25 July 2025, 12:11

By Abi Foster

We’ve normalised 18-year-olds starting adult life tens of thousands of pounds in debt, and called it “fair.”

But if we’re serious about empowering young people, it’s time we looked beyond the student loan system.

In England, the average graduate leaves university with over £45,000 in student debt. The total student loan book has now reached £206 billion, with the government projecting it will exceed £300 billion by the mid-2040s. And yet, most people don’t really understand how student finance works.

We call it a “loan,” but in reality, it behaves more like a graduate tax. You only start repaying once you earn above a threshold (currently £25,000 for Plan 5 students), and any unpaid balance is wiped after 40 years. For most graduates, especially those on average incomes, they’ll never repay it all.

The problem is, we’ve failed to explain this clearly. Young people hear “debt” and........

© LBC