The Treasury Committee launched an inquiry to examine the student loan regime, the terms and conditions under which student loans are sold, the level of interest levied, and the impact of repayments on graduates. The inquiry also considered student loans in the context of the taxation system faced by graduates.
The Committee invited written evidence on interest rates, terms of loans and the Government's ability to change them, fiscal policy, and fairness.
The call for evidence closed on 14 April 2026.
Our response
IHE welcomes this inquiry and the Committee's focus on fairness. In our response, we urge the Committee to recognise that the question of fairness must include whether students have meaningful choices about the type, duration and intensity of their learning, and therefore over the size of the debt they take on. The fairness of repayment terms cannot be assessed in isolation from students' choices about what and how they study, and how much they need to borrow as a result.
We highlight that the dominance of the traditional three‑year degree limits value for money and squeezes out flexible, affordable alternatives such as modular, blended, online and accelerated learning. These models already work well across IHE's membership, but outdated funding and regulatory rules prevent them from scaling. Removing these barriers would allow students to borrow less while gaining more relevant skills.
We also argue that meaningful reform must begin with a clear decision about the purpose of the student finance system. The current model sits uneasily between a progressive graduate contribution scheme and a conventional loan, creating confusion, unfairness and a lack of transparency. Government must choose one approach and design it honestly. If the system is to operate as a genuine loan, terms must be fixed at the point of agreement. Retrospective changes to repayment thresholds, interest rates or repayment periods undermine trust and would not be acceptable in any other regulated financial product. Any reforms should apply only to future cohorts.
We recommend that Government creates practical mechanisms for employers to co-invest in education, including through the Lifelong Learning Entitlement (LLE) platform, corporation tax super-deductions, and salary sacrifice schemes.
Read our full response using the download link below.