A survey by market research firm YouGov found that 44 per cent of respondents back student loan write-offs. Of those, 36 per cent believe loans should be forgiven entirely, while 35 per cent support partial forgiveness. A further 25 per cent said repayments should be capped so graduates do not pay back more than they originally borrowed.
The findings come amid mounting criticism from MPs and campaigners, who have warned that the student loan system risks becoming a “mis-selling scandal waiting to unfold”.
A recent Sunday Times Money investigation revealed that £15.2 billion in interest was added to student loan balances last year, while graduates repaid just £5 billion, fuelling concerns that many borrowers may never clear their debts.
YouGov polled 2,024 adults across Britain last Thursday and Friday.
Tuition fees have risen sharply over the past decade. In 2012, under David Cameron’s coalition government, annual university fees in England nearly tripled from £3,375 to £9,000. Today, students can be charged up to £9,535 a year for standard full-time courses, excluding accommodation and living costs.
The poll found that 68 per cent of respondents believe £9,000 a year is too high for tuition fees.
A ‘graduate tax’ in all but name
Student loans are often described as a graduate tax, but the cost of a degree varies significantly depending on when and how graduates studied.
Graduates on Plan 2 loans , those who entered university between 2012 and July 2023 are among the worst affected by interest charges. They repay 9 per cent of their income above a threshold ranging from £25,000 to £28,470, depending on their cohort. Nearly 63 per cent of those surveyed said this repayment rate takes too large a share of income.
Interest on Plan 2 loans begins accumulating as soon as the loan is taken out, charged at the retail prices index (RPI) plus 3 percentage points. After graduation, interest continues at RPI plus up to 3 per cent, depending on earnings. The RPI inflation rate stood at 4.2 per cent in the year to December.
Overall, 76 per cent of respondents said interest rates of 6 per cent or more were too high.
By contrast, students on Plan 1 loans or Plan 5 loans introduced for those starting courses after July 2023 — pay interest at the RPI rate only, regardless of income. Plan 5 borrowers also face a longer 40-year repayment period. More than half (53 per cent) of those polled said interest rates across all loan plans should be standardised.
Calls for reform have reached Westminster. Labour MP Luke Charters recently introduced a Student Finance (Review of Payment Schedules) Bill under the Ten Minute Rule, urging a review of repayment terms.
He argued that many teenagers are not properly informed about the long-term implications of student loans, warning that the system “feels like a mis-selling scandal waiting to unfold”.
