Student Loan Inquiry Begins as Public Trust in UK University Degrees Declines
A parliamentary inquiry into the student loan system in England has begun, with evidence presented by student organisations and sector experts. This initiative coincides with a marked decline in public confidence regarding the value of a university education.
Public Scepticism Grows Over Degree Value
New findings from the British Social Attitudes survey reveal that 34% of people in 2025 believe a university degree 'just isn't worth the amount of time and money,' a significant increase from 14% in 2005. This represents the highest level of scepticism in two decades. Concurrently, the proportion of individuals who think a university education leaves graduates 'a lot better off' in the long run has fallen from 50% in 2005 to 36% in 2025.
Treasury Committee Examines Graduate Concerns
The Treasury Select Committee is currently hearing testimony from graduates on the impact of their loan debts and interest rates. Many individuals, particularly those with 'Plan 2' loans issued between 2012 and 2023, report feeling trapped in a cycle of accumulating debt despite making repayments. One graduate, Gemma, detailed her experience of her initial £34,105 debt growing to £41,908, with interest charges outpacing her contributions. She stated that while her degree facilitated her career progression, the constant burden of the loan is 'draining' and has influenced her decision to delay starting a family.
Over 50,000 written submissions have been received by MPs, with many graduates alleging they did not fully comprehend the terms of their loans upon signing. Graduates in England repay 9% of earnings above a threshold, which is set to be frozen at £29,385 from April 2027 for three years, a move expected to accelerate repayments for more individuals. The National Union of Students (NUS) and campaign group Rethink Repayment are advocating for the reversal of this freeze, arguing it contravenes the original loan terms.
Calls for Systemic Reform
Alex Stanley of the NUS warned that without a 'course correction,' an entire generation could face difficulties in homeownership and family formation. Sir Philip Augar, who chaired the 2019 review of post-18 education, told the inquiry there is a 'moral responsibility' for the government not to retrospectively alter loan terms through 'complicated, almost sneaky' adjustments. Vivienne Stern MBE, Chief Executive of Universities UK, emphasised the need for a fair and transparent student loan system, arguing for a better balance of responsibility between the state and the individual, framing education as a state investment. Both Augar and Stern called for clearer presentation of monthly repayment figures on loan statements to mitigate the psychological burden of the total debt.
The government maintains that the current loan system safeguards lower-earning graduates through income-linked repayments and loan write-offs after a set term. It has defended the decision to freeze the repayment threshold and capped the interest rate on Plan 2 loans at 6%, acknowledging graduate concerns about repayment costs.
