There are certain numbers you expect to see on your payslip: tax; national insurance; hopefully a pension contribution. Recently, I noticed another. It’s larger than I expected, persistent and quietly compounding: my student loan repayment. I’ve seen it before, of course, but studying it to write this column was a jolt.
Not because I didn’t know it existed, but because of what it represents: a system that increasingly feels less like a graduate contribution and more like a long-term penalty for succeeding. After I retrained as a teacher six years ago, my starting salary was so paltry that I once barely noticed it. But it has increased significantly since, and I am now doing reasonably well.
Over the weekend, ahead of this week’s opening up of the 2026 online loan application system, a fresh wave of headlines highlighted the issue. Graduates leave university with eye-watering levels of debt – over three million owe more than £50,000, and some over £100,000. Repayments stretch ever further into working life. The realisation dawns that the more you earn, the more punitive the system is. And for the first time this year that has led to some of my sixth-form pupils questioning openly whether it is actually worth that effort and financial pain.
This is not how it was sold. That current “Plan 2” system, introduced in 2012, was framed as progressive. In theory, you would only repay once you earned significantly. Payments would be manageable and any remaining balance eventually be written off. In practice, something quite different has happened. The threshold at which repayments begin will rise from £28,470 to £29,385 in April, and will then be frozen for three years rather than rising with inflation. Wages, meanwhile, have risen slowly.
The result is predictable: more people are dragged into repayment earlier, and they pay more over time, because they are simply earning a decent living. By 2030, graduates will be repaying an extra £250 a year on average. That’s where the system looks flawed: it does not penalise excess, but effort.
There is a strangely British moral undertone in the debate around student loans, as if higher earners should simply accept their lot; that building a career, increasing your salary and contributing more in tax already is somehow justification for paying significantly more for the same degree as someone else.
But earning more is not a crime. It is instead the very thing we encourage. Work hard. Get ahead. Be productive. Pay your way. Yet, under this system, two graduates with identical degrees can end up repaying vastly different amounts, simply because one has been more successful in the labour market. And not slightly more: in some cases, it’s tens of thousands of pounds more over a lifetime. For my twenty-something daughters’ generation, how is that “fair”?
For some, the only help available may be family support: the Bank of Mum or Dad clearing balances or subsidising repayments. That only deepens the divide, as only a minority has that safety net. The majority must negotiate a system that increasingly resembles a graduate tax in all but name. It’s not sustainable. A system that discourages aspiration, relies on parental wealth to smooth its edges and quietly increases the burden through frozen thresholds is not fair.
The Government should unfreeze the thresholds and restore some balance. Because we cannot keep telling people to get ahead, and then penalising them when they do.
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