
This is Money Podcast How do you solve a problem like student loans?
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Feb 6, 2026 A deep dive into Britain’s tangled student loan system, why Plan 2 borrowers face steep interest and shifting repayment rules. A debate over who should fund higher education and whether refunds or a graduate tax are possible. Plus the Bank of England rate outlook and how it affects savers and mortgage decisions. Also: extreme mortgage paydown tips, bitcoin’s recent crash, and how flexible ISAs work.
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Plan 2 Loans Create Long-Term Burden
- Plan 2 student loans (2012–2023) combine high fees with RPI+3% interest, hitting graduates in their late 20s and 30s.
- Many borrowers face rising balances and decades of 9% income repayments that may never clear before write-off.
Save Regularly For Children’s University Costs
- Consider saving small amounts monthly to give future students a pot for fees rather than fully funding upfront.
- Staying in the 'herd' of borrowers may be pragmatic if policy later improves with reforms or write-offs.
Policy Shift Made Students Pay More
- The system shifted much more of higher education costs from the state to students, raising loan sizes and interest charges.
- Using RPI+3% and charging interest from course start makes the loans effectively punitive and inconsistent.
