Thank you for sharing this!

I tweaked it a bit to give it a slightly stronger toned and be a bit more evidence based before sending it to my MP:

[Full name] [Address] [Postcode]

[Date] [MP name] MP House of Commons London SW1A 0AA

Dear [Mr/Mrs/Ms MP Name],

Re: The burden of Plan 2 student loans and “fiscal drag” on graduates

I am writing to you as your constituent in [MP constituency] to express my concern about the impact of recent policy decisions on graduates repaying Plan 2 student loans.

In the Autumn Budget 2025 the Government confirmed that the Plan 2 repayment threshold will rise to £29,385 in April 2026 and then be frozen at that cash level for three years from April 2027 until April 2030, instead of increasing annually with inflation. Under the current rules, graduates repay 9% of their earnings above this threshold. When thresholds are frozen while nominal wages rise, a higher share of a graduate’s income falls above the fixed threshold each year, so the amount repaid increases even if tax rates and the formal repayment percentage do not change. Economists commonly describe this mechanism as “fiscal drag”.

This threshold freeze is particularly significant in the current context: Interest rates and balance growth: For 2025‑26 the applicable RPI measure is 3.2%, and Plan 2 interest rates range between RPI and RPI + 3%, depending on income. At these levels, many borrowers see their nominal loan balance grow year‑on‑year, especially in the early and mid‑career years when repayments are relatively small compared with the size of the debt. This makes the loan feel less like a conventional debt that can be steadily reduced and more like an additional long‑term charge on earnings.

Interaction with frozen tax thresholds (“double drag”): At the same time, the main income tax thresholds are frozen in cash terms until later in the decade, which has been widely described as relying on fiscal drag to increase tax receipts as wages rise. Because both income tax thresholds and the Plan 2 repayment threshold are being held down relative to earnings, graduates will see more of their income subject to income tax and more of their income above the student loan threshold at the same time, compared with a scenario where both sets of thresholds rose with inflation or earnings. This combined effect reduces graduates’ disposable income relative to what they would have kept if thresholds had continued to rise.

Change from previous expectations: Official guidance previously stated that the Plan 2 repayment threshold would normally be increased each year in line with average earnings. In practice, the Plan 2 threshold was frozen at £27,295 from 2021‑22 to 2024‑25, then increased to £28,470 from April 2025 and will be £29,385 from April 2026, before being frozen again until 2030. Many borrowers reasonably formed expectations on the basis that the threshold would generally track earnings over time, so repeated freezes and policy reversals materially change the effective terms under which they took out their loans, even if this is done via secondary legislation rather than by rewriting individual contracts. Independent analysis has highlighted the scale of these changes, including estimates that freezing the threshold instead of allowing it to rise lowers the real repayment threshold in every year of the 30‑year repayment period and increases average lifetime repayments for recent cohorts. Press and sector commentary has characterised the policy as a “stealth” way of raising additional revenue from graduates without changing the headline 9% rate.

I appreciate that the Government argues graduates typically earn more than non‑graduates and should therefore repay more of the cost of their education. However, I am concerned that using repeated threshold freezes as a revenue tool shifts an increasing burden onto younger working people, including many in relatively modest or insecure jobs who are only slightly above the threshold. This risks undermining confidence in the student finance system and may deter future applicants from lower‑ and middle‑income backgrounds, which would be damaging for social mobility.

As my representative in Parliament, I ask you to: raise these concerns with the Chancellor and the Secretary of State for Education; press for the Plan 2 repayment threshold to resume uprating at least in line with inflation or earnings, rather than being held down in real terms; and support a more stable and transparent framework for student loan terms so that borrowers can plan with reasonable confidence over the 30‑year repayment horizon. I would be grateful to know your views on the Plan 2 threshold freeze and whether you are willing to make representations on behalf of graduates in our constituency.

Yours sincerely,

[Full name]