Martin Lewis says government’s student loan statement overhaul will remain “blunt, misleading and dangerous” without more substantial changes

A new online student loan repayment service to go live in 2020 has been announced today by the Education Secretary. The Department for Education has said that it will largely replace annual paper statements in an attempt to modernise the repayment system.

Martin Lewis, founder of, criticises the government for failing to take note of the Augur report’s recommendation to totally revamp “dangerous” student loan statements.

“The student loan statement system is broken. The government’s tinkering to give more live data is an improvement, but that alone won’t come close to fixing the problem. Unless there’s substantial further changes these statements will remain blunt, misleading and financially dangerous.

“These statements prompt often-unnecessary fear and distress from many of the millions who receive it. Worse, that fear reverberates across society, and risks wrongly deterring many from a future of higher education.

“The problem is the outstanding ‘debt’ figure – the one that is being updated – is the main focus, and for most graduates is a nearly meaningless figure that bears only a loose resemblance to what they need to repay. A predicted 83% of current students in England won’t clear their nominal ‘debt’ within the 30 years before it wipes. For them the outstanding amount is therefore a poor indicator – as in fact it doesn’t act like a debt, but more like a 30-year 9% extra tax on earnings over £25,725.

“The fact statements currently and will continue to frame it as a fast-growing debt, means some are even spooked into overpaying £1,000s even though they won’t gain a penny from doing so.

“In the last year, together with the Russell group we proposed a redesigned student loan statement, that tries to paint a more accurate picture of lifetime repayments based on earnings. It met a 90% success rate on our testing, and the Augur report recommended a shift towards this. So it’d be very disappointing if the government doesn’t take this opportunity to fix the problem – and help millions of students and graduates.”