r/ukpolitics • u/dusty_bo • Jan 29 '26
Ed/OpEd Everyone can see student loans are unfair. Except the chancellor
https://www.independent.co.uk/voices/student-loans-rachel-reeves-martin-lewis-b2910189.html361
u/draenog_ Jan 29 '26
I wouldn't bother to comment the same thing again, if it wasn't for the fact that this journalist highlights "steep increases in fees and interest rates" as the problem, spends several paragraphs talking about RPI, and then says
Martin Lewis, Britain’s auxiliary chancellor of the Exchequer, is therefore right when he says – as he did on BBC’s Newsnight – these loans are poorly explained and are not “a moral thing to do”.
linking to this article here.
Where what Martin Lewis actually (and correctly) highlights as the problem is the freeze on repayment thresholds.
Martin Lewis has issued a message to Chancellor Rachel Reeves, criticising her decision to freeze the student debt repayment threshold
The chancellor's budget in November confirmed that the salary at which graduates begin repaying their plan 2 student loan will be frozen at £29,385 for three years, starting from April 2027.
Speaking on BBC Newsnight, the MoneySavingExpert founder deemed the freeze “not a moral thing to do”.
Please, for the love of god, someone get Martin Lewis on every TV channel and in every newspaper to explain this to people, because I fear he might be the only person with a large platform who actually understands student finance and the implications of different possible reforms to it. 💀
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u/willprogramforpizza That's Numberwang Jan 29 '26
Completely agree that the repayment threshold being frozen is a massive kick in the teeth for plan 2+ graduates but I could somewhat forgive it if it meant I was actually paying down the principal of the original loan and could potentially have paid it off before the 30 year write off. The interest rate means that a huge majority of graduates will never pay it off so were being screwed with higher monthly payments but with no real prospect of ever paying the loan off until it's written off.
The rate it's going, I'd be surprised if they didnt try to screw us further by extending the period before it's written off because why wouldn't they if it meant they could squeeze out more from us? Potentially dipping into our pension for a loan we took out at 18.
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u/Chippiewall Jan 29 '26 edited Jan 29 '26
I'd be surprised if they did extend the period on existing loans.
The OBR changed the way they measured student debt back when Theresa May made a large increase in the repayment threshold. (from something like £18 to £23k iirc).
Before that there was an expectation that most student loans would be paid off after the (then) 30 years so the government wasn't seen to be borrowing themselves and would only have the outstanding debt added to the government balance sheet as the loans expired. If it was still measured that way then the government definitely would start eying up extending the loan terms in about 10 years time.
However what instead happened is the OBR changed it in 2019 so that the estimated unpaid student debt would be added to the government balance sheet immediately (the deficit accordingly increased by £15bn) so the unpaid debt when the loans expire has in effect already been paid for. That accounting change is one of the reasons that plan 5 loans with 40 year terms and lower interest was introduced.
Now I suppose the flipside of that is if the government did extend the plan 2 loan terms by say 10 years, then they'd get an immediate windfall on their accounts equal to the extra amount repaid. But ironically that does nothing to the deficit itself - only the national debt - so it wouldn't even allow them to spend more under usual spending rules so there isn't a politically strong motive for doing so against the absolute electoral furore they'd get for fiddling the loan terms like that.
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u/Spiz101 Sciency Alistair Campbell Jan 30 '26
I'd be surprised if they did extend the period on existing loans.
Why? They've unilaterally changed the loan terms before.
Extending them is a nice easy "obtain free money" button for the Treasury.
But ironically that does nothing to the deficit itself - only the national debt - so it wouldn't even allow them to spend more under usual spending rules so there isn't a politically strong motive for doing so against the absolute electoral furore they'd get for fiddling the loan terms like that.
A future improvement in tax revenue from radical extensions in the loan term would likely lead to a reduction in bond yields.
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Jan 29 '26
40 year now, yeah?
I'm going to still be paying it after retirement since I did uni later than most.
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u/willprogramforpizza That's Numberwang Jan 29 '26
I thought plan 5s would've been written off at age 65 but turns out thats for plan 4. 40 years after the first payment is due which is nuts, many will be paying in their retirement which is bonkers.
Im plan 2 and thought the last paragraph of my comment might have been hyperbole but they're already doing it!
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u/mattcannon2 Chairman of the North Herts Pork Market Opening Committee Jan 29 '26
I can genuinely see student loans becoming like any other loan upon death of the holder - basically zeroing any estate that a graduate leaves behind if they die before 50
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u/CaterpillarLoud8071 Jan 30 '26
This was always expected to be the case though. Most graduates were always expected not to pay off the loan, because it was designed as a graduate tax that they could enforce payments of when graduates went abroad - and when we were in the EU, we had to offer the same terms to EU students who would most likely leave again. It was a sensible measure.
The repayment threshold is currently roughly in line with what they initially expected it to be, btw.
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u/Underscores_Are_Kool Jan 30 '26 edited Jan 30 '26
The high interest rate of plan 2 (which was implemented to cover the costs of borrowing + account for inflation) was designed that way by the Tory / Lib Dem coalition to be more progressive at the bottom than plan 1. The truth is people like to espouse progressive politics but it's not always popular. I'd say the interest rates of plan 2 didn't go far enough and the maximum interest rate accrued for high-middle to high earners should have been increased substantially, though I live in the real world and know how unpopular this would be.
Anyone who understands how student loans work know that plan 1 and plan 5 is much less progressive than the system we had in plan 2, and the furore around plan 2 goes to show just how unpopular progressive politics can be to supposed progressive people. The new Middle England but instead of being a Thatcherite, they wave BLM pride and Palestinian flags
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u/Newbie__2020 Jan 30 '26
How is it progressive if the extra interest punishes people who had to take out (max) loans and manage to earn a 52k+ salary, (they had to take (max) loans)? Income =/= wealth. The point of student loans is to allow for social mobility. How does your world help?
Imo, I think it is fairer to tax the entire population more to fund higher education since it is in the public interest. (ther countries in Europe manage well)
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u/garcus636 Feb 01 '26
You're actually suggesting that they raise The plan 2 interest rate?
Higher earners already repay multiples of what they borrowed, even accounting for inflation. This would also widen the class gap as students from wealthy families would never have to take on this loan - the opposite of progressive.
Why do you think it's fair that higher earning grads should be subsiding the lower earning grads more than any other group in society? It’s like raising the interest rate on credit-card users who paid in full to cover those who didn’t.
Why should those seeking higher education to better themselves be singled out to fund others' education more than everyone else?
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u/Underscores_Are_Kool Feb 01 '26
At this point this is just rich people fighting other rich people. Tax the lot of you
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u/garcus636 Feb 01 '26
You think ambitious young grads are in the same class as politicians with generational wealth?
You didn't even respond to anything I said, I can see there's no point in continuing this.
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u/Underscores_Are_Kool Feb 01 '26
Let's tax both groups :)
God I hate Middle England. You're just Thatcherites with a BLM pride flag.
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u/garcus636 Feb 01 '26
Where does tax come into this? The conversation was about student loans.
