A BBC investigation has found that 12 universities in England provided student loan repayment examples on their websites based on salaries below the UK average, drawing criticism from the chair of the Treasury Committee, who described the information as 'misleading'.
The review of more than 110 university websites also identified an example on Northumbria University's website describing repayments as less than the cost of a daily coffee.
Current and prospective students in England take out Plan 5 loans and repay 9 per cent of earnings over £25,000 for 40 years, or until the loan is paid off. The UK average salary is £39,039.
The University of Gloucestershire specified a £26,000 salary would mean repaying £7.47 per month. Northumbria University and the University of Huddersfield gave examples of £75 monthly repayments based on a £35,000 salary, which Northumbria said was 'broadly in line with the average for full-time workers in the North East of England'. Northumbria's comparison to a daily coffee has been removed since the university was contacted by the BBC.
Megan Russon, a recent graduate now working as a tax accountant, said universities gave examples of repayments at open days and told graduates they 'wouldn't even notice the repayments'. She owes around £62,000 and expects her monthly repayments to rise from £30 to about £187 as her salary grows.
The Department for Education's own website does not include real-world repayment examples for Plan 5 students. Someone earning £100,000 would repay £562.50 per month.
Dame Meg Hillier, who chairs the Treasury Committee, said she was 'pretty shocked' by the findings and plans to raise the matter with MPs. 'Universities have a responsibility to the young people that they're taking on board,' she said. The DfE has committed to reviewing the information it provides.
Lewis Wilson, from the National Union of Students, called the findings 'shocking' and said 'if this was any other financial product, it would have crossed the line into mis-selling'.
The BBC also found several instances of factual inaccuracies. The University of Exeter gave the wrong loan write-off period, while Royal Holloway and Edge Hill listed the wrong repayment thresholds. All four universities updated their websites after being contacted.
Birmingham City University declined to comment, while the University of Sheffield said its example was illustrative and Manchester Metropolitan University said its examples were explanatory and would be reviewed.
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Monthly student loan repayments at different salary levels
£ per month
Source: BBC News
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Analysis
Why This Matters
Misleading repayment examples can cause students to take on debt without understanding how higher salaries will increase long-term monthly repayments.
It erodes trust in university-provided financial guidance and raises questions about government oversight of student finance information.
The Treasury Committee's focus and the DfE's pledge to review could lead to mandatory transparent disclosure standards across the university sector.
Background
Student loans in England operate on an income-contingent repayment model under Plan 5, where graduates repay 9 per cent of their earnings above £25,000 over 40 years. A preceding Treasury Committee inquiry into earlier Plan 2 loans had already criticised the Department for Education for not making clear how higher earnings increase repayments. The current investigation follows those earlier concerns and examines how both universities and the DfE present repayment information to prospective students.
Key Perspectives
Dame Meg Hillier: said the information found by the BBC was 'misleading' and that both universities and the DfE must step up their efforts to give students accurate information.
Lewis Wilson (National Union of Students): described the findings as 'shocking' and said the practice would amount to 'mis-selling' in any other financial sector.
Department for Education: said it was committed to reviewing the information it provides following the Treasury Committee's recommendations and is working with universities to ensure clarity.
Northumbria University: said its example of a £35,000 salary was broadly in line with the regional average but recognised higher earners pay more and would further review its pages.
What to Watch
The outcome of the DfE's review of its own student loan information and whether it begins publishing examples at higher salary levels.
Whether individual MPs follow Dame Meg Hillier's push to write to universities in their constituencies, prompting more widespread website updates.
Potential further scrutiny or legal action if the NUS or others pursue the comparison to 'mis-selling', possibly reshaping how universities discuss loan repayments.