A Labour MP who is among the millions of graduates saddled with soaring student debt has joined a growing chorus of senior figures within the party who are piling pressure on Sir Keir Starmer to reform the “absolutely broken” system.
Labour MP Chris Hinchliff said he had no prospect of paying “anything more than the interest” on his loan before he became an MP and is now in £50,000 worth of debt, £10,000 more than he owed at the time he graduated in 2015.
He is one of a number of Sir Keir’s own MPs calling on him to reform Britain’s student loan system, as millions of young workers on a Plan 2 loan face spiralling debt from financial agreements they deem to be “unfair”.
While the prime minister has pledged to make the system fairer, Labour MPs, including Karl Turner, urged the government to act faster and “hatch a plan, quick-sharp, to sort this sorry mess out”, while former education secretary Charles Clarke told The Independent the system needs “urgent” reform.
Speaking about his own experience on a Plan 2 student loan, Mr Hinchliff told The Independent: “I would’ve left university with about £36,000 of debt. Last time I looked, after a year and a bit of paying it down with an MP job, I had £50,000 in debt.”
He said it had “gone up and up every year” while he was working in his previous job in the charity sector, adding that graduates are effectively “paying an additional rate of income tax” for life.
He said constituents across the board have raised concerns about the issue, including parents who now feel they’ve “misadvised their children” about going to university and said: “I absolutely understand because I’ve been through that pain myself, and I agree about the need to reform this.”
The North East Hertfordshire MP has called on the government to look at cutting interest rates on such loans as an “immediate area where people feel it’s most egregiously unfair”, and consider whether they are using the correct measure of inflation.
“I encourage the government to look at reform in this parliament to make this system fairer,” he said.
“The whole system that the Conservatives and Lib Dems brought in is a massive failure and needs to be addressed from top to bottom.”
The chancellor has been characterised as a “loan shark” by campaigners, after she announced a freeze on the repayment threshold for three years, leading to some people having to pay a lot more back than they originally borrowed on the high-interest loans.
On Wednesday, Sir Keir told the Commons he would look at ways to make the loans system fairer, but Ms Reeves suggested any changes were unlikely to come at the spring statement next week.
But Labour MPs have urged the government to move faster, with Kingston upon Hull East MP Karl Turner telling The Independent that Sir Keir and Ms Reeves must “hatch a plan, quick-sharp, to sort this sorry mess out”.
He said: “The electorate expect instant happiness. Gone are the days when we could reasonably argue that this mess was made by the previous Tory and LibDem coalition government in 2013. Our Labour government must act now to address the gross unfairness of the student loans system that we inherited.”
Former education secretary Charles Clarke told The Independent: “I do think the system needs urgent reform. The system set up in 2011 had serious flaws at the time and they have been made steadily worse since then.”
Meanwhile, Labour MP Kim Johnson said “the cat is well and truly out of the bag” when it comes to the student loan system, and urged ministers to U-turn in the days to come.
She told The Independent: “There is an urgent need to look at the value for money of student loans – and Ministers could choose to announce a U-turn next week. They should. Because this system isn’t just broken; it is actively fuelling the injustice and inequality at the heart of our stagnating economy.”
Another Labour MP on a Plan 2 student loan, Rosie Wrighting, has said she now faces £90,000 worth of student loan.
“We were told education was the route to opportunity. Instead, many of us graduated into a system where our loans grow faster than our wages ever could made worse when the inflation caused by Liz Truss mini-Budget pushed interest rates up at a level no graduate salary could realistically keep up with,” she wrote on social media.
Consumer champion Martin Lewis has also urged the chancellor to reverse her decision on student loans.
Appearing on ITV’s Good Morning Britain on Monday, he said the changes would be struck down by the regulator if a commercial company tried to make them.
Kemi Badenoch and Mr Lewis met to discuss student loans on Wednesday afternoon, after a fiery exchange about the issue on the TV programme on Monday.
The government has previously said that it inherited the student loans system from the previous Tory government, and said threshold freezes have been introduced to “protect taxpayers and students now, alongside future generations of learners and workers”.
Starmer will have no say on which Mandelson papers are released
The good, the bad and the tour bus: Inside the not so glamorous world of by-elections
Asylum seekers in hotels at lowest level in 18 months
Works to pedestrianize a key stretch of London's Oxford Street will start this summer
Esther Rantzen accuses peers of ‘sabotage’ as assisted dying bill looks set to fail
Peter Mandelson referred to EU’s anti-fraud agency after release of Epstein files
