Burnham-On-Sea MP Ashley Fox has launched a new survey inviting local residents to share their views on Conservative proposals to reduce interest rates on Plan 2 student loans.
The proposal, announced by Conservative Party Leader Kemi Badenoch, would remove the additional 3% interest currently charged above inflation on Plan 2 loans — those taken out by most students who began university between 2012 and 2023. Under the plan, interest would be capped at the Retail Prices Index, preventing loan balances from rising faster than repayments.
Under the current system, graduates repay 9% of their income above the repayment threshold, yet many see their overall balance increase due to the extra interest added on top of inflation. National estimates suggest that a graduate with £40,000 of debt earning £50,000 could save around £26,000 over their lifetime if the proposed changes were introduced.
The policy would be funded by reducing 100,000 university places on courses that do not lead to strong career outcomes. The money saved would be redirected into creating 100,000 additional apprenticeships each year for 18–21-year-olds, supporting young people into skilled and technical careers such as plumbing, electrical work and other trades.
Ashley Fox said he regularly hears concerns from young people and families about the current loan system.
“Many are doing the right thing, working hard and making repayments, yet watching their debt rise because of the extra interest charged on top of inflation,” he said.
“This proposal would ensure graduates are not penalised for seeking to improve their prospects, while also expanding high-quality apprenticeship opportunities for those who choose a different route. I want to hear directly from residents, whether you are affected yourself or supporting a family member who is.”
Residents can take part in the survey by visiting www.ashleyfox.org.uk
