Andy Burnham is being urged by his allies to increase the salary threshold for student loan repayments.
New polling that shows a fall in support for Labour from graduates who are saddled with spiralling student debt has rung alarm bells among Burnham loyalists.
They are urging him to back a proposal to raise the threshold for repayments from £29,385 to £33,542.
The soaring cost of student debt has become a touchstone political issue for millions on the controversial Plan 2 repayment plan, which can leave graduates in England and Wales paying tens of thousands of pounds more than they originally borrowed.
Graduates, now in their twenties and thirties, who took out loans from 2012, repay nine per cent of their salary above £29,385 and have also faced interest rates above seven per cent on their balance, though these are due to be capped at six per cent from September following a backlash.
Polling from the Good Growth Foundation, a Labour-adjacent think tank, reveals that the party’s support among the 5.5 million people with Plan 2 student loans has nearly halved since the 2024 election – from 54 per cent to just 30 per cent.
In contrast, support for Zack Polanski’s Green Party has surged among those who started university between 2012 and 2023, rising from 11 per cent at the last election to 28 per cent – almost level with Labour.
Andy Burnham, the new Labour MP for Makerfield, celebrates after his swearing-in at the Houses of Parliament earlier this week (Photo by Dan Kitwood/Getty Images)The salary threshold for repayment was meant to rise each year in line with earnings, but the Chancellor, Rachel Reeves, used last year’s Budget to freeze it at £29,385 for three years from 2027, holding it down until 2030.
To help address the graduate debt crisis, the Good Growth Foundation, which campaigns for a fairer economy, proposes an immediate uplift of the repayment threshold from £29,385 to £33,542 and an annual increase linked to median graduate earnings growth enshrined in law. It argues this would restore the real value of the £25,000 threshold set in 2018 and reverse recent threshold freezes.
The changes would save a graduate on an average salary around £374 a year, according to The i Paper‘s estimates.
The former Mayor of Greater Manchester is the runaway frontrunner to succeed Sir Keir Starmer, who announced his resignation on 22 June, with Labour’s leadership nominations due to open next month.
Luke Charters, the Labour MP for York Outer who has publicly endorsed Burnham, is among those urging him to back the proposal. However, Burnham has long favoured replacing student debt with the introduction of a graduate tax.
Charters told The i Paper: “Politics has failed young people for too long, and nowhere is that failure clearer than in a student loan system that traps them in debt and calls it opportunity. We must fix student finance not only because it is unsustainable, but to prove that politics can still deliver for a generation that feels deeply let down.”
Alex Sobel, co-chair of the cross-party group of MPs and peers on students, said the proposal was a “promising alternative to the status quo.” “If there is a triple lock for retired people and usurious levels of interest for the young we won’t be forgiven,” he said. “Backing this kind of concrete, lasting reform is how we show them this government can deliver for them.”
Josh Dean, Labour MP for Hertford and Stortford, said rising repayments were eating into young people’s pay “just as they are trying to build a life, start a family, or put down roots.” He called the proposal “a sensible, long-overdue reform”.
Joe Morris, the Labour MP for Hexham who was among those to quit the government in the run-up to Starmer’s resignation, said that if children “from the Tyne Valley, Ponteland, Throckley or Longhorsley choose university, the system should be behind them”.
The findings of the Good Growth Foundation’s survey point to student loan reform as one of the few credible routes left for Labour to reconnect with a group of voters that was central to its 2024 election win. When asked to choose between raising the repayment threshold or cutting interest rates, Plan 2 graduates show a clear preference for threshold reform. Some 44 per cent favour an increase in the threshold, compared with 36 per cent who prioritise a cut in interest rates.
Among Plan 2 graduates who voted Labour in 2024, 47 per cent back a threshold rise versus 36 per cent who would prefer a rate cut.
Raising the repayment threshold has a much greater impact for low to middle earners because it would immediately reduce their monthly payments.
A cut to the interest would be of most benefit to higher earners who are more likely to clear their loans.
The high interest accrued on the student loans does not affect the monthly payments, but it does mean some graduates see their balance grow despite making regular contributions. Most graduates are projected not to clear their loans before they are wiped after 30 years as a result of the high interest.
Louisa Dollimore, strategy director at The Good Growth Foundation, said the plan was the “fairest way” to fix the problem.
She said: “Raising the threshold would keep those on modest incomes out of repayment altogether and ease the monthly squeeze for those just above the line. Locking annual rises into law would not only stop this problem occurring again a few years down the line, but also be a lifeline to a Government under pressure from losing younger voters. Fixing Plan 2 is one of the few reforms that can both repair a visible symbol of political failure and deliver a concrete improvement for graduates who feel they are drowning in debt.”
Hence then, the article about the new plan to raise student loan repayment threshold to 33 500 was published today ( ) and is available on inews ( Middle East ) The editorial team at PressBee has edited and verified it, and it may have been modified, fully republished, or quoted. You can read and follow the updates of this news or article from its original source.
Read More Details
Finally We wish PressBee provided you with enough information of ( The new plan to raise student loan repayment threshold to £33,500 )
Also on site :
- MAGA Influencer Scott Presler Denied Entry To GOP Event, Blames Thune
- Amazon’s 'Elegant' 3-Piece Rattan Patio Set Is a Coastal Summer Upgrade That's Now Just $75 for Prime Day
- TSA Sends Warning to World Cup Fans Visiting Texas