Back in Spring, ex-chancellor Rachel Reeves admitted that the student loan system was “broken” – but said that fixing it was not at the “front of the queue” in terms of her political priorities.
At the time, I thought the statement was fairly obvious to anyone with a loan – specifically those repaying under Plan 2.
This was taken out by those who went to university between 2012 and 2022 and has come under much scrutiny in recent months.
Reeves had only recently frozen the threshold at which graduates start paying their loans back – as her predecessors had done – to make borrowers pay back more in loans than they thought they would.
Though Reeves’ statement didn’t shock me, I still found it galling to hear – and thousands of graduates will have done as well.
“Yes you’ve been wronged, no we won’t do anything about it” is a bit of a kick in the teeth.
When Keir Starmer’s administration toppled this summer, the mood music coming from the new Prime Minister Andy Burnham and his team seemed to shift.
Plans to increase the salary threshold were being explored, Burnham’s team briefed, and it finally looked like after years of being ignored by successive administrations, graduates might finally get some justice.
The terms of the loans Plan 2 borrowers took out were already harsh to begin with – high interest rates and large amounts of borrowing mean many will be forced to pay thousands of pounds a year towards them until they are wiped in their 50s.
They’ve also been worsened every time the Treasury has needed quick cash, with Reeves’s latest freeze to the repayment threshold the most recent example.
When vying for power, Burnham was happy to flirt with the idea of improving the system, but when push comes to shove, it looks like he’s bottled it.
Reports suggest there will be no help for graduates in the Budget later this month.
Perhaps we shouldn’t have been so naive to assume that this time, things might be different.
It felt like after a scathing report by the Treasury Committee – a cross-party group of lawmakers – said that the student loan system was “broken and unfair” this summer, the moment for a change of course might be coming.
Now it looks like another false dawn.
What will be more interesting is whether this decision has political repercussions for Burnham and his administration.
Polling commissioned by student loan campaign group Rethink Repayment reveals that 65 per cent of UK adults now believe the student loan system needs reform, including 72 per cent of those who voted Labour at the 2024 general election.
If those people vote with their feet at the ballot box in three years’ time, Burnham could yet come to regret his choice.
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