subsidised by the state.
However, in this case, as education is a public good, WSU believes it should be funded through progressive taxation.
WSU’s position:
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Should the terms of a student loan be able to be changed by government once the loan has been taken out?
Not in a way that disadvantages borrowers. WSU believes that the current system allowing retrospective harmful changes is deeply unfair.
WSU’s position:
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Does the process around student loans provide enough information, in a clear and fair form, given that this may be the first credit contract for many people?
No. For many students these loans act as their first financial contract, yet the financial literacy surrounding this topic is low. Students have been misled by the government about repayment simplicity (see: BBC article published last month that suggests the government compared student loans to a phone contract: 'Misleading' school talks compared student loans to £30 phone contracts - BBC News).
WSU’s position:
The system lacks transparency and fails basic standards of informed consent.
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Should loans from the Student Loan Company be compliant with FCA rules and principles and the Consumer Duty?
Yes, absolutely.
WSU’s position:
If it behaves like a financial product, it should be regulated like one. The current exemptions allow unfair practices to go unchecked.
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Does changing the terms of a government loan contract once it has been entered into erode trust in Government?
Yes.
WSU’s position:
Any retrospective changes undermine confidence and create long-term distrust, especially among younger generations, and the government’s inconsistency has eroded students’ trust in the state’s ability to support them.
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Might changing the terms of a loan once it has been taken out affect future take up of student finance through lack of certainty in the loan product?
Potentially, but more importantly, it creates resentment and coercion. Home students have little choice in terms of alternative financial avenues to fund their university education. Especially, students from low socio-economic backgrounds, who have no other choice but to take on the government’s student loans as university education is unaffordable.
WSU's position:
While negatively changing terms of a loan once it has been taken out negatively affects the students who have taken out the loan it is difficult to gauge how this may affect future take up considering there is no other viable alternative. However, it would be remiss to ignore that positive changes to student loans once they have been taken out could positively impact take up rates of student finance.
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Are there examples of government unilaterally changing the terms and conditions of finance provided to companies or pensioners or other groups in the economy?
Very few. There are no clear parallels where governments change financial terms so significantly after agreement.
WSU’s position:
The fact that there is no parallel highlights how uniquely unfair the English student loan system is.
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Should the incomes of higher-earning graduates be used to subsidise the loans of lower-earning graduates?
Yes, absolutely. WSU believes this is essential. This should happen through progressive taxation rather than a loan system, to protect the principle of free education for all.
WSU’s position:
A progressive taxation system where higher earners contribute more is fair and should be strengthened. The current system of punitive interest helps no one, and the richest graduates can avoid it by paying student loans up front.
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How does the student loan system interact with the taxation system, including marginal rates?
WSU notes that the system effectively acts as a hidden tax, pushing marginal tax rates above 40% for middle earning graduates on a Plan 2 loan, which is meant to be for the highest earners.
WSU position:
Student finance should be integrated transparently into taxation, not layered on top. Treating it as an ‘add on’ is inequitable and particularly impacts graduates in their 30’s and 40’s, when they are most likely to hit higher earning potential but are constrained by higher “taxes” due to student loans. This impacts upon their ability to buy a house, and experience other forms of financial stability that previous generations have enjoyed.
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Do student loans currently deliver equitable shares of burdens and benefits between generations?
No. The current system is not equitable as younger generations bear heavier financial burdens while receiving less state support.
WSU’s position:
While WSU believes in lifelong education for everyone at any stage of life, the current system shifts costs onto younger, often poorer graduates while protecting older generations as this is structurally unfair. It is also reflective of the fact that the state subsidises older people over younger people, which is a political choice informed by their voter bases.