Like most students, 23-year-old Lauren didn’t bat an eyelid when it came to taking out a student loan. “I had no idea what I wanted out of life when I left school at 18. Uni was the right choice for me, rather than starting a career I wasn’t passionate about,” she says. Lauren graduated with a Bachelor of Arts degree in Linguistics with Spanish from the University of York in 2022, before going on to pursue a Masters in Publishing at the University of Derby. Since completing her postgraduate studies in 2023, she’s amassed around £63,000 of student debt.

According to a report published by the BBC in early July, 1.8 million graduates like Lauren are in at least £50,000 of UK student debt, with more than 61,000 owing over £100,000. It’s unsurprising so many graduates have racked up such eye-watering sums: with interest rates sitting at about eight per cent for anyone who started university between 2012 and 2022, trying to pay off a student loan is akin to attempting to run a bath with the plug out.

“I want to go into publishing and it doesn’t pay amazingly well, so it’s unlikely I’ll ever pay it all back,” Lauren adds. Again, she is no anomaly: less than half of graduates who took out loans before August 2023 will ever pay their loans back in full.

Similarly, 22-year-old Murthaza, who is currently studying for a Masters degree in Journalism at Cardiff University, has amassed nearly £80,000 of student debt. “At the moment it feels like this thing that’s going on in the background for me, because right now I’m not earning nearly enough to repay anything,” he tells Dazed. But he adds that he is worried about the future. “The concern for me is the fact that it’s just sitting there gaining interest.” 

Like Lauren, Murthaza suspects his loan will have to be written off in 30 years’ time. “Journalism is not a field that necessarily pays the best,” he says. “Sure, it’s not the worst, but there’s not much chance I’ll be paying off my loan any time soon.” Notably, as arts graduates, Lauren and Murthaza are much less likely to be able to pay off their loans than science graduates.

“Student debt has become completely unsustainable, with thousands of graduates burdened and unlikely ever to be able to repay it,” explains Alex Stanley, NUS UK Vice President of Higher Education. “We need our new government to recognise education’s true value, and start seeing students as an investment in the future of our country.”

When tuition fees were first introduced under New Labour in 1998, Tony Blair argued that he was merely asking students to make “a fair contribution to the cost [of their education] but only after graduation, through the tax system, on the basis of ability to pay.” But just 19 years later, Andrew Adonis, one of Blair’s ex-advisors who had originally pushed for the introduction of fees, wrote in the Guardian that fees had “become so politically diseased that they should be abolished entirely.” So how did things go so wrong?

In 2012, Conservative ministers tripled the tuition fee cap to £9,250 a year, charged for virtually every course. The Liberal Democrats, in coalition with the Tories at the time, agreed to the change despite pledging to abolish tuition fees as part of their 2010 election campaign. Student loan terms were also made less favourable, with higher interest rates and the loan wiped 30 years after graduation, an increase from the original 25. And thanks to Rishi Sunak, anyone who has begun or will begin studying after 2023 will now only have their loan cancelled if not repaid 40 years after graduation – effectively imposing a “lifelong graduate tax” on university leavers.

Student loan repayments are often understood as a form of tax, as graduates only begin to repay their loan after their income surpasses the repayment threshold. This seems fair in theory, especially as graduates stand to financially benefit from being highly educated; for a long time, most students could look forward to enjoying significantly higher wages than their non-graduate peers (known as “the graduate premium”).

“The current system is a form of intergenerational unfairness where younger generations are being overtaxed for an education that older generations received for free” – Liz Emerson, CEO of the Intergenerational Foundation

But while graduates born in 1970 earned 19 per cent more than non-graduates by the age of 26, by 1990, this had fallen to just 11 per cent. The graduate premium is continuing to erode as the number of graduates in the workforce grows: at present, there are more university-educated workers in Britain than there are graduate jobs and more than a third of graduates in Britain are working in jobs that do not require a degree. Lauren, despite achieving a relevant qualification, has struggled to find a graduate role in the publishing industry and is currently working as an administrator. “When I spoke with a careers advisor she said that I wasn’t having any luck with finding publishing jobs because I didn’t have admin experience, even though my MA did have a skills module which taught us how to use things like Excel,” she explains.

“We already have a progressive tax system in which the more we earn the more we pay,” says Liz Emerson, CEO of the Intergenerational Foundation. “The current system is a form of intergenerational unfairness where younger generations are being overtaxed for an education that older generations received for free.” While graduates are only expected to start paying back their loans once they earn above the current threshold (£27,295 for those who started university between 2012 and 2022, or £21,000 for postgraduate loans), Emerson explains that “previous governments have used fiscal drag – keeping the current rate or even reducing it for the latest intake – to pull more, poorer graduates into repayment.”

The current system hinders the economic mobility of poorer students. “We know that students from working class backgrounds are the most debt averse, so student loans [...] discourage working class students from attending university,” says Stanley. “This creates a two-tier system in which wealthy students can afford to go to university and working class students cannot, no matter how much they might thrive there.” He adds that the current system “penalises poor students who take out higher maintenance loans” and are subsequently saddled with even more debt.

We should also consider the issue of student debt in context. In recent years, rents have reached record highs, making saving for a deposit a Sisyphean feat. Relatedly, around 28 per cent of 20- to 34-year olds still live with their parents. The cost of living has soared, with over half of young people reporting feeling concerned that they will never be financially secure. With all this in mind, it smacks of injustice that so many young people are so encumbered by the millstone of student debt.

“The alarming trend in student debt emphasises the urgent need to reassess the student loan system,” Stanley says. Despite pledging to abolish tuition fees in 2020, disappointingly, Keir Starmer has since U-turned on this promise – but there’s still hope that some incremental positive changes could be on the horizon. “The new government has promised to offer students and graduates a fairer settlement, and that must include lowering their repayment rates during a cost-of-living crisis,” Emerson says. She stresses that above all, change is imperative. “Younger generations have to borrow so much to gain a degree when anyone over 55 years of age got a degree for free and the government even paid towards their living costs. That is an intergenerational injustice.”