You may have noticed that the student loan system is suddenly enjoying an extraordinary amount of airtime. Comment pieces by aggrieved graduates are piling up, all outraged by the same discovery: tens of thousands of pounds in debt, eye-watering interest rates, frozen repayment thresholds, and balances that appear to grow no matter how much is paid off. Like a social contagion, it has prompted a generation to dig out long-forgotten Student Finance England logins and stare in horror at the numbers. My God. It’s worse than we thought.
This scrutiny is long overdue. The UK’s student loan system has been exploitative ever since the coalition tripled tuition fees and changed the repayment terms. What’s interesting is not that it’s being criticised, but why it’s happening now. The answer is unglamorous but telling: a new cohort of MPs has entered the Commons carrying student debt themselves. For the first time, those living under these policies are close enough to power to make noise.
Take Labour MP Luke Charters, who recently described the system in Parliament as a potential “mis-selling scandal waiting to unfold”. Charters, 30, still paying off his own Plan 2 loan, pointed to punishing interest rates and the fact that many students were never clearly told how the system would actually work when they signed up. Charters’s speech was striking precisely because it was rare: an MP speaking openly about their own student debt, exposing just how unrepresentative Parliament has been of the very real financial burdens facing the six million graduates across the country.
But while the student loan system is a problem in its own right (many graduates are paying hundreds of pounds a month just to service the interest), it is also demonstrative of something larger. UK democracy systematically favours older people. For decades, political incentives have rewarded parties for catering to those with the most reliable electoral power while sidelining those with the least: younger people, often renting, overworked, and economically precarious.
The consequences of this skewed incentive structure are everywhere. My generation are trapped in jobs, relationships, towns and lifestyles they cannot afford to leave. Student debt is not merely a personal burden; it shapes life choices, delays family formation, and entrenches inequality.
Yet policy responses remain piecemeal, because the underlying political calculus has not changed. In the recent Budget, graduates were hit with a double whammy: frozen income tax thresholds and frozen student loan repayment thresholds. That means graduates earning just over £30,000 face an effective tax rate of around 37%, rising to nearly 60% for higher earners. This is the generation with few assets, savings, and often no secure housing. Yet the state takes first, and generously.
When questioned about the student loan system, the chancellor Rachel Reeves has defended it as “fair” because people shouldn’t have to pay for others’ university education. That sounds fair. Perhaps. But then what are pensions, if not an enormous cross-generational transfer, dwarfing the cost of higher education? If the principle is that we shouldn’t fund other people’s futures, why is it invoked so readily for students, yet treated as sacrosanct when it comes to retirees? The answer, of course, is not fairness, but votes.
My generation has been remarkably poor at demanding structural change. We have swallowed the myth of meritocracy, internalising bad policy as personal failure. When I asked friends to check their student loan balances, several said they couldn’t – it would make them too depressed. That, to me, is entirely symptomatic. But without acknowledgement, we can not interrogate the decisions that led us here. And the cycle feeds itself: because politics neglects us, we neglect politics.
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Is 2026 the year that Britain’s universities go bankrupt?
It’s time to look elsewhere. In Australia, compulsory voting from the age of 18 forces parties to take younger voters seriously from the outset. Last year, Australia wiped around $16bn off student debt. No coincidences here.
Compulsory voting would not magically fix youth disengagement, but it would change the incentives that sustain it. In countries where voting is mandatory – Australia, Belgium and much of Latin America – turnout among young and low-income voters is dramatically higher and more equal. When younger voters become part of the guaranteed electorate their concerns stop being niche and start shaping political competition. Parties campaign differently, policy follows, and disengagement stops feeding on itself.
Ultimately, the student loan crisis is not just a financial failure, but a democratic one. It exposes a political system that rewards turnout over need. Of course, the chancellor can, and should, begin by fixing student loans. But unless the incentives that shape our democracy change, we will be having this same argument again in another decade – prompted, no doubt, by another group of politicians turning up to Westminster, discovering just how expensive inaction can be when the debt lands on their own doorstep.
