Graduates Rally for Student Loan System Overhaul
Former university students across the country are intensifying their demands for government reforms to the student loan repayment system, citing what many describe as 'criminal' interest rates. The movement has gained momentum following recent budgetary decisions that have left graduates facing significant financial burdens.
Repayment Thresholds Frozen Until 2030
In the Autumn Budget, Chancellor Rachel Reeves announced that thresholds for student loan repayments would remain frozen at £29,395 for three years starting from April 2027. This decision means that graduates earning above this amount will continue to pay nine percent of their income toward loan repayments, while those with post-graduate qualifications face even higher rates of fifteen percent or more, depending on whether they completed a Masters or PhD.
Conor Boyle, who studied at Oxford University from 2021 to 2024, expressed his frustration to GB News, stating that the interest accumulating on student loans is 'criminal.' His sentiment echoes widespread concerns among graduates who feel trapped by escalating debt.
Former Minister Criticizes Current System
Michelle Donelan, who served as Universities Minister during the pandemic, has been vocal about the system's failures. 'The student loan repayment system isn’t working,' she asserted. 'I abolished real interest rates for new borrowers under Plan 5 so graduates don’t repay more than they borrowed in real terms. However, Plan 2 graduates are still being hit with interest rates exceeding six percent—higher than many mortgages.'
Donelan highlighted additional issues, noting that many graduates will be repaying loans into retirement because their degrees have not led to graduate-level employment. 'In other words, they are being ripped off,' she added. 'We need to face facts: many Level 4+ apprenticeships lead to stronger earnings than some degrees. I worked with universities and businesses to expand degree apprenticeships because a traditional degree isn’t the answer to every career—and pushing it as the default is letting young people down.'
Labour's Promises and Current Realities
Despite Labour's campaign promises to reduce graduate payments, the reality has been starkly different. 'Yet surprise, surprise, fees are up, thresholds are frozen, and graduates are paying more,' Donelan remarked. This discrepancy has fueled further discontent among borrowers.
According to data from the House of Commons Library covering 2024 to 2025, over £15 billion was added in interest to England’s student loans, with only £5 billion being repaid. This staggering imbalance underscores the urgency of the situation and the need for comprehensive reform.
The growing outcry from graduates signals a critical moment for policymakers to address the student loan crisis, with many calling for immediate action to alleviate the financial strain on former students and ensure fairer repayment terms for future generations.
