Who broke Britain? Welcome to The i Paper’s opinion series in which our range of experts tackle this question and identify the individuals whose decisions caused the country’s biggest problems. • David Cameron: The unlikely villain who casually killed the Conservative Party• Tony Blair: A sincere deceiver who broke Britain’s trust on migration• Ed Miliband: the man to blame for the wreckage of this Labour Government• Denise Coates: The queen of a 24/7 gambling culture that ‘destroys families’• Steve Jobs: The twisted genius who turned us all into lonely, anxious addicts• The historic blunder of one ‘Tory toff’ that means your council is utterly useless

Who broke Britain? Welcome to The i Paper’s opinion series in which our range of experts tackle this question and identify the individuals whose decisions caused the country’s biggest problems.

• David Cameron: The unlikely villain who casually killed the Conservative Party• Tony Blair: A sincere deceiver who broke Britain’s trust on migration• Ed Miliband: the man to blame for the wreckage of this Labour Government• Denise Coates: The queen of a 24/7 gambling culture that ‘destroys families’• Steve Jobs: The twisted genius who turned us all into lonely, anxious addicts• The historic blunder of one ‘Tory toff’ that means your council is utterly useless

A crisis that has been brewing for years is coming to a head. Graduates who have been quietly, helplessly watching their student debt grow – despite chipping away at it each month – are demanding redress for what they and many Britons see as a profoundly unfair situation. And recent university leavers are questioning whether their degrees were worth anything as they battle for low-level jobs.

The social contract of working hard, going to university, landing a good job and getting on to the housing ladder is broken.

The debate over student loan repayments is not new, so why do people suddenly care? Some say it’s down to millennial MPs being faced with with huge debt themselves. Others blame Rachel Reeves for tinkering with repayment thresholds in the Budget.

But while the Chancellor may have put the final nail in the coffin, it was David Willetts who drew up the blueprint.

You may not have heard of him, but you will know what he did. The former universities minister under David Cameron’s coalition government was the architect of the infamous tuition fee rise from £3,000 to £9,000 in 2012.

What you also may not know is that he also overhauled the student loan repayment system, with changes to the salary repayment threshold, interest rates and the age at which a loan is written off. Crucially, Willetts introduced the argument that student loans should be seen as a tax, not a debt.

He pitched this framing in an interview with the Guardian in 2011, arguing that “we’re trapped in this language of debt”, but the student loan system is “closer to the income tax end of the scale than the credit card end of the scale”.

“It’s not like some debt around their necks… honest!” he added.

When I came to apply for university in 2016, I believed wholeheartedly that higher education would be my ticket to success, and paying my dues with a graduate tax was a minor cost to bear. I took out an undergraduate loan of just over £50,000 and a postgraduate loan of £11,222.

Little did I know that a decade after I embarked on my undergraduate degree, my total loan repayments – currently at a healthy £83,318.09 – would be growing, despite paying hundreds of pounds towards it each month.

It is these monthly repayments that prevent me from saving enough money to be in with a chance of getting on to the housing ladder any time soon, if ever.

Should I have known better? I’ll be the first to admit that my 18-year-old self was not the most financially astute. But I believed that getting a degree would unlock lifetime earnings that would render the so-called graduate tax insignificant.

And therein lies the problem: it feels more like a crushing debt than a tax. I presume anyone who started university between 2012 and 2022, and therefore lumped with a Plan 2 student loan, might agree.

In 2012, Willetts – who picked up the nickname “Two Brains” for being so clever – created a new system that was designed to be “sustainable, affordable and progressive”. It is fair to say the reforms were well-intentioned, with repayments contingent on earning a decent salary and the interest rate devised to offer greater protection to the lowest-paid graduates.

But over time, the terms have not stayed the same, with the salary threshold at which repayments start failing to keep pace with inflation and the interest rate turning out to be anything but progressive. The system, as a whole, is not sustainable.

Firstly, when Willetts announced the student loan reforms, he said the repayment threshold – meaning the level at which loan repayments are taken from your earnings – would be set at £21,000 and then increased “periodically to reflect earnings” from April 2016. Students earning above this threshold would start repaying 9 per cent of their income above the threshold.

This promise was designed to keep loan repayments down, but this has not been honoured by successive administrations. The earnings threshold has been frozen more frequently than it has risen, being held between 2016 and 2018, 2021 and 2025 and again from 2027 until 2030. This has rendered repayments practically unaffordable for graduates on all but the highest salaries, and means only very few people are actually earning enough to pay down their loans.

Secondly, the new interest rate was presented as a way of getting higher-earning grads to cushion those in low-paid jobs. But in reality, it means students from poorer families who are eligible for higher maintenance loans have left university with the highest debt interest to pay off.

Before the reforms, graduates started building interest from the date of the first loan repayment, with the rate tied to the Retail Price Index (RPI) measure of inflation. But after, students started accruing interest of RPI plus 3 per cent as soon as they began their degrees. Once they graduated, they would accrue interest ranging between RPI and RPI plus 3 per cent, depending on how much they earn. The maximum rate is currently 6.2 per cent (RPI plus 3 per cent), but at its peak it was 8 per cent.

This means that many students on Plan 2 loans built huge levels of interest before graduation – and even before getting the chance to earn a full-time salary. It also means that those who borrowed the most money via maintenance grants left university markedly worse off.

As Luke Charters, the Labour MP, told Parliament earlier this year, our generation did not receive clear communication on how loan repayments would work, laying grounds for a “mis-selling scandal waiting to unfold”.

Finally, Willetts’s student loan system does not appear to be sustainable for the country, with growing numbers of graduates not repaying their student loans in full. Previous reporting by this newspaper revealed that thousands of graduates are dodging £1bn in student loan repayments after moving abroad.

When repayment thresholds were frozen in 2016, and again in Reeves’s November Budget, the justification was “sustainability”, suggesting that the assumptions underpinning the 2012 system were flawed and it would not stand the test of time without these painful tweaks.

Ministers have so far insisted that the system is “fair”, arguing that graduates benefit from higher earnings, so it is only right that they foot the bill.

But a recent YouGov poll found that nearly half of the population supports the idea of the Government writing off some (or all) student loan debt. I imagine officials will find this statistic alarming, as it suggests that public outrage shows no signs of abating.

Willetts sowed the seeds for a cohort of bitter voters, a younger generation doubtful about the value of university, and a student loans system that now stands on the brink of crisis. But it was successive governments that tinkered with the terms, laying the groundwork for a mis-selling scandal that could really take flight. It wouldn’t be cheap – the calls range from amending interest rates to wiping student loan debt altogether.

Willetts pioneered a system that’s so expensive that school leavers no longer have the luxury of being hazy on the finances when deciding whether to go to university. Like me, they will be hearing stories of recent graduates from top universities unable to land entry-level jobs, despite taking on huge levels of debt.

The reforms were well-intentioned in seeking to support lower earners. But they have become unaffordable, unsustainable, and have sullied the dream of higher education. They are not what anybody could call progressive.

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