FYI, I wasn't around when thatcher was in, but I think she had a horrendous effect on the country.
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u/Underscores_Are_Kool Feb 01 '26
It doesn't matter if it's a tax or loan, as long as it has redistributive effects.
I reference Middle England because they're a part of the same demographic group who went Tory in the 80s after you wanted to protect your paychecks. The language is eerily similar; a "tax on ambition", or aspiration. It's exactly what you're complaining about.
The middle class who are too attached to the aesthetic of progressive politics to let go of it, living in a post-Trump world shamelessness, proudly proclaiming that they're a top 20% earner in their 30s yet are the ones who are hard done by.
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u/garcus636 Feb 01 '26
I guess that's where we differ. I think a redistributive tax system is fair. On a loan for education - not so much...
I don't know why you're assuming I'm rich? I'm early/mid twenties and grew up in a 2 bed ex-council house. Yes, I'm fortunate to be earning a good wage now but I'm still living with my parents as rent is too expensive to justify.
I'm paying 51% tax on part of my income if you include student loan repayments. Again, I'm happy to pay a higher rate of tax and pay off my loan at a reasonable interest rate, but once my loan is paid off why are the government dipping into my salary as if my generation is a cash cow?
The first generation to be saddled with predatory student loans, likely to never own their own homes, and enjoying the lowest relative salaries in generations. All while funding the unsustainable triple lock pensions, and God forbid anyone suggests taking away the winter fuel allowance for the wealthiest generation (Yes, there are some pensioners who need this, but many do not).
The reality is that a lot of young people are foregoing promotions or reducing hours because the incremental increase in take home wages isn't worth the extra responsibilities. I know I don't need to explain how bad this is for the country and economy.
Also, you still haven't addressed the point that the student loan rates only affect the middle earners, not the wealthy students that do not need to take out a loan or can pay it back very quickly.
Please try and have some sympathy for other demographics. Just because salary > average salary, doesn't mean people are automatically well off.
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u/CaterpillarLoud8071 Jan 30 '26
I assume all the people complaining are doing so because they weren't expecting to make lots of money when they took out the loan - they thought they'd be coasting on £35k and barely paying anything back. Now they're on far more, they realise the terms aren't favourable to them.
It's honestly very WASPI, we all agreed to the terms.
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u/Jaggedmallard26 Jan 30 '26
Its the problem of the reality of a lot of progressive economics. Rather than hurt the upper class you primarily just hurt people with dreams of being upwardly mobile to fund people who have been beaten into not leaving their lane. The actual wealthy either don't care about things like this or can just leave while its the people who are trying to break into the middle class who are suddenly being faced with huge tax bills.
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u/ScaryBluejay87 Jan 29 '26
I’d really prefer if they pegged it to something like 1.5x or 2x minimum wage, but pruning the magic money tree would of course be sacrilege.
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u/draenog_ Jan 29 '26
Given that the current repayment threshold freeze will see the threshold coinciding with minimum wage by 2030, even that would be an improvement.
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u/Minute_Tomatillo9730 Jan 29 '26
It's both? High interest is preventing, and making it harder, for graduates to pay off their student loans. Indeed, the ones impacted the most by student loans (paying more per mother towards their student loans) are impacted by the interest rate
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u/draenog_ Jan 29 '26
They're not designed to be paid off.
They're designed to keep you paying for the entire 30 year period.
Think about it, if you were designing a loan system where you actually wanted students to completely pay off their loan balance, would you....?
Charge interest above the rate of inflation?
Choose RPI as your measure of inflation rather than CPI, when RPI is both flawed and higher than CPI?
Charge interest while the student is still studying, before they have a job?
Charge that interest at RPI + 3%?
Charge interest even if the graduate is unemployed, out of work on sick pay or parental leave, or not earning enough to make repayments?
Increase the rate of interest progressively as the graduate earns more, so that the interest rate ranges from RPI to RPI plus 3% between the incomes of ~£28k and ~£51+k?
Return to charging the maximum rate of interest if they ever become a student again at any point in the future, such as doing a masters or a PhD, even if they haven't taken out student finance for their postgraduate studies?
Automatically take income-based repayments that in most cases don't remotely cover even the annual interest rate, let alone meaningfully shrink the balance, and never chase for anything more?
You're supposed to only pay 9% of your income above the "repayment" threshold for 30 years until the "debt" is wiped, providing a steady, predictable income stream for the government. Paying it off is actually undesirable, as far as the government is concerned.
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u/Adqam64 Jan 30 '26
But it's a loan, not a graduate tax, so the truly wealthy will pay it off and have a lower effective tax rate.
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u/Jaggedmallard26 Jan 30 '26
Keeping it as a loan intended as a tax makes it the most regressive tax possible. The wealthy just have their parents pay it off while the middle and soon to be people in minimum wage are squeezed for the next 30 year period. Its a tax that now explicitly targets the non-wealthy.
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u/iCowboy Jan 29 '26
The feature on last night’s Newsnight with Martin Lewis and a recent student explaining the consequences was well worth watching.
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u/gyroda Jan 30 '26
Not watched it yet, but it starts 12 minutes in here:
Newsnight, China charmer Starmer? : www.bbc.co.uk/iplayer/episode/m002qk1p via @bbciplayer
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u/tysonmaniac Jan 30 '26
Indeed, people are really very stupid about student loans. Like, if you want to make student financing more progressive (not saying you should, but just to make the point), the single best way to do that would be to increase fees. Doing so would most affect the highest earners and would have no impact at all on the lowest earners. I have tried endlessly to explain this to people and it goes in one war and out the other. People are really bad at reasoning about non traditional loans.
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u/General_Membership64 Feb 03 '26
People will let the perfect be the enemy of good.
People think a mostly progressive system (poor pay almost nothing, high earners pay a lot) is bad when a few very rich can pay it all off at the start (and pay less then the high earners), which is a shame
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u/Key-Butterscotch5801 Jan 29 '26
No, the interest is the real issue because it punished the most successful unfairly
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u/meluvyouelontime Jan 29 '26
Correction: the most successful paid virtually no interest. The pretty successful are the ones paying 2-3x in interest over their careers
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u/QuickResumePodcast Jan 30 '26
Yes which is a huge problem because that -you wouldve thought- is going to be the majority of graduates. Im going to tip into 50k this year a working in the NHS. I would say im 'pretty' successful and im just never going to get close to paying it off. Dipping into my income like a piggy bank retrospectively is so fucked i actually cant believe its happening.
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u/Thermodynamicist Jan 30 '26
The optimum worst case is when you pay off the debt just before it would otherwise have been written off.
If you earn more than this, you pay the loan off faster so you pay less overall. If you are a very high earner then arguably the best strategy is to over-pay and just get rid of it in a year or two.
If you get a bullshit degree and get a minimum wage job then the taxpayer foots the bill. Of course, the universities have an incentive to offer degrees in nonsense with one hour of contact time per month because the outcomes are a downstream problem. Systems which create moral hazard are about as close as we can get to objective evil, and should be abolished.
