‘Patronised and ignored’: How graduates feel let down by Healey’s student-loan snub

Chancellor John Healey announced help with energy bills, an increase to the minimum wage, and an extension to the cut on fuel duty at the Budget last month. But among the groups handed tax cuts and giveaways, one cohort was conspicuously absent. Student loan holders had hoped that under Andy Burnham’s government, they might be given some breathing space of their own. But when Healey sat down last Wednesday, they’d not been mentioned at all. Plan 2 student loans received much attention earlier this year. These were taken out by students in England between September 2012 and July 2023, and were launched at the same as tuition fees were trebled to £9,000 a year. Many feel the loans have been hugely unfair. They come with high interest rates on the borrowing – up to 6 per cent currently – and the terms have changed multiple times since they were issued. The salary threshold at which they are repaid was supposed to be upped every year in line with average earnings, but has been frozen multiple times, currently at £29,385 until 2030. Earlier this year, the cross-party Treasury Committee said the way they were issued “amounted to mis-selling” and there were hints that Burnham’s government could change the terms at Budget. But on 28 October, nothing came – and many feel let down. ‘I thought university was worth it 12 years ago. Now I might consider an apprenticeship’ Ellie Court, 31, is one of them. She graduated in 2017 with a degree in biomedical sciences from the University of Sheffield. She left university with a balance of £43,711 on her loan – £4,344 of which was interest accrued while studying.Over the last eight years she has repaid £6,597, but her loan stands at £55,929. Her husband is in an identical position, and the pair estimate between them, they will repay around £200,000 before their loans are wiped. “It feels less like a student loan and more like a second mortgage with no asset to show for it,” she says. She works as a service manager for the NHS and currently repays £229 a month towards her loan. In 2014, she definitely thought university was worth it. Now she’s less sure. “If I were making the decision today, I might seriously consider a degree apprenticeship or alternative route,” she says. She wants the government to retrospectively cap interest rates at 1 per cent, increase the repayment threshold in line with the initially agreed terms, and freeze interest for those on parental leave. She voted Labour at the 2024 election but says based on the party’s approach to this and other issues, she won’t do so again. And she says the loan terms are having large consequences on her career choices. “I am considering reducing my hours in the future because I increasingly feel that my time is worth more that the financial return from working additional hours,” she explains. ‘Healey’s language was so patronising’ Mum Louise, 32, who lives in London, is equally disappointed. She graduated from her English literature degree in 2015 owing £38,000 towards the Student Loans Company, but now owes £44,000 – despite making thousands of pounds worth of payments through her salary over the past decade. She has just gone on maternity leave, and will keep accruing interest on her loan even when she moves on to statutory pay in a few months, leaving her more to repay in the future. She’s frustrated that Healey didn’t act at the Budget, saying there was a “big opportunity” for the government to change things. Louise is frustrated at the language used to refer to loan holders “Andy Burnham could have been the man who stood up for a generation, and he missed it. The fact that the loans weren’t even mentioned made me quite angry,” she says. But perhaps as much as the lack of policy change, Louise, who works in the fast moving consumer goods industry, was frustrated at the language the Chancellor used in interviews following his fiscal event. Speaking to consumer expert Martin Lewis in the days after the Budget, Healey was pressed on why he hadn’t overturned a freeze to the loans thresholds. “I know youngsters that are really trying to make their way. And it’s a challenge for a whole generation. I simply haven’t been able to take action I might have wanted to take at this Budget,” Healey replied. Louise takes huge issue with the phrasing. “Referring to us as youngsters? I’m 32, have a mortgage and a child. It’s so, so patronising,” she says. Louise has previously voted Labour, but says she would reconsider at the next election. “This is a government that completely ignores us. We’ve been let down. Saying they’ll come back to it later completes disregards a whole chunk of voters,” she adds. ‘There’s a lot of soundbites, but little action’ Alex, 31, who lives in Sheffield and works in accounting and finance, left the University of Liverpool in 2017 after studying law with a loan of £52,000. Nine years later, and thousands repaid, he owes £68,000. “There’s no hope I’ll repay it before I retire,” he says. Alex’s loan, like others on plan 2, will be wiped 30 years after he graduated, in his early 50s, and until then he expects to pay an effective 9 per cent tax on top of the 40 per cent income tax and 2 per cent national insurance he pays as a higher rate tax payer on every extra pound he earns. It means from every pay rise he gets, he keeps less than half. Alex, who lives with his partner in a mortgaged property, feels he got a “lot of value” from his degree, though he’s not sure he’d now say financially it was worth it. “The jury’s out on whether it was value for money,” he says. As a Labour voter, he’s also disappointed in the government. “It’s very tricky when you don’t hear anything from a government that comes in supposedly to change things,” he says. “There’s a lot of soundbites but very little action. Reversing the threshold freeze would have gone a long way, and we need to see some concrete change,” he says. So what does the government say to those in their 20s and 30s who have been angered by the lack of action? It is giving nothing away on whether it intends to change policy in the future. HM Treasury did not respond to questions about the Chancellor’s language. The Department for Education was also contacted for comment.