Fix the broken student finance system

Student debt is damaging the life chances of younger and future generations.

Older generations were able to access higher education either for free, or at far lower cost. Today, graduates leave university with average debts of more than £50,000 for the same opportunity.

Over the last 15 years, university has become increasingly expensive. Tuition fees were tripled. High interest rates on Plan 2 loans mean many graduates see their debts continue to rise even after repaying thousands of pounds.

The shift to Plan 5 has increased the burden again, especially for lower and average earning graduates. The repayment term has been extended from 30 to 40 years, meaning many graduates will still be repaying their loans into their 60s.

A Treasury Select Committee has since stated that the advertising of student loans has “amounted to mis-selling”. Retrospective changes to loan terms have been a betrayal of the original agreement between graduates and the state.

Graduates are now being asked to repay more, earlier in life. This makes it harder to save for a deposit, start a family, build financial security or contribute properly to a pension.

This reflects a deeper failure: the withdrawal of public investment from higher education. Student finance was meant to share costs between graduates and taxpayers. Instead, successive governments have shifted more of the burden onto individuals. The Exchequer is even expected to profit from loans given to certain cohorts.

This is a fundamental question of fairness between generations. The government must restore public investment in higher education, reduce the burden of student debt, and build a student finance system that gives younger generations a fair start.