Rachel Reeves claims the student loans system in England is fair - but here are 10 reasons why students are facing growing debt and inequality.
1) The poorest students take on the most student debt
The average student loan upon graduation in England is now £53,000 - and students from poorer background on average take out more of a loan to fund their tuition fees and living costs.
2) Graduates in essential, lower-paid jobs pay back more debt
Teachers, nurses and social workers face paying back more of their student loan than their higher-paid peers, even if their jobs do not benefit society.
3) The parental earnings threshold has been frozen for almost two decades
The parental earnings threshold, which determines how much student maintenance loan you get based on your parents' income, has been frozen at £25,000 since 2008. For perspective, some freshers going to university this September will have been born in 2008.
4) The loan repayment threshold is frozen until 2030
The loan repayment threshold, which is the salary point at which you start paying back your loan, will not rise for at least four years, meaning as average wages and inflation rise, more graduates will start paying back their loan earlier.
5) Interest rates make it impossible to reduce your student debt
High interest rates on student loans mean that for most graduates, their debt grows faster than they pay it off. In fact, analysis shows that you have to earn on average a salary of £66,000 before your repayments are bigger than interest accrued on your loan.
6) Students who started in 2023 will pay back their student loan for even longer
Students on Plan 5 loans that came in in three years ago will be paying back their loans for 10 years longer than graduates on Plan 2 loans, after the government increased the repayment window from 30 to 40 years.
7) Maintenance loans have failed to rise with inflation
During the cost of living crisis, student maintenance loans for students in England have not risen anywhere near the value of inflation. So which rent, bills and food prices have rocketed, the value of students' spending money has lagged behind.
8) Families are being hit hard
A recent NUS survey found that 86% of parents support their child financially through university because of the inadequacy of maintenance loans, which 84% of families who help out are struggling because of it.
9) International students cannot get student loans
Students studying in England from abroad cannot access Student Finance England, despite the fact that their higher fees cross-subsidise the entire higher education system.
10) Education should be a public good
Our universities should be places that help reduce inequality, but the student loans system is regressive and actually makes inequality worse by leaving the poorest students and graduates in most debt.
What you can do to improve the situation
Check out my video on Instagram explaining why the student loans system is not fair, and tag your MP in the comments - and sign our petition for a fair deal for young people - it has just passed 10,000 signatures!