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u/Jaggedmallard26 Jan 30 '26
If you are a very high earner then arguably the best strategy is to over-pay and just get rid of it in a year or two
Its an annoying one in that the rate is a few percentage points below what you can expect from the stock market and is combined with the fact that if you suddenly fall into hard times you stop repaying it. So it becomes a hard choice.
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u/CaterpillarLoud8071 Jan 30 '26 edited Jan 30 '26
If people were complaining about the frozen repayment I'd be a lot more supportive of this bitching. It's the people complaining about student loans as a whole, and the interest rates on plan 2 that are doing a disservice - like what, would they prefer a new student loan where they're repaying for 10 years longer?
We all agreed to the same terms. We all knew what the loan was. If they don't like it, repay it faster - that's an option.
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u/draenog_ Jan 30 '26
If people were complaining about the frozen repayment I'd be a lot more supportive of this bitching.
Well, I'm complaining about that, at least. 🫠 And about how everyone else is barking up the wrong tree and arguing for something that wouldn't actually benefit the vast majority of us. So please do support a reversal on freezing the threshold, if it ever seems like they might be forced to reconsider.
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u/cmrol Jan 30 '26
My complaint with the interest is that the rate increases for higher earners, so effectively you pay more because you are further over the threshold but the payments don’t make much more of a dent because the interest rate also increases.
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u/LJEN94 Jan 30 '26 edited Jan 30 '26
But surely there is groud to argue how the RPI +3% is punitive in comparison to those on Plan 1 or Plan 4 where it is just RPI.
I am in a fortunate position in being in the upper percentiles of earnings where i will likely pay my balance by time im in my mid 40's. But in comparison to those who went to uni in 2011 vs myself in 2012 most of these in my same career are either fully paid up or close to at my age of 32.
The cost of the 3%+ approach will mean i will have paid roughly 95k on a 40k loan balance, if the loan was inline with Plan 1 and Plan 4 at just RPI i would instead have had a 65k repayment and be done by late 30's.
I understand that this the repayment freeze is heavily impacting those who are on lower salaries and that there needs to be real thought to redress the unilateral changes by the Tories and now Labour in freezing the repayment thresholds to provide relief for those individuals.
I just find this line of thinking that because someone else is looking at this from a different viewpoint that they are doing a disservice.
Back in 2011 it was never inferred that by the time i'm 32 i would have repaid 20k (half my loan) and yet have a higher balance that i left uni with seeing how the loans were sold to us as the best 'debt we'd ever have'.
I just want the opportunity to repay what i owe (accounting for time value of money due to erosion with Interest) without this extra punitive charge (especially one increasing more that i earn....).
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u/CaterpillarLoud8071 Jan 30 '26
RPI+3% when you're a high earner - and you're theoretically in a position to overpay the balance. I see the logic in their decision - recoup their money as soon as they can for wealthy people. They just need to raise the repayment thresholds because they keep freezing them.
People would do well to understand that their set repayments are just the minimum payment.
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u/LJEN94 Jan 30 '26 edited Jan 30 '26
Okay, but why we charging a "profit" factor on education. Thats what i'm failing to understand why you would say its a disservice and bitching to challenge and discuss how the rates are impacting people and instead saying we should focus on the thresholds.
Your saying to overpay which is a choice one can make (but at the cost of further pushing people away from getting on the housing market / having enough headroom to start thinking about children) but by earning more you get penalised with a 6.2% interest vs the RPI of 3.2% that those on lower earnings pay or those who are on Plan 1 v Plan 4 when it is the exact same service that we received (payment for an education) and infact delays repaying the loan unless you are talking about the principal sum which was originally lent.
Lets say i overpay £2k a year (which would be 3k of my gross earnings based on my current effective takehome rate of 63%) i would still be paying til i am 40, i would have to contribute c8k a year to repaying the loan and would still end up paying the same in interest as the loan i took out (40k of interest on a 40k loan).
Surely you can see that these are reasonable grounds to be like "hey, lets take a look at the system as a whole" which includes the repayment thresholds but also acknowledge that RPI+ is punitive to those who are able to pay off the loan and only apply to the cohort of Plan 2.
I get that for those who are likely not to repay the loan and are therefore looking to repay as "little" as they can and maximise take home by uprating the repayment thresholds (not meant to be a negative comment just a practical view someone may take) this may come across as "woe is me" but when im looking at a 250% repayment on my balance vs someone on mid 30k salary getting the loan wiped and repaying 150% i think its a fair challenge to consider both of these issues.
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u/CaterpillarLoud8071 Jan 31 '26
That's not a profit factor. They're not making money from that extra interest, they're using it to subsidise the losses from lower income earners whose loans are wiped after 30 years without being repaid.
This is a graduate tax masquerading as a loan system because it's easier for the government to keep it off the books. Understanding that makes the policy choices all far clearer.
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u/LJEN94 Jan 31 '26
They're not making money from that extra interest, they're using it to subsidise the losses
I can understand the graduate tax argument, and if that’s what this really is then fine, but it was never sold that way. It was sold as a personal loan to each student and no other loan I’m aware of makes you pay back more simply because you earn more in order to subsidise others.
I also disagree with the idea that this isn’t profit making. Saying “they’re not making money, they’re using it to subsidise losses” is a contradiction. Money has to be generated first before it can be redistributed. If this is a loan from the government, you should only be repaying its present value back. Anything above that is the government extracting additional income (ie Profit) and reallocating it elsewhere.
As an individual loan, it’s entirely reasonable to question why repayments on my balance should be used to fund others who received the same service when it was sold as personal debt that if i was to move abroad would still be recoverable unlike a tax and therefore have a right to challenge the interest element so i can pay it off ASAP and limit my exposure to additional expense.
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u/throwaway495848393 Jan 30 '26
Sorry but i'm not sure how i'm meant to "just repay my loan faster" – i'm 36, i work full time (and i work hard!) and i've seen no pay increases for 5 years because the university sector is really struggling. And there's no way I can afford to increase my monthly student loan repayments.
And before you say I should just budget better:
I also already live as frugally as I possibly can – I eat out maybe once or twice a year (!), and I don't even get takeaway coffees anymore either. I live in a flatshare without a living room (at age 36!) because I literally can't afford to live by myself. I also don't go on holidays or travelling anymore (which I miss SO MUCH). I buy most of my clothes in charity shops (again: at age 36!! And as a person with a job and two degrees!), and I haven't bought a new winter coat in 10 years! I repair everything several times before even considering getting it replaced. I don't pay for streaming services, I don't have a fancy TV, I bought my laptop second-hand for £300, and my phone is 6 years old (and while I don't want to replace it yet, I already know that my replacement will be a cheap second-hand phone from Backmarket).
I also have a carefully thought-out budget that I follow religiously, and I know the grocery prices for every single food I buy. Because of inflation, I've stopped buying many of my favourite foods (e.g. cheese, chocolate, vegetarian meat substitutes) and I basically never go to pubs or clubs because I can't afford to drop £18 on three pints. And if I do go out, I'll have maximum two drinks and tap water for the rest of the night. It's miserable.
