'Misleading' student loans information left out examples of higher-salary repayments

Several universities in England have only been using below-average salaries in examples of student loan repayments on their websites, the BBC has found.

Treasury Committee chair Dame Meg Hillier, who led a recent inquiry into student loans, said some information about repayments was "misleading", including one instance where they were compared to the "cost of a daily coffee".

She also said the Department for Education (DfE) must include higher-salary examples on its own website, too.

The DfE said it would review the information it provides, while universities said their websites referred to government information and would be reviewed where necessary.

Student loan repayments are tied to earnings, so the more you earn, the more you repay every month - and graduates generally go on to earn more than non-graduates.

Current and prospective students in England take out Plan 5 loans to pay for their tuition fees and living costs. They repay 9% of anything they earn over £25,000 for 40 years, or until the loan is paid off.

The BBC looked at publicly available information on more than 110 university websites in England and found cases of inaccurate information about the salary at which they start repaying and the length of time they repay for.

It also found that 12 universities only gave students worked examples of repayments based on earnings that are less than the UK average, which is £39,039.

The University of Gloucestershire website, for example, specified a £26,000 salary would mean repaying £7.47 per month, while Northumbria University and the University of Huddersfield gave examples of £75 monthly repayments based on a £35,000 salary.

Northumbria University's website said those graduates would be "repaying an amount less than the cost of a daily coffee" - a comparison that has been removed since the university was contacted by the BBC.

The DfE website also only gives examples of monthly repayments for people earning up to £38,400 on other student loan plans, but does not include any real-world repayment examples for Plan 5 students.

Repayments are 9% of earnings over £25,000, so someone earning £30,000 will repay £37.50 per month, but someone earning £100,000 will repay £562.50 per month.

Megan Russon, 21, is a recently graduated tax accountant from Cannock with a starting salary of around £29,000, meaning she will repay about £30 a month.

However, she expects to earn around £50,000 when she becomes chartered in three years' time, and will be repaying about £187 per month.

Megan says universities gave examples of repayments based on earnings of between £25,000 and £45,000 at open days and said graduates "wouldn't even notice the repayments because they should be minimal".

"At the time, I wasn't sure what salary I was even going to be on when I graduated," she said.

"When I was at university, I started realising the salaries that I was going to be on after I graduated, then I started realising actually this is going to be impacting me quite a lot."

The BBC's analysis found most university websites did not give worked examples, and most also referred to DfE, Student Loans Company or Student Finance England information whether they did or not.

More than a dozen provided examples of repayments based on higher-than-average earnings, but 12 gave examples that were lower:

University of Gloucestershire (repaying £7.50 per month)

University of Birmingham (repaying £22 per month)

London South Bank University (repaying £22.50 per month)

Manchester Metropolitan University (repaying £33 per month)

Birmingham City University, Open University, the University of Sheffield, and the University of Wolverhampton (repaying £37.50 per month)

University of Portsmouth (repaying £45 per month)

Birkbeck University (repaying £54 per month)

Northumbria University and University of Huddersfield (repaying £75 per month)

There were also instances of inaccurate information. The University of Exeter said Plan 5 loans were written off a decade earlier than they actually are, Royal Holloway and Edge Hill listed the wrong repayment thresholds, and Harper Adams said students from England were still on Plan 2 loans. All four universities have updated their websites since being contacted by the BBC.

"I'm pretty shocked at what the BBC has uncovered here and I'm going to be raising it with the relevant MPs and urging them to write to the universities in their constituencies to make them step up and do a better job," Dame Meg said.

She said the DfE should be "taking the lead" by reflecting repayments for higher earners, but that universities also "have a responsibility to the young people that they're taking on board for the three or four years of their degree".

Dame Meg chaired an inquiry into student loans this year and said the DfE had been "mis-selling" Plan 2 loans, which were given between 2012 and 2023 in England and are still issued in Wales.

Her report said the DfE had not made clear how higher earnings would affect monthly repayments and criticised comparisons to £30-a-month phone contracts.

The DfE then pledged to "improve the current information that is provided to prospective borrowers" including "the impact of salary progression" on monthly repayments.

The DfE said its guidance sets out "how repayments are calculated across the different repayment plans", adding that it was "vital" that university applicants have "clear and accurate information".

"We have committed to reviewing the information we provide following the Treasury Committee's recommendations, and we will. We are also working with universities to ensure the information they provide to students is clear and up to date," it added.

The University of Gloucestershire, the University of Birmingham and Harper Adams University said they had updated their websites and Birkbeck, University of London said it was reviewing the information.

The University of Sheffield said its example was illustrative, while Manchester Metropolitan University and the University of Wolverhampton said examples were explanatory and would be reviewed. London South Bank University said it regularly reviews content on its website to ensure it is helpful and accurate.

The Open University said it gave examples of "income levels that are most likely to reflect our students' circumstances", although many students "go on to earn significantly more", while the University of Portsmouth said its example was taken from Student Finance England and would be updated to "reflect the most recent average salary".

Northumbria University said its example of £35,000 was "broadly in line with the average for full-time workers in the North East of England" but added: "We recognise that higher earners will make higher monthly repayments and will further review all pages to make sure the wording is as clear and precise as possible."

Birmingham City University declined to comment. The BBC has requested a comment from the University of Huddersfield.