Government survey shows scale of disillusionment with student loan system

This article appeared as part of the Daily Sensemaker newsletter – one story a day to make sense of the world. To receive it in your inbox, featuring content exclusive to the newsletter, sign up for free here.

A government survey into the impact of student loans on UK graduates suggests a widespread disillusionment with the system. Of the 49,357 respondents who took out loans, more than 90% said they thought the level of interest was not reasonable, 81% said the cost of repayment was worse than expected, and nearly 70% said their loans had a material effect on their financial planning for the future. More than half would not take out their student loan again if they had the choice. The survey was part of a call for evidence by the Treasury committee, which is looking at the taxation of graduates and whether the repayment terms are reasonable. A particular focus is on Plan 2 loans issued in England between 2012 and 2023, and still issued in Wales. Graduates on these loans pay back 9% of everything they earn over the repayment threshold. But interest means that, for many of them, their overall debt barely shifts.