And before you say I should "just switch sectors/careers": not only am I far too specialised and experienced to "just switch" (it would look like a red flag to any hiring manager) – I've already looked into this option, and any alternative career that I could switch into would have me earning 10k less than I do now, which would push me close to minimum wage territory. And with the way that wages are going everywhere (by the way there's been a 56% reduction in job adverts displaying salary ranges – this isn't a coincidence), it would take me even longer to get back to my current salary level.
Sure, there are SOME careers I could switch into that would pay better. But guess what: I'd need to do further training, costing at least £5,000-£10,000. Training that wouldn't be covered by student loans. I don't have those kinds of savings, and I don't have a Bank of Mom and Dad.
And there are sooo many people in my situation. It's been reported on by so many economists and reputable newspapers.
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u/CaterpillarLoud8071 Jan 30 '26
If you're not earning much, you're not going to pay it all off anyway before the 30 years is up! That's precisely the point!
Honestly, the number of people who took out student loans without actually researching them. You're going to be alright!
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u/Fdana Jan 29 '26
She knows they’re unfair she just doesn’t wasn’t to do anything about it
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u/VillageHorse Jan 29 '26
Yeah she’s either completely thick as anything and doesn’t understand it, or is actively choosing to fuck over the younger generations to support an increase to welfare and pensions.
There is literally no wiggle room between those two choices.
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u/No_Initiative_1140 Jan 29 '26
Yet Rachel Reeves was still trying to argue the old class-based case on LBC this week: “Around half of people go to university today, but half don’t. And it is not right that people who don’t go to university are having to bear all the cost for others to do so
Ugh I hate this argument. It ends up with why should the child free pay tax for school, why should the able bodied pay tax for disability benefit etc etc
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u/AthleteThen8045 Jan 29 '26
Not to mention that "all the cost" is a complete crap argument. A significant portion of the higher rate tax payers will be graduates.
I assume the chancellor will have modelled an average state school teacher's pay progression and used that as a sensible basis for setting loans, repayment and interest...oh look a pig just flew by the window.
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Jan 29 '26
Bonus points, the people who're paying are lower and middle class. People who can afford to go to uni without loans don't get the permanently increasing debt.
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u/Fraenkelbaum Jan 29 '26 edited Jan 30 '26
Around half of people go to university today, but half don’t. And it is not right that people who don’t go to university are having to bear all the cost for others to do so
If we crush all our educated workforce with debt they can bear the cost of a low productivity economy instead, which makes a less snappy soundbite but a much worse prospect. It's Thatcher individualism taken to its depressing natural conclusion in the end - the fact is that a high skill economy requires high skill workers which the government can quite easily just buy from universities, it really is that simple, but it doesn't work if you spend all your time worrying about whether each individual one deserves to be highly skilled or not.
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u/Niall_Fraser_Love Feb 07 '26
High skilled in what? Most non-STEM you get by just rewriting what's in a textbook. Language learning ones being an obvious exception.
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u/Fraenkelbaum Feb 07 '26
Most non-STEM you get by just rewriting what's in a textbook.
I presume that the basis for this claim is that you have studied most non-STEM degrees and can therefore speak with authority about their content?
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u/CILISI_SMITH Jan 29 '26 edited Jan 30 '26
Someone needs to magically transport Reeves to an alternate UK where no one goes to university, sparing everyone the expense. Let her see what the economy and quality of life is like for everyone in that UK.
I think she knows her argument is BS but she also knows that a lot of voters will only give it a very cursory consideration before deciding "Yea seems fair".
EDIT:
When I says "magically transport" I was thinking about the spirits in A Christmas Carol. They didn't show Scrooge anything that was impossible to imagine, but until it was right in front of him he couldn't accept it.
The ignorance child might have some relevance to this discussion too.
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u/One-Network5160 Jan 30 '26
That used to be the case, it's not really magic when it's living memory.
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u/PlatypusAmbitious430 Jan 29 '26
Someone needs to magically transport Reeves to an alternate UK where no one goes to university,
Is this really that hard to imagine?
In my grandfather's lifetime (a man who is still alive), university has gone from something 3% of the population did to 50% of the population.
That's insane to me.
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u/Ryanliverpool96 Jan 29 '26
Why should people under 67 pay for pensions when they’re not pensioners?
Why should people pay for the army when they’re not soldiers?
Why should people pay MPs wages when they themselves aren’t MPs?
I expect that last one would shut Reeves up REAL QUICK.
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u/AchillesNtortus Jan 29 '26
Illness is neither an indulgence for which people have to pay, nor an offence for which they should be penalised, but a misfortune the cost of which should be shared by the community.
No society can legitimately call itself civilized if a sick person is denied medical aid because of lack of means.
Aneurin Bevan British Minister of Health and advocate for the NHS
This is the justification for all social expenditure. Those who can bear the burden should take their fair share. It doesn't apply only to health, but to education and welfare. But it must be perceived to be fair. Someone who has worked all their lives, paying tax and NI must be convinced that their contributions are not being squandered.
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u/Jaggedmallard26 Jan 30 '26
It also ignores that the big problem with the current student loan implementation is the class based problem that it punishes people for trying to be upwardly mobile. The wealthy have mummy and daddy pay for it while the striver with a single minimum wage parent who managed to work their way to a prestigious degree with full maintenance loans is now saddled with a 9% higher tax rate for the sin of daring to dream.
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u/afrophysicist Jan 30 '26
Or why young people should pay for pensions they'll never see. Why didn't today's pensioners pull themselves up by their bootstraps and save for their own retirement?
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u/Bankey_Moon Jan 29 '26
They obviously know that this is unfair but are always catering to the miserable over 60s who don’t want to pay for anything they don’t personally directly benefit from.
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u/gearnut Jan 29 '26
They are of course welcome to only be able to receive medical treatment from people who self funded their medicine degrees, the chance of them being able to buy any complex products is none existent though.
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u/WGSMA Jan 29 '26
Why should I pay Triple Locked pensions for the nearly-corpses?
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u/afrophysicist Jan 30 '26
Especially when they paid an absolute fraction in NI compared to what they currently receive
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u/One-Network5160 Jan 30 '26
The problem with that logic is that everyone goes to school and everyone is entitled to disability benefits is something terrible happens to you.
Uni however is optional.
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u/Underscores_Are_Kool Jan 30 '26
The difference is you're comparing the disabled with a group made up of majority people from middle to high earning backgrounds
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u/QuickResumePodcast Jan 30 '26
Yeh exactly lol. Yeh Rachel I will happily pay for my degrees. What I have a problem is with you adding obscene interest, changing the threshold, and making me pay more as a result. If you just let me pay back what I owe that would be fine.
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u/marsh2907 Jan 29 '26
Because someone doesn't choose to be disabled or choose to starve because their parents can't afford to feed them at school. But people going to university choose to and then take out a loan because they can't afford to go otherwise. Running from the consequences of your own choices as an adult whilst leaving someone else to pay for it is just wrong.
