A small monthly repayment example does not show how much a student loan could cost as earnings rise. BBC analysis of information on more than 110 university websites in England found that 12 gave repayment examples only for salaries below the UK average cited in its report. Meg Hillier, chair of the House of Commons Treasury Committee, described some of the information as misleading and called for examples covering higher earners too.
The BBC analysis, published on 6 November, does not mean all the universities examined presented a similarly limited picture. Most websites did not include worked repayment examples at all, while more than a dozen showed repayments for salaries above the average. Most linked to information from public bodies.
The same rule, very different repayments
The importance of the salaries chosen for examples is clear under Plan 5, one of the student loan repayment schemes. Under the rules described by the BBC, borrowers repay 9% of annual income above £25,000. The repayment term is 40 years, unless the loan is paid off in full sooner. These are not the rules for every UK student loan: the repayment plan attached to a particular loan matters.
On an annual income of £30,000, the monthly Plan 5 repayment is £37.50. At £100,000, it is £562.50. Both figures follow the same percentage rule; the difference comes from the amount earned above the threshold. Showing only lower salaries therefore does not give a full picture of the possible deductions as pay rises.
In the 12 cases identified by the BBC, every example used earnings below £39,039, the UK average cited in its report. Hillier urged both universities and the Department for Education to include examples for higher earners. Her criticism concerned how information was presented; it was not a legal ruling on the provision of student loans.
Universities update pages as department promises review
After being contacted by the BBC, Northumbria University removed a comparison between repayments and the cost of a daily coffee. The university said its £35,000 salary example was close to average earnings for full-time workers in north-east England. It also said it would review its content further.
The BBC also found incorrect information about repayment terms, income thresholds or repayment plans on the websites of the University of Exeter, Royal Holloway, Edge Hill and Harper Adams. According to the broadcaster, all four updated their pages after it contacted them. The errors described therefore relate to the findings of the analysis, rather than necessarily reflecting what those websites say now.
Some other universities told the BBC they had updated their information or were reviewing it. Others stressed that their examples were illustrative or tailored to their students’ circumstances.
Government information also came under scrutiny. According to the BBC, the Department for Education’s website included examples for other repayment plans, covering salaries up to £38,400, but did not give worked examples for Plan 5. The department said it would review its information following the committee’s recommendations and work with universities to ensure their content was clear and up to date. That is a commitment to improve information, not a change to repayment rules.
For people comparing the costs of studying, the key distinction is between an example repayment and the rule used to calculate it. A low figure shown for one salary does not mean the same deduction will apply throughout the repayment term: as income rises, the monthly amount can increase substantially.
