‘Misleading’ student loans information left out examples of higher-salary repayments

A recent investigation by the BBC has revealed that several universities in England provide examples of student loan repayments based on salaries that fall below the national average on their websites. This issue has drawn criticism from Dame Meg Hillier, chair of the Treasury Committee, who led an inquiry into student loans. She described some of the repayment information as “misleading,” highlighting instances where repayments were compared to trivial expenses like the cost of a daily coffee. Dame Meg also stressed the importance of the Department for Education (DfE) including examples that reflect higher income levels on its website.

Student loans under Plan 5, which current and future students in England take out to cover tuition and living expenses, require graduates to repay 9% of their income over £25,000 for up to 40 years or until the loan is cleared. The BBC examined more than 110 university websites across England and found numerous inaccuracies regarding the salary thresholds triggering repayments and the duration of those repayments. Of particular concern was that 12 universities only provided repayment examples based on earnings below the UK’s average salary of £39,039, potentially understating the financial impact for many graduates.

Specific cases from several universities illustrate the problem. For example, the University of Gloucestershire’s website cited repayments of £7.47 per month based on a £26,000 salary, while Northumbria University and the University of Huddersfield offered examples of repayments around £75 per month calculated on a £35,000 salary. Northumbria University had compared these repayments to the price of “less than the cost of a daily coffee,” but removed this analogy after BBC enquiries. The DfE website also lacks examples of repayments for Plan 5 borrowers beyond incomes of £38,400, despite the repayment formula requiring 9% of all earnings above £25,000, which results in much higher monthly payments for higher earners.

Megan Russon, a 21-year-old tax accountant from Cannock, shared her perspective, noting that universities often presented repayment amounts as minimal during open days, based on salary estimates between £25,000 and £45,000. Megan, who started with about a £29,000 salary post-graduation, expects her income to rise to around £50,000 in three years when she becomes chartered, which will increase her repayments to approximately £187 per month. She expressed surprise at the gap between early examples and her eventual repayment reality, saying, “When I was at university, I started realising the salaries that I was going to be on after I graduated, then I started realising actually this is going to be impacting me quite a lot.”

The BBC’s analysis also identified errors on some university websites, such as incorrect information about loan write-off times and repayment thresholds. Universities including Exeter, Royal Holloway, Edge Hill, and Harper Adams have updated their information following contact. Dame Meg emphasized the need for universities to improve transparency, urging MPs to hold institutions accountable. The DfE has committed to reviewing and enhancing the clarity of repayment information in response to the Treasury Committee’s recommendations, with several universities confirming they are updating or reviewing their websites to provide clearer, more accurate information to students