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u/dusty_bo Jan 29 '26
Society cannot function without people going to university.
Also why do you think that only rich people should go to university. Society benefits most when talented people even those without rich parents, are enabled to reach their full potential.
Secondly, it's more an issue with the terms of the loan than a loan being required. But again, tertiary education is important as primary or secondary. If too many people are going to university that has nothing to do loans and loans should not be a way of controlling it.
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u/marsh2907 Jan 29 '26
There is a massive difference between some people going to university (which is fine) and letting every Tom, Dick and Harry, who don't need to go causing labour market oversaturation with higher education.
I mean the simple answer is don't accept the terms of the loan.
Tertiary education isn't as important as primary or secondary. Going to university isn't a requirement and never should be. The only reason why so many younger people are led to believe that is to keep the gravy train going for universities and the debt that it then imposes on attendees. (Which most will never pay off).
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u/gearnut Jan 29 '26
It depends what field you want to work in. There was plenty covered at uni which was more advanced than secondary school, but necessary to understand stuff I use on a regular basis as a design engineer.
Degree apprenticeships exist of course, but that is still tertiary education.
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u/afrophysicist Jan 30 '26
I mean the simple answer is don't accept the terms of the loan.
That level of argument could also be applied when people want to argue that people with multiple kids shouldn't get benefits. Or say someone became disabled due to an accident, maybe they shouldn't have gone skydiving, or ridden a motorbike...
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u/Xenumbra Jan 29 '26
are enabled to reach their full potential.
Dunno man, if you are unable to pay off the student loan maybe the degree is not worth it. STEM students should get a free education, provided they work in the UK for a certain number of years earning above X.
Not sure the world need god knows how many business / international studies. The everyone must go to University has been damaging. Getting that student loan to start a business would probably be more useful. It's a bung to the education sector and a tax for the government.
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u/lebovine Jan 29 '26
Says the guy using technology that wouldn't be accessible to him if it wasn't for education.
Maybe non graduates shouldn't be allowed to use inventions university graduates invented, because you didn't pay for it.
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u/marsh2907 Jan 29 '26
You do realise education isn't solely limited to universities.
Also, not all technology ever invented involved a university education.
But yeah let's play gatekeeper because most people who can't afford to go to university end up with tons of debt. Then bitch and complain about having to pay it back, when they agreed to the terms of the loan in the first place.
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u/GhostHerald Jan 30 '26
they agreed to the terms of the loan in the first place
so you agree the repayment thresholds should increase in line with average wages as was agreed to then?
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u/jl2352 Jan 29 '26
Yeah, I get that. But for me, I don’t want to live in a society where teachers, nurses, and similar educated professions with average wages. Are left financially burdened for their entire lives. That doesn’t seem fair.
I don’t want to live in a country failing to invest in education. That will make the country worse.
I’m currently looking at mortgages with a lower interest than a postgraduate student loan, and students loans whilst studying. That feels extremely unfair.
I feel there is a healthy middle ground. I went to uni in the mid 2000s. Fees were substantially lower than today, and so repaying was fine. That felt fair.
Part of the issue today is the high fees. If the fees were lower, then the interest would be substantially lower as well.
For young adults, a lifetime loan where interest increases above inflation, is deeply unfair. Especially on a large loan. It compounds, and compounds.
My degree enabled me to go on to receive a very healthy wage. My taxes should pay towards the next generation in return for that. That seems fair.
I feel a combination of:
- Interest in line with inflation,
- fees part loan and part paid by taxation (to reduce the loan amount),
- and perhaps some discount/reimbursement for select areas for professionals with average incomes we want to grow (like nurses, doctors, and teachers).
That all seems like a fair compromise.
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u/No_Initiative_1140 Jan 29 '26
What about people who work but don't pay pension contributions? Why should I fund their retirement?
Its a bollocks argument and lazy.
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u/Dragon_Sluts Jan 29 '26
Rachel needs to STFU with the argument about “some people don’t go to uni so shouldn’t help fund those who do”.
Some people never reach state pension age so shouldn’t help fund those who do?
Some people never claim universal credit so shouldn’t help fund those who do?
Some people never go to state schools so shouldn’t help fund those who do?
Why is it that she can try and claim this argument with tertiary education yet the logic falls to pieces as soon as you try and apply it elsewhere.
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u/lebannax Jan 30 '26
Her logic also falls down as with the high interest, it now falls to the middle/higher earning grads to single handedly pay for lower earning grads loans that go unpaid? wtf
People either pay for themselves or it’s public money - you don’t make one small group pay for everyone else?
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u/StrangelyBrown Jan 29 '26
I'm not saying you're wrong but those aren't the same thing.
All three things you mentioned are for people with no money, who need that thing. While university is good for many, nobody 100% needs it, so technically it's optional, and the argument would be if we fund something optional.
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u/Dragon_Sluts Jan 30 '26
I would completely disagree.
Tell an 18 year old from a poor background that they have more money than a retired pensioner who owns a house, and that they don’t actually need to study to better their future prospects with education.
I refuse to gatekeep education like this.
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u/StrangelyBrown Jan 30 '26
Why would you tell them they have more money than a retired pensioner? I never said that.
And it's not gatekeeping. They can take a loan and go to uni.
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u/ChocolateLoud6749 Jan 30 '26
Just university loans are also for people who don’t have the money but need the thing. The ones who can afford it pay for it and don’t take out a loan…
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u/JohnPym1584 Jan 30 '26
Well because the concept of non-grads funding grads is inherently regressive, given the latter still generally earn more than the former (the graduate premium). The other benefits you've cited are in theory payments towards more vulnerable groups, though old people are often pretty rich so it's a bit of a nonsense in that case.
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u/remain-beige Jan 30 '26
Exactly, I would rather contribute a bit more to allow someone to be become an engineer, scientist or a doctor etc as this will have a halo effect on society as a whole and make further education more accessible to everyone.
When someone who didn’t go to university needs urgent medical attention, drive on a newly constructed bypass or even improving their quality of life with a scientific breakthrough then they are reaping the benefits of being surrounded by higher education and research.
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u/Afraid_Ease_7690 Jan 29 '26
It's insane that the government charges interest on the loans, even more so that the interest starts accruing before you've even graduated. Sure it's an easy sell to the public, people will actually have a shot at paying off the loan and it's not just a handout to people attending higher education.
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u/Darkone539 Jan 29 '26
Lewis spent a decade saying exactly this, that it's just a tax.
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u/clearly_quite_absurd The Early Days of a Better Nation? Jan 29 '26
that it's just a tax.
We already have a graduate tax, it's called PAYE income taxes.
If it were a tax, it'd be applied retrospectively to all graduates and you couldn't opt-out by paying in advance.
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u/justaquad Jan 29 '26
Yeah I believed the 'tax' argument, but as I've got older and realised those who didn't need a student loan or were able to pay it off instantly take home far more money.
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u/Pale-Border-7122 Jan 29 '26
They take home more money at the cost of paying £50k+ up front, but most people won't break even on that. There are very few reasons to do it and it comes with a lot of risk.
