The row focuses on the “plan 2” scheme, covering roughly 6 million people who entered university in England and Wales between 2012 and July 2023. For a plan 2 graduate, every pound earned between £30,000 and £50,000 already faces 20% income tax, 8% national insurance and 9% loan repayment – a 37% marginal rate. Freezing the plan 2 threshold, as Ms Reeves proposes from 2027, penalises these graduates by holding down the point at which repayments begin (roughly £30,000), so that as wages rise, a growing share of their income faces the 9% charge. This ensures more income is taxed at 37% for longer as incomes go up. The Institute for Fiscal Studies says this is indistinguishable from a tax rise.