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A parliamentary inquiry into the student loan system in England is set to commence on Tuesday, focusing on testimonies from student groups and subject-matter experts. The National Union of Students (NUS) has urged the investigation to scrutinize aspects such as the repayment threshold for graduate earnings and the applicable interest rates on loans. However, government representatives maintain that the existing framework offers protection for lower-earning graduates, with repayments proportionate to income and outstanding debts written off after their designated term.
Separate research sheds light on shifting public perceptions regarding higher education’s value. According to the British Social Attitudes survey, which has monitored opinions on education and other major topics for many years, dissatisfaction with the worth of a university degree has notably increased. In 2025, 34% of respondents agreed that a university education “just isn’t worth the amount of time and money,” a substantial rise from 14% two decades earlier in 2005. This marks the highest recorded level of scepticism about degree value within 20 years. Concurrently, the proportion of people believing that a university qualification leads to significantly better long-term financial outcomes has dropped from 50% in 2005 to 36% in 2025.
Against this backdrop of growing concern, the Treasury Select Committee will listen closely to graduates voicing worries over their debt levels and loan interest rates. Particular attention is expected to be given to borrowers with Plan 2 loans taken out between 2012 and 2023. One such graduate, Gemma, now working in the technology sector, told the BBC she initially owed £34,105 when she completed her degree in 2016. Yet her latest statement shows her loan balance has increased to £41,908, as the interest accrued continues to outpace her repayments. Despite valuing her degree for improving her economic prospects—now earning just under £50,000 annually—Gemma describes managing the debt as emotionally exhausting, likening it to “constantly chasing a debt that gets bigger over time; it feels like climbing a mountain.” At 33, she explained that concerns over the loan influenced her decision to postpone starting a family since interest continues to build even during maternity leave, when repayments are paused.
The issue has mobilized graduates across England, with over 50,000 individuals submitting written evidence to Parliament, many expressing that they did not fully understand the loan terms at the outset. Graduates currently repay 9% of their income above a threshold scheduled to remain frozen at £29,385 from April 2027 through 2030, a move critics argue will push more graduates into repayment earlier than anticipated. The NUS and other campaign groups like Rethink Repayment contend this freeze contradicts the original loan agreements and are calling for a reconsideration of the policy. Alex Stanley, representing the NUS, emphasized the need for a “longer term course correction” to prevent a generation from being disadvantaged in purchasing homes and starting families. Meanwhile, Vivienne Stern MBE, Chief Executive of Universities UK, acknowledged challenges in the labor market but highlighted data showing graduates are generally more likely to be employed, earn higher wages, and enjoy better health outcomes. She stressed, “A university education doesn’t just benefit the individual. If we want our country to grow, we need more graduates entering the labour market.”
The government has defended its policy choices, including freezing the repayment threshold and capping Plan 2 loan interest rates at 6%. A statement acknowledged that while some graduates have concerns regarding repayment costs, the issue is being taken seriously. It also noted steps taken to raise the repayment threshold for the first time since 2021 and the reinstatement of certain targeted maintenance loans
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