Student Debt in Britain

I just read an article in the New Statesman, 4-10 September 2026, (for full text, see photographs below) that I found hair-raising. If you haven’t time to read the whole thing, let me quickly run through the salient points, as until I read the piece I did not understand anything about the debt demands young graduates in Britain have to deal with. Now I’ve read the article, I think the circumstances successive governments have created for the next generation of young adults are outrageous. Anyone else who was as ignorant as I was about student debt may be interested. The situation graduates are put in seems unfair and stupid and likely to corrode any kind of trust or faith they might have had in their own society.

The article begins by outlining the situation of a young woman who studied for a BA and, on graduating, completed a certificate to qualify as a teacher. She took out student loans, as this was the only way she could finance her study. This led to an initial debt to the Student Loans Company of of £35,719 for her BA and a second debt of £12,827 for her teaching qualification. Since graduating, she has worked as a secondary school teacher, and she is now on a salary of £42,057 per annum. She has been paying £95 per month toward her loan debt but, more than a decade after she embarked on her first degree, her debt continues to rise by £400 per month. She now owes the Student Loans Company £76,765.23, of which £28,219 is interest.

“Graduates with salaries above £30,000 pay a 37 per cent marginal tax rate (basic rate income tax 20 per cent, National Insurance 8 per cent, plus 9 per cent student loan repayment). For those with salaries high enough to push them into the higher tax bracket (40 per cent on earnings over £50,270), it’s 57 per cent. Under Keir Starmer, Labour froze tax and student loan repayment thresholds, so more young adults will effectively pay more in tax and student loan charges in years to come.”

Today’s young adult graduates carry more debt than their parents’ generation did: on top of student loans, the size and length of mortgages for those who can afford to buy their own home are increasing - it is now not unusual for people in their mid-to-late thirties to be granted a mortgage on the proviso that they sign a contract promising to work beyond the state retirement age.

Increasing indebtedness, with no end in sight for many people, is one reason young people are having fewer children - and, when they do have children they only do so later in life. The writer herself explains that she is 38 years old, has a ‘good’ job, earning far above the national average wage, but only managed to pay off her student loan fairly recently. She has managed to save £50,000 for a deposit to buy somewhere to live but it is not enough to buy anywhere near where she calls home. She describes herself as one of the lucky ones, because she’s solvent, but she still knows that, although she very much wants a child, she will be 40 before she can have one, “a fair bit later than I, or the limits of my fertility, are comfortable with.”

A successful self-employed plumber may now earn more and have less debt than a mid-level solicitor, who has the additional worry of possibly being replaced by AI in the not too distant future. And yet even Hannah Spencer, who claims to be a plumber, appears to be affected by the economics of being a young adult in Britain today:

“Working hard used to get you something”, she said in her victory speech after the Gorton and Denton by-election, “It got you a house, a nice life, holidays, it got you somewhere. Now, working hard - where does that get you?”

Unsurprisingly, neither the New Statesman nor Hannah Spencer go anywhere near the question of the economic consequences of immigration and the housing and benefits that flow to new arrivals. But that’s another story - or another aspect of the terrible financial tangle Britain finds itself in.

My main question is: how is it justifiable for the government to charge interest on student loans? Who can possibly think that alienating and impoverishing a huge number of your younger citizens can ever be a good idea?