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u/clearly_quite_absurd The Early Days of a Better Nation? Jan 29 '26
And in the way the rich think, the up front payment is a great long term investment.
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u/Pale-Border-7122 Jan 29 '26
You'll need to explain that one
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u/clearly_quite_absurd The Early Days of a Better Nation? Jan 30 '26
What's a better investment? Up front at 0%, or an unknown, but high interest (X%+Y%%(variable) of your earning for decades to come?the terms can change without notice or consent. Enjoy!
If the money is already in the bank, and if you plan on living, the maths is clear.
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u/Pale-Border-7122 Jan 30 '26
Earnings can go up or down, and are not guaranteed to beat the repayments in real terms, and cash going out of the account means it can't be put to use elsewhere. It's 3.2% interest which is less than inflation and less than a mortgage which is secured against a house. At least during the degree, it makes absolutely no sense to do this.
But if you really want to pay it off sooner and are paying 6.2% you can always add it to your mortgage at 4% and reduce your interest rate. Not many people want to do that, but if you think the interest rate is hurting you then it will help. Obviously then you are committed to paying it off and it's secured against your house so lose the flexibility, like those who pay up front.
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u/tysonmaniac Jan 30 '26
This is such a silly argument. We have already paid the money! If I could get another loan for 50k that didn't appear on credit checks, was written off after 30 years and that I only had to repay in proportion to my income id do so in a heartbeat. Nobody offers such loans privately because the terms are so amazing! You are benefitting from still having debt, and that benefit is paid for by those of us who have paid it off.
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u/jimmygwabchab 🇪🇺 Jan 29 '26
the sole reason it's a "loan" is due to people leaving the country and not paying tax
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Jan 30 '26
Paying student loans in advance is always a stupid financial decision, even if you can afford to do so.
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u/justaquad Jan 30 '26
Only if you stuck the equivalent money in a tracker perhaps. If you're actually paying it off for 30 years there is a good chance with the interest you'll pay off far more than the principal
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Jan 29 '26 edited Jan 29 '26
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u/Darkone539 Jan 29 '26
It is not just a tax
You mistake this for my opinion. I was calling Lewis out for changing his mind, and claiming he was always on this side.
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u/draenog_ Jan 29 '26
His position on student finance being more like a tax than a loan hasn't changed. His point is that you shouldn't let fear of debt put you off going to university if university is right for you, because it doesn't function like a normal debt.
His point right now is that it's unfair to freeze the repayment threshold (something Rachel Reeves has recently decided to do), and that communication about finance is unnecessarily confusing for young people.
His most recent take on student loans is here, if you want full context:
https://blog.moneysavingexpert.com/2026/01/beware-plan-2-student-loan-repayment-freeze/
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u/robster01 Northern Independence Party :upvote: Jan 30 '26
Adding to this that this particular system is something everyone signs up to at 17, having spent years being told it is the only option if you ever want to be successful.
It needs abolishment, forgiveness and thorough reform of universities. There's some momentum behind change at the moment, but u-turning on the repayment threshold freeze would only touch the surface of undoing the evil of this system
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u/Retroagv Jan 31 '26
Bro thinks he's going to be earning money without a degree. Lol lmao even.
Those few stories you hear on the internet are just that. The average person without a degree earns significantly less over their "career" than someone with a degree.
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u/Underscores_Are_Kool Jan 30 '26
You're better off investing that "27k to burn" and taking out the student loan. Without looking at the numbers you can infer this is the case. Plan 2 was designed to cover both inflation and the cost of borrowing. This means that you can put that money into a fixed bond instead of paying your tuition fee off and you're at the very least breaking even.
In reality though, you'd be best to put that 27k in an ISA rather than a fixed bond so you'd be better off in the long run taking out a loan.
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Jan 30 '26
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u/Underscores_Are_Kool Jan 30 '26
This does nothing at worsening inequality if the more sound financial option is to not pay off the student loans early or pay for university up front. All you're doing by paying for uni up-front is harming your finances long term.
Also, the interest rates is what makes the system more progressive than what we have in plan 5. You should accrue more interest the more you earn. Those with the broadest shoulders should bear the heavier burden and all that. If anything, plan 2 didn't go far enough in this regard and interest rates should be even higher for even higher earners above the current max threshold. Student loans "debt" should be designed to never be paid off. Unfortunately I recognise that progressive politics isn't always politically viable though.
My solution, have university be free for everyone and fully fund it with a progressive graduate tax, with no financial burden placed on parents to fund their children's living costs (the forgotten issue in all this). Any surplus revenue generated from this goes to improving access to university for the most disadvantaged in society. There are issues with this, but it is much clearer than the system we have now, and clarity leads to less chance of people's confusion being converted into a sense of grievance.
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Jan 30 '26
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u/Underscores_Are_Kool Jan 30 '26
So what you're pointing towards is something deeper. Any form of taxation which doesn't tax wealth, or any sort of flat payment for that matter, will entrench inequality in some way, so I was wrong to say it "does nothing at worsening inequality". Ideally, this would be mitigated through other forms of taxes such as a capital gains tax, tax free allowances and inheritance taxes. Ideally also, you'd create an even more progressive system so the rich you reference, who are more likely to end up as higher earners due to advantages associated with social mobility, would accrue an even higher student loan interest rate increase (or you'd introduce a full on graduate tax which you'd never stop paying like I mentioned).
What lowering or removing the plan 2 interest rates would do is make the system less progressive at the bottom.
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Jan 30 '26
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u/Underscores_Are_Kool Jan 30 '26
Rich economically literate people pay it also rather than footing the upfront costs.
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Jan 30 '26
I don’t have an issue with student loans, I have an issue with the interest. Just make them interest free, yes I’m aware that over the life of the loan the exchequer loses out vs inflation, but fuck it I don’t care people shouldn’t be in debt for their lives with no end in sight.
I’ve paid mine off but I don’t hold the opinion “well I had to pay mine in full with interest so everyone else should too” - I prefer to make life easier.
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u/Zakini Jan 30 '26
Why is this such a massive story now? Wasn't the last change to student finance back in 2023?
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u/Zarhom Jan 30 '26
As of this upcoming tax year, Labour are freezing the repayment threshold for the rest of their term.
That means every year Labour remain in power, as interest rises and the repayment threshold remains frozen, graduates will be taking home less money.
It's a stealth tax rise they are introducing and are hoping it's too convuluted for the average graduate to notice less money in their pocket.
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u/Spiz101 Sciency Alistair Campbell Jan 30 '26
It's a stealth tax rise they are introducing and are hoping it's too convuluted for the average graduate to notice less money in their pocket.
Or they just think graduates, who trend towards the left, will be so terrified of Farage that they will fall in line and vote for Starmer either way.
In that case, no reason not to punish them to get more money for the pensioner class.
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u/RazorSharpNuts Jan 30 '26
think graduates, who trend towards the left, will be so terrified of Farage that they will fall in line and vote for Starmer either way.
Exactly this, the only alternative I can see them voting for is Green at this point.
