A recent inquiry into England’s student loan system has stirred significant debate regarding the value of higher education. As concerns escalate, new research reveals that a third of the population now believes a university degree is not worth the investment, marking the highest level of scepticism in two decades. This inquiry, undertaken by MPs, seeks to address pressing issues raised by student organisations and educational experts, particularly focusing on the repayment threshold and interest rates tied to student loans.
Public Sentiment Shifts
According to the latest British Social Attitudes survey, 34% of respondents in 2025 expressed the view that pursuing a university education “just isn’t worth the amount of time and money.” This figure has seen a dramatic rise from just 14% in 2005, highlighting a growing public disillusionment with the return on investment of university degrees. Additionally, confidence among the public that a degree significantly enhances long-term financial prospects has also declined, from 50% in 2005 to 36% in 2025.
This shift in sentiment occurs alongside an inquiry by the Treasury Select Committee, which aims to gather insights on the financial burdens faced by graduates, particularly those who secured loans under the Plan 2 scheme between 2012 and 2023.
The Burden of Debt
Many graduates are voicing their concerns about the increasing weight of their student debt. One such individual, Gemma, who graduated in 2016, initially incurred a debt of £34,105. However, due to accumulating interest, her current balance has ballooned to £41,908—far exceeding her original loan amount. While Gemma acknowledges that her degree facilitated her entry into a well-paying job in the tech sector, earning nearly £50,000 annually, she describes the ongoing financial pressure as “draining.”
“It feels like I’m constantly chasing a debt that gets bigger over time; it feels like climbing a mountain,” she remarked. The stress of her student loans has even influenced personal decisions, such as delaying starting a family, as she worries about the financial implications of maternity leave.
Calls for Change
The National Union of Students (NUS) is advocating for a reassessment of the repayment threshold, currently set to remain frozen at £29,385 from April 2027 for three years. This freeze could result in more graduates beginning to repay their loans earlier than anticipated. The NUS argues that this action contradicts the original terms of the student loan scheme, prompting calls for a “course correction” to prevent a generation from being unable to achieve milestones such as home ownership or starting a family.
Vivienne Stern MBE, Chief Executive of Universities UK, acknowledged that while the job market poses challenges, graduates still tend to have better employment rates and health outcomes. She emphasised that a robust university education is vital for the country’s economic growth, stating, “If we want our country to grow, we need more graduates entering the labour market.”
Addressing Psychological Burdens
During the inquiry, Sir Philip Augar, who previously chaired a review of post-18 education in England, expressed the need for reform concerning Plan 2 loans. He highlighted the moral obligation of the government to maintain consistent loan terms, stating that changes made in a piecemeal fashion over different administrations have resulted in the current predicament.
Stern and other panellists advocated for a more transparent repayment system, suggesting that the focus should shift from the total debt amount to the monthly repayments graduates are making. This approach could alleviate some of the psychological burdens associated with high debt figures.
Alex Stanley from the NUS reiterated the urgency of reversing the frozen repayment thresholds, which he claims are contributing to significant challenges for young people today. He stressed that many graduates are grappling with discussions about pensions and mortgages while still burdened by their student loans.
Government’s Position
Despite the rising concerns, the government has defended its decision to freeze the repayment threshold, which they have capped at an interest rate of 6% for Plan 2 loans. In a statement, officials acknowledged the importance of the issue and noted that they had previously increased the repayment threshold and introduced targeted maintenance loans to alleviate some financial pressures on graduates.
Why it Matters
The ongoing inquiry and the rising public scepticism around the value of a university education underline a crucial crossroads for higher education in England. As graduates express growing discontent with their financial obligations, there is a pressing need for policymakers to address the imbalances in the student loan system. The implications of these discussions extend beyond individual financial struggles; they could also shape the future landscape of educational attainment, workforce participation, and economic stability in the UK. If left unaddressed, the current disillusionment may hinder a generation’s ability to contribute meaningfully to both the economy and society.
