Consciousness is dawning. The insanity that is post-2012 student finance – a system that somehow manages to combine the worst aspects of both a loan and a tax, all without properly funding universities – is gradually working its way up the Westminster agenda. Rachel Reeves has even been asked about it. She thinks the system is fair, apparently, arguing that it’s wrong for people who don’t go to university to pay for those who do.
For those of us who have for some time covered this injustice (which students with wealthy parents can dodge entirely by paying up front), the sudden attention is both gratifying and frustrating. Nothing has actually changed since we first started warning about the punitive interest rate graduates were subjected to (at one point, 50 times higher than the Bank of England base rate) and the impact that paying what is essentially an extra tax of 9 per cent has on young people’s prospects. It’s just that those graduates, the oldest of whom are now in their early thirties, finally have enough political capital that they can no longer be dismissed as whiny entitled youngsters who don’t understand economics. It turns out the real dearth of economic understanding was among those in the coalition government who dreamed up the system. Who knew.
I am thankfully a couple of years too old to be among those afflicted by the trebling of tuition fees in 2011 and the interest and repayment rules that make the loans for those fees almost impossible to pay back. As someone who has actually repaid their (much smaller, less interest-inflated) loan, I have no personal stake in the debate about debt forgiveness. In fact, I should be on the other side. To return to the point Reeves made, I’ve paid for my degree; why should I pay for someone else’s?
There are quite a few reasons, actually. As a taxpayer, I pay for all kinds of things that don’t benefit me directly. Schools for children I don’t have. Transport systems in places I’ll never visit. Pensions for people I’ve never met – some of whom have amassed more wealth over past decades than is comprehensible to someone of my generation. The winter fuel allowance. (And no, I don’t expect to receive the same when I reach retirement age, not least because that age is creeping steadily upwards.)
We fund services with taxes because we think those services are public goods, that they benefit society as a whole. The question is not who should pay for a university degree. We should ask instead: does it benefit society that half of young people – the half who did what parents and teachers and politicians told them to and went to university – are saddled by repayments equating to a marginal tax rate for mid-earning graduates almost as high as the top rate in Sweden?
That we are even having this debate is evidence of a double standard in how political discourse treats different generations. Over-65s who failed to plan adequately for their retirement and social care needs garner sympathy. (Just look at the frenzied media support for the Waspi campaign of women who had years to adjust their retirement plans but neglected to check the pension age and now want younger taxpayers to compensate them.) Under-35s, who as teenagers were pressured to sign up for loans even politicians didn’t properly understand, seemingly do not.
There is talk of treating this as a mis-selling scandal – and I understand why. But more important than whether students were able to make an informed choice are the wider societal implications. Stagnant wages and sky-high house prices already make it harder to succeed as a graduate than when Reeves left university. Loan repayments, which begin at a threshold the Chancellor has chosen to freeze, compound the burden.
When financial stability feels out of reach, dreams of starting a business – or a family – get put on hold. Productivity suffers; resentment breeds. Can a country’s economy succeed when its bright young things are weighed down by a misconceived debt-tax their elders breezily avoided? Can its politics?
[Further reading: No one knows what Labour members want]
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This article appears in the 11 Feb 2026 issue of the New Statesman, Labour in free fall
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