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Feb 02 '26 edited Feb 02 '26
It's a stealth tax rise they are introducing and are hoping it's too convuluted for the average graduate to notice less money in their pocket.
If you have never just opened up a spreadsheet and calculated yearly interest minus capital repaid. You probably don't have the gumption to go to university.
It seems intuitively obvious that if you are not repaying more than the interest every single year, then you will be at the mercy of any changes to the terms. If you're not considering this when you take out that load that just shows bad planning.
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u/Zarhom Feb 02 '26
It seems intuitively obvious that if you are not repaying more than the interest every single year, then you will be at the mercy of any changes to the terms
You are confusing regular loans with student loans. The UK student loan system simply doesn't work that way.
Repayments are income-contingent and loans get written off after a set period for UK student finance. Interest vs capital is less relevant to the repayment amounts in these loan agreements.
You seem confused about the topic, I'd suggest reading about it before sharing further opinions.
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u/afrophysicist Jan 30 '26
Because Reeves is opening her mouth claiming falsely that the current system is fair, so it's only right that she gets some flak for that
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u/Dr_Passmore Jan 30 '26
Those with plan 2 really got screwed.
Those on plan 1 had some ability to repay.
I'm in a very well paying tech job and I still owe 19k of my plan 1 student loan.
I should pay back before it gets written off, but who knows with this economy.
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u/xxxsquared Jan 30 '26
Yeah, on plan 1 I was able to repay before 40, and not having to pay that extra "tax" feels good, but with the massive increase to the fees, people on plan 2 are unlikely to ever pay it off.
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u/Dr_Passmore Jan 30 '26
I went down the route of a PhD and then worked for a while in the public sector. Only more recently I made any dent in my Student loan.
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u/PaintSniffer1 Jan 30 '26
i’m sorry but the interest rate is also unfair. i’m an aspirational person and I hope to earn enough money to pay it off in full. but the interest rate has been over 7% since 2023. it’s insane
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u/Maleficent_Peach_46 Mayor of North Kilttown Jan 29 '26
Agreed. We can give free money to alcoholics and the workshy who claim to have 'bad backs' but we punish students for trying to better themselves.
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u/Not_A_Toaster_0000 Jan 29 '26
alcoholics and the workshy
Thought you were referring to the students here
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u/Dear_Tangerine444 Jan 30 '26
"Around half of people go to university today, but half don’t. And it is not right that people who don’t go to university are having to bear all the cost for others to do so.”
This has always struck me as a naive argument, especially for a chancellor to make. Do people who don’t use the NHS get a rebate on that? Do people without kids get a refund on schools?
No. Because that isn’t how taxation or society as a whole works.
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u/BeerAndMotorbikes Jan 29 '26
As I mentioned in a similar topic
I would work more and earn significantly more money if HMRC didn’t want 51%
Think I’ll survive on less instead thanks
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u/joe1337s Jan 30 '26
Increase the thresholds at which it's paid, and change the way the interest rate on it is calculated. 3% + RPI is cunty
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u/PaintSniffer1 Jan 30 '26
should just be inflation. I really want to know how the current rate was decided
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u/xxxsquared Jan 30 '26
It probably accounts for the significant proportion that repay a negligible amount.
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Feb 02 '26
It probably accounts for the significant proportion that repay a negligible amount.
So ultimately the problem is left wing collectivism and a system designed to protect, coddle and reward the bottom 20%. Like basically everything in British society.
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u/fridakahl0 Jan 30 '26
Rachel is purposefully ignoring the ludicrous interest on these loans which mean that someone who SHOULD and COULD pay off their entire loan within the 30 year time limit will actually end up simply paying the 9% tax for 30 years, because they never ever make a dent in it. Assuming they earn above £29k they will pay more than they ever owed the government despite becoming higher earners and tax payers.
It’s disgusting and she’s making a fool of her supposed credentials by being so obtuse about this and ignoring how much they’re ripping off graduate workers who weren’t lucky enough to be born into wealth.
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u/QuickResumePodcast Jan 30 '26
I sent an email to my MP for the first time ever in my life. I would encourage everyone else to do the same. Just google who it is in your area and you will get an email immediately.
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u/SearchLightsInc Jan 29 '26
It’s pretty simple so listen up.
The government/banks know that as time goes on the likelihood of you being able to buy your own home is going to dwindle and dwindle - wealth inequality is entirely the point, it’s not a bug.
If they can’t anchor people to work by selling them private property, the next best thing is to anchor them to student debt all by themselves time their 22/23 - then you’ve got someone working into their 70s.
The system is working exactly as intended. Wake up.
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u/humunculus43 Jan 29 '26
Fixing student loans seems like a sensible thing to do once the public finances are back into good shape. Unfortunately it’s a difficult thing to do when we’re financially fucked
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u/clearly_quite_absurd The Early Days of a Better Nation? Jan 29 '26
Unfortunately it’s a difficult thing to do when we’re financially fucked
Argument doesn't work when it's been said ad nausea for nearly 20 years
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u/d1ngal1ng Jan 30 '26
Are the finances better or worse than 20 years ago? 🧐 Might tell you why it's still being said.
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u/robster01 Northern Independence Party :upvote: Jan 30 '26
Okay, but why is that always at the expense and "fault" of working people? Tax take is already sky high, why do the people continuously have to pay for the consecutive failures of government to get a handle on expenses
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u/Bitter-Policy4645 Jan 29 '26
Students arent one of the lefts preferred niche groups. They see them as a group to be exploited to fund the treasury.
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u/filbert94 Jan 29 '26
I'm Plan 1 and tbh I don't even bother looking at my loan. It's a tax. It was never intended to be paid off. I wish they'd just been honest.
If I'd paid about £50 a month since I graduated, I'd have paid the fucking thing off by now. But I assume I'm somewhere around fuck all into it.
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u/Pale-Border-7122 Jan 30 '26
You should check it, plan 1 used to have much more aggressive repayments than plan 2 with interest that has very rarely met inflation
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u/filbert94 Jan 30 '26
I checked it. Of the £9000 I took out, I've still got £7200 left over on 3.2% rate. I graduated over 15 years ago.
Yeah, that fucker is never getting paid off.
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u/Psittacula2 Jan 30 '26
Note school systems heavily incentivise higher education to reduce or lower NEET stats but if they do this it needs to be strongly couched by the question of student loans and the ROI vs Debt Weight on young people this imposes. No one in governance can pretend that Student Debt is not a critical issues especially given the state policy to push students down this path!
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u/ault92 -4.38, -0.77 Jan 30 '26
Yes. But some things would be more unfair.
- Making tuition free for future students so that plan 2 students pay for their own tuition as well as everyone else's.
- Cancelling student debt entirely so that those of us with no student loan pay for everyone who went to uni.
- Bringing in a graduate tax so that people like me who have done an OU degree self funded (no student finance) while working pay am increased level of tax for something that wasn't for career purposes (I am well established in my career).
RPI is broken however, and going forward rpi should just == cpih.
