Kemi Badenoch, the UK's Secretary of State for Business and Trade, has declared that the Conservative Party would abolish the high-interest student loan system, which she labeled as an 'unfair debt trap'. This statement comes amidst growing public discontent regarding student debt, particularly with the rising costs affecting graduates in the UK. Badenoch's remarks are aimed at directing pressure towards the Labour government to tackle the increasing concerns surrounding student loan costs.

Education Secretary Bridget Phillipson acknowledged that the current Plan 2 student loan system has significant issues but emphasized that the Labour government is focused on providing maintenance grants for lower-income students rather than addressing the high-interest rates at this moment. She pointed out that the Conservatives previously enacted these policies but now criticize them, highlighting the complexities and challenges inherent in implementing changes to the educational funding system.

The Conservative Party's proposed changes would eliminate real interest rates on Plan 2 loans, which currently force graduates to repay much more than what they originally borrowed for their university education. Laura Trott, the shadow education secretary, stated that interest on loans should not outpace the Retail Price Index (RPI) inflation, thus moderating how much debt accumulates over time. This proposed shift could have significant implications for graduates, potentially alleviating financial burdens for future generations.