MPs say phone contract comparison is ‘misselling’ student loans.

A group of MPs has claimed that student loan repayments are being “under-sold” by the government, comparing them to phone contracts or cinema tickets.

A new report by the Treasury Committee says students were not made clear enough that loan terms could be changed retroactively, and called for the decision to be revised to limit the income threshold at which some graduates can start repaying their loans.

Last year Chancellor Rachel Reeves said the repayment limit for students with Plan 2 loans would be capped at £29,385 between 2027 and 2030.

Both the government and the student loan company said the committee had made a “significant contribution” to the student finance debate.

“We understand the importance of ensuring that students and borrowers in all repayment plans have access to clear, accurate and up-to-date information about their student finances,” said a spokesperson for the student loan company.

A government spokesman said ministers were “taking decisive action” and would “continue to look for ways to make the system fairer for students, graduates and taxpayers in a financially sustainable way.”

Scheme 2 loans were taken out by students in England between September 2012 and July 2023 and are still offered in Wales. Graduates will automatically pay 9% of their earnings above the payment limit

Freezing that cap means graduates will start paying off their loans sooner or pay more as their wages rise with inflation and the cap remains the same.

The report of the committee is cited. BBC investigation In a promotional pitch to teenagers a decade ago, the government compared student loan repayments to a £30-a-month phone contract.

The report said that this was “incorrect for high-income earners” and “was like no selling”.

The committee noted that while government student loan policies are exempt from consumer protection laws, it expects the government to “uphold not just the law, but basic fairness and common decency.”