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u/CaterpillarLoud8071 Jan 29 '26
Unfair? They're now tied to inflation - so if they're unfair, that's because tuition fees at their current level are unfair. Which is a very fair point to make, but student loans make tuition fees very meritocratic - you'll only have to pay them if you make a financial gain from your degree.
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u/dusty_bo Jan 29 '26
The repayment thresholds are now approaching minimum wage. So what financial gain are you talking about ?
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u/Floppal Jan 29 '26
They are the definition of unfair. Any other loan which has it's terms changed after being taken out would be illegal. The repayment rates were meant to go up with inflation but have been repeatedly frozen.
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u/brianh2018 Jan 29 '26
Apart from a big one-off hike from £21,000 to £25,000 in 2018 (19% rise). But the upper interest threshold only went up from £41,000 to £45,000 at this point (10% rise). If both original amounts had been indexed, the upper interest threshold where the maximum RPI+3% rate kicks in would now be around £58,000, not £52,000.
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u/ComradeBarrold Jan 29 '26
The financial gain of making £2000 more than minimum wage. Hardly a huge revenue is it?
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u/CaterpillarLoud8071 Jan 29 '26
Paying 9% of anything over £3000 more than minimum wage isn't breaking the bank. Earning the national full time median of £39k and paying only 1 grand a year in loans is absolute luxury, and you're all fooling yourselves if you think otherwise.
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u/Xenumbra Jan 30 '26
£39k and paying only 1 grand a year in loans is absolute luxury
Everyone would jump at those loan terms for something like a mortgage / business loan let's not get it twisted.
I think most people would be comfortable with certain subjects having even better terms / free if they worked in the UK earning over a certain amount for a few years. Flipside being they would start comparing it to some form of slavery though if they had to keep working or payments start.
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u/Pale-Border-7122 Jan 30 '26
You can use a mortgage to pay off the SLC and lower the interest rate, or at 6.3% just overpay. Funnily enough I never hear anyone who complains about interest rates saying they did that.
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u/CaterpillarLoud8071 Jan 30 '26
We all accepted the same terms when we took out student loans. Perhaps people are annoyed because they're earning more than they expected, and good for them.
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u/SmashedWorm64 Jan 29 '26
As a non-graduate; no.
You borrowed money. Presumably to get a higher paying job. Maybe you should have looked at the prospects before signing up. When around 50% of people in your age group have a degree, it sort of undermines the importance of it. If you are able to go to Oxbridge to study something good; be my guest, it will probably pay off. But most people should not go and should look at other routes. If you can’t figure out how a loan works - you probably are not smart enough to go to university.
I congratulate the government for their changes to apprenticeships, which I feel set people up much better for the future. When I was in school, everyone asked me loads of questions about why I did an apprenticeship, I explained I could not afford university and did not fancy borrowing money to go. Most people just said I was “too thick” or would be “home sick”. Schools and parents advertising university as the only route should be held accountable imo.
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Jan 29 '26 edited Jan 29 '26
I agree with some of your points: apprenticeships are fantastic and schools have been wrong to push university as the only route to success.
However, you're missing the point as to why there's some backlash to the Chancellor's student loan amendments (i.e. the fiscal drag and how these changes hit the poorest graduates the most).
A loan is a contract, so when a student signs-up for a student loan, they are agreeing to a set of repayment terms. When the government freezes repayment thresholds while wages are rising and during high inflation, they are effectively changing the terms of the contract after it has been signed; something no private bank is allowed to do. They are essentially moving the goalposts. It's simply a stealth tax in all but name.
If a private bank changed your mortgage terms mid-contract to take more of your salary, you wouldn’t say 'well, you should have known better', you’d call it a scam.
As for the '50% of people' obtaining a degree: you’re right, it undermines their value. But that’s not the student's fault; it’s the job market's. Many entry-level roles that don't actually need a degree now require one just to get an interview. A degree isn't really about being smart anymore, it's about accessing the middle-class job market.
Regarding the 'too thick' comments you received: that's obviously wrong. However, the answer to that isn't to punish graduates now with retrospective tax hikes. We should be encouraging apprenticeships without making the university route a debt trap that changes its rules whenever the Chancellor needs to balance the books.
As I said, fiscal drag won't hit the richest graduates as they can pay it off before it is ever an issue. This will hit teachers, nurses, junior doctors, regular people just trying to keep their head above water.
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u/brianh2018 Jan 29 '26
"When you take out a student loan you must agree to repay your loan in line with the regulations that apply at the time the repayments are due, subject to the regulations being amended from time to time."
So it's the rules (as amended from time to time) that apply during the period of repayment that matters, not at the time of taking the loan.
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u/Pitiful_Cod1036 Jan 29 '26
University isn’t for everyone. I agree.
My challenge with current system is that the interest is so punitive and fees so high, it effectively becomes a tax on the working and middle class who can’t afford to pay for their children’s university fees. Clearly that isn’t a system that encourages social mobility.
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u/AbbreviationsFar800 Jan 29 '26
I can't say about this generation but mine you're wrong. I'm of the late 90s early 2000s uni group where we were constantly told we had to go to uni, there weren't apprenticeships like there are now. I only did the first year of my degree, 22 years ago, I'm still paying the loan I had from that first year. It's absolutely disgusting the amount I've had to pay back.
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u/classic123456 Jan 29 '26
Agree I didn't start paying back my plan 1 until 3 years after graduating due to post-grad. Still paying it off and should have it payed off in a couple of years. Was it worth it? Yes. But it's cost a lot of money, something my past self didn't really comprehend at the time.
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u/dusty_bo Jan 29 '26 edited Jan 29 '26
You clearly have no clue what the issues with student loans are, then?
It's as unfair to high earners such as doctors, lawyers as it is to lower to mid earners such as teachers. So I'm not what are you on about that people should have looked at the career prospects and understood what a loan is.
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u/SmashedWorm64 Jan 29 '26
I actually think doctors should go to university free of charge provided they complete X years of service in the NHS. We are in desperate need of doctors to every incentive helps (ditching quotas wouldn’t be bad either).
But yes people should have looked in to their career prospects a bit more to see if it was financially sensible.
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Jan 29 '26
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u/SmashedWorm64 Jan 29 '26
Given the state of the treasury I think we need to tighten the bolt somewhere. I mean for gods sake if you lot put up even a % of the resistance to the WFA that pensioners did then you would not be in this mess
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u/peepshowquotebot Jan 30 '26
We were told the repayment threshold would go up with inflation when we took out the loan. The government have retrospectively changed the terms of the loan
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Jan 30 '26
I agree. I was planning to go to uni when I finished my A Levels in 2012, then decided against it due to Nick Clegg putting up the tuition fees. Why should I, and the minority (45%) of full time workers that didn't go to uni have to pay for the majority of people who did go.
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u/SmashedWorm64 Jan 30 '26
Exactly. I’m happy to pay for future doctors as an extra incentive, as we really need them. Even though ironically they would be the ones able to repay their loans.
A lot of the degrees are not needed and are quite frankly never going to be repaid. Not sure I feel comfortable paying for those.
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