A parliamentary inquiry into England’s student loan system has commenced, coinciding with new research indicating a significant erosion of public confidence in the value of a university degree. The Treasury Select Committee of MPs began hearing evidence on Tuesday, as a separate survey revealed that over a third of the population now believes higher education is not worth the associated time and money, marking a two-decade peak in skepticism.
Public Perception Shift Underscores Unease
The British Social Attitudes survey, a long-running tracker of public opinion, published findings on Tuesday that underscore this growing unease. In 2025, 34% of respondents agreed that a university education ‘just isn’t worth the amount of time and money,’ a substantial increase from just 14% in 2005. This represents the highest level of concern recorded in 20 years. Concurrently, the proportion of people who believe going to university leaves graduates ‘a lot better off’ in the long run has declined sharply, falling from 50% in 2005 to 36% in 2025, reflecting a broader re-evaluation of higher education’s financial returns.
Inquiry Addresses Graduate Debt Concerns
Against this backdrop of widespread public skepticism, the parliamentary inquiry is set to address the specific grievances of graduates burdened by student debt. MPs will scrutinize the size of these debts and the prevailing interest rates. The National Union of Students (NUS) has already called for the inquiry to focus on the graduate earnings repayment threshold and the interest rates applied to loans. Particular concern has been voiced by graduates who took out Plan 2 loans between 2012 and 2023, a cohort now facing significant financial pressures.
The Personal Impact: Gemma’s Financial Burden
The lived experience of these financial pressures is exemplified by individuals like Gemma, a 33-year-old working for a tech company. Graduating in 2016 with a debt of £34,105, her latest balance statement shows an increase to £41,908. This escalation is due to interest accumulating faster than her repayments, a common frustration for many. Despite earning just under £50,000 a year, Gemma describes living with the loan as ‘draining,’ stating, ‘It feels like I’m constantly chasing a debt that gets bigger over time; it feels like climbing a mountain.’ While acknowledging her degree was instrumental in her career progression from a low-income background, the debt has had tangible life consequences, contributing to her decision to delay starting a family with her partner, as interest would continue to accrue during maternity leave.
System Mechanics and Criticisms
The current student loan system in England mandates graduates repay 9% of whatever they earn over a specific threshold. This threshold is slated to be frozen at £29,385 from April 2027 for a period of three years, a policy expected to compel more graduates to commence repayments earlier. The NUS is urging the government to reconsider this freeze, while the graduate campaign group Rethink Repayment argues that the decision contravenes the original terms of the student loans. Alex Stanley from the NUS emphasized the need for a long-term ‘course correction’ to prevent a generation from being unable to achieve milestones such as homeownership or starting a family. The scale of graduate frustration is evident, with over 50,000 individuals having submitted written evidence to MPs, many citing a lack of understanding regarding their loan terms at the time of signing up.
Government Defense and Broader Economic Debate
Despite the mounting concerns, the government maintains that the current student loan system is designed to protect lower-earning graduates, with repayments directly linked to earnings and any unpaid loans written off after 30 years, effectively by the taxpayer. In a statement, the government acknowledged graduate concerns about repayment costs, stating it had raised the graduate repayment threshold for the first time since 2021 and reintroduced targeted maintenance loans. Furthermore, it has capped the interest rate on Plan 2 loans at 6%. Vivienne Stern MBE, Chief Executive of Universities UK, conceded that the labour market presents challenges but asserted that data consistently shows graduates ‘are more likely to have a job, earn more and have better health.’ She underscored the broader societal benefits of higher education, adding, ‘If we want our country to grow, we need more graduates entering the labour market.’
The ongoing parliamentary inquiry thus navigates a complex landscape where individual financial burdens intersect with national economic aspirations and shifting public perceptions. As MPs delve into the intricacies of student loan terms and their real-world impact, the debate continues over how best to balance access to higher education with its long-term affordability and perceived value for both graduates and the wider economy.
