More than twenty Labour MPs have called for reform of England’s student loan system. Leading a parliamentary debate, Jas Athwal argued the system is unfair, with many graduates seeing balances rise despite regular repayments. Under current arrangements, Plan 2 borrowers pay interest linked to RPI inflation plus up to 3%, depending on earnings. From April 2027, the salary threshold triggering repayments will be frozen for three years, a move critics say effectively increases the burden during a cost-of-living crisis. Some MPs described the terms as retrospective and punitive, while others backed scrapping tuition fees entirely. Kemi Badenoch also urged lower interest rates, and the Conservatives have also said they would close 100,000 university places to alleviate debt and fund apprenticeships instead, arguing that some degrees were leaving graduates worse off. Keir Starmer acknowledged concerns and said the government would consider ways to make the system fairer.

University students in the UK are facing unprecedented rent increases as the value of maintenance loans fails to keep pace. Rents have risen by over 8% since 2022, with some cases seeing increases of up to 27%. The demand for accommodation has soared, with nearly 390,000 more students needing housing in the past decade. Rising operational and development costs, high inflation, and a decline in new bed space delivery have contributed to the increases. The average private sector rent outside London now exceeds £7,600 per year, consuming 77% of the maximum student maintenance loan allowance. Fewer than 10% of beds in major university cities are affordable to students receiving maintenance loans and grants. Rental growth in purpose-built student accommodation has reached 9.4%, exacerbating the affordability challenge. Students are increasingly taking on part-time work to cover expenses, negatively impacting their studies. To address the crisis, there have been calls for increased maintenance loans, rent freezes, and rent controls.

Former education secretary Nicky Morgan will lead an inquiry into the rising costs of the student loans system in England and its possible replacement by a graduate tax. The investigation is needed because of the steeply rising levels of debt carried by graduates after leaving university. It will run alongside similar hearings on personal finance by the House of Lords economic affairs committee. A recent report from the Gambling Commission found that some students have £10,000 gambling debts. A 24-year-old who got into gambling at university said, ‘It went from spending a few days after coming home from lectures and going onto my laptop to suddenly saying no to going out with friends, maybe saying no to going to uni. I think you can be very vulnerable. I'd never budgeted before, and money was a whole new concept to me.’ See also: