The Commons Treasury select committee heard on Tuesday from seven experts who described debt-ridden graduates as being treated like 'cash cows' to fund older people's lifestyles. The evidence session focused on the ballooning student loan scandal.
Experts Testify on Student Loan System
Ollie Gardner, founder of Rethink Repayment, a graduate-led campaign for a fairer system, told MPs the current situation amounts to an intergenerational crisis. He said: 'To see Rachel Reeves or previous governments freezing the thresholds makes it feel a lot like we’re being used as cash cows.' He added: 'To see graduates being the mechanism to generate more tax revenue … I think lots of people feel very, very angry about that.'
Philip Augar, who led the 2019 review of England’s higher education funding, expressed shared outrage, stating: 'The plan 2 people signed up for terms and conditions that were not properly explained.' He argued that a financial services organisation has a duty of customer care, and that should apply to government in the context of these loans.
Moral Issues and Retrospective Changes
Augar highlighted a moral issue, saying: 'You shouldn’t be retrospectively changing the terms in quite a complicated, almost sneaky way, bit by bit.' When asked if the Financial Conduct Authority would intervene if a bank sold a financial product in this manner, Augar replied: 'I’m thinking immediately of the car loans scheme or the payment protection insurance scandal, which produced exactly the outcome you’ve described, yes.'
Government Response
A Labour Party government spokesperson said: 'We inherited the current system and have taken steps to make it fairer, including raising the repayment threshold for the first time since 2021 and capping maximum interest rates this year to protect graduates from rising costs.' The spokesperson also noted that the government has reintroduced targeted maintenance grants, adding that the system protects lower-earning graduates.
