The Budget ignored students’ crippling debt – don’t these young people count too?

Become an Independent member to bookmark this article Want to bookmark your favourite articles and stories to read or reference later? Start your Independent Membership today. Join today Already a member? Log in A few years after graduating at the height of the Covid pandemic, 27-year-old teacher Oliver Gardner was hit with a realisation that will be grimly familiar to others in his Gen Z cohort. “I just had this overwhelming feeling that as a generation, economically, we were massively getting screwed over,” he says.

Rapidly rising rents , similarly spiralling house prices, a tricky job market and a cost of living crisis were all playing their part in contributing to a dismal picture. But for Gardner, there was one issue that really seemed to loom over him and his peers. “ Student loans really epitomised the intergenerational unfairness that I saw in the UK economy ,” he says. But instead of simply checking his balance and gritting his teeth – or just trying to block it out altogether, like so many of us do – Gardner decided to take action.

So in July 2025, alongside his full-time teaching job, he founded Rethink Repayment , a campaign highlighting the unfairness of the current set-up, and fighting for a better system. It’s an initiative that has chimed with young people and helped to amplify the prevailing mood of dissatisfaction and anger among those burdened with seemingly ever-increasing student debt , the terms of which can be changed retrospectively by the government.

Since the launch, Gardner has coordinated a letter signed by more than 120 MPs and peers, calling on the chancellor to conduct an “urgent” review of the current repayment system, and has also given evidence to the Commons Treasury select committee as part of the inquiry into student loans launched earlier this year. Wednesday’s budget only seemed to confirm that graduates are being taken for granted . Burnham’s chancellor John Healey did not address the student loan debacle at all; the rise in the minimum wage to £27,456 will also mean that workers on this salary with Plan 5 student loans (introduced in 2023) will immediately hit their repayment threshold, which is set currently at £25,000.

Recommended I’m a personal finance expert and even I don’t know what to do about my student loan of £100k Student loans have screwed my generation. It’s time Boomers paid us back Want to understand Gen Z protests? Just look at their Gen X parents Earlier this year, education secretary Lucy Powell promised that the student loan system was at the top of her in-tray, and pressure has been growing for Burnham – who has so far concentrated on technical training and getting Britain’s one million NEETs back into training or work – to make a decisive move.

Protests in France, spearheaded by young people angered by the cost of living and an underfunded education system, have shown how easily generational disquiet can bubble over into action. In November, many British students are planning to also walk out of schools, colleges and universities as part of the international youth strike, taking a stand in the face of a grim, economically bleak future. For Gardner, “it is incredibly disappointing to see a complete lack of action in today’s budget” on student loans.

He says the lack of attention to the issue “shows that the government simply does not care about the financial pressures facing graduates. By failing to fix the system, the government are making an active choice to increase the monthly student loan repayments of millions of graduates, making it harder for them to achieve key life milestones like buying a house, starting a family, or saving for retirement. This has a huge personal cost as well as being awful for the UK economy in the long term”.

Earlier this year, data from the Organisation for Economic Co-operation and Development (OECD) showed that students in England graduate with an average debt that is three times higher than their counterparts in the United States (despite the widespread perception on this side of the Atlantic that the American system is significantly more expensive). English graduates, the OECD also found, leave university with more debt than those in any other developed country.

In France, where students have been protesting underfunding to the education system, among other issues facing Gen Z , annual fees at public universities are under €200 per year. open image in gallery Gardner, centre, with fellow campaigners: ‘The system is treating young people like cash cows’ ( Rethink Repayment ) Some wealthy parents will pay for their children’s fees outright, helping them avoid the burden of student debt, and only entrenching the inequality gap for a generation reliant on the bank of Mum and Dad; 2024 research from the consultancy High Fliers named London universities such as Imperial and UCL, as well as the likes of Bath, Durham and St Andrews in the top 10 institutions where students receive the most financial support from parents.

Graduates repay nine per cent of their income above the threshold, which is currently set at £29,385. But people with Plan 2 loans don’t just tend to have larger total debt balances than those who attended university during the Plan 1 era. They also face higher interest rates, so balances keep creeping up even when they are making significant repayments; this interest rate scales up as their income rises too. Like so many students of his generation, Gardner took out a Plan 2 student loan in 2017 to cover his tuition fees and living expenses for his three-year course.

Like so many, he did so without much thought. “Because my parents couldn’t afford to pay for it upfront and I wanted to go to university, I knew that I would have to take it out,” he says. Plan 2 loans were introduced in September 2012 in England and Wales under the coalition government, who also tripled tuition fees from around £3,000 annually to a £9,000 yearly cap (which has since risen to £9,790 for this academic year). In the 2025 budget, then-chancellor Rachel Reeves announced that the repayment threshold would be frozen from April 2027 to April 2030; as salaries rise with inflation, a larger portion will fall above that threshold, meaning graduates will end up paying more.

There was definitely a feeling that unless we stood up for ourselves and and took these issues on, no one else was going to do that for us Oliver Gardner All of this adds up to a system that is placing a huge strain on graduates – and “treating young people as cash cows”, as Gardner puts it. Before he started Rethink Repayment, student debt felt like the sort of issue that “lots of people were speaking about with their mates at the pub”, he says.

But it wasn’t really breaking through into the wider discourse, aside from some call-outs in the mid-2010s from the broadcaster and consumer rights activist Martin Lewis (who has since become an outspoken critic of Reeves’ threshold freeze). open image in gallery Rethink Repayment demonstrating outside No 10 North with the NUS and student union officers in September ( Margarida Vasconcelos. ) Because Gardner is part of “the first generation, really, that has been burdened” by these loans, he says, “there was definitely a feeling that unless we stood up for ourselves and took these issues on, no one else was going to do that for us” – “we can’t really rely on older people to make that argument,” he adds.

But the student loan scandal is not simply about “moaning privileged graduates” – it has huge implications for the aspirations of a generation, even for the nation’s productivity, which only makes Burnham and co’s budget silence more frustrating. With the repayment rate set at 9 per cent, “as soon as you become a higher rate tax payer in the 40 per cent income tax bracket”, Gardner explains, “you keep less than 50 per cent of every extra pound that you earn”.

So, if someone is being offered a promotion, with a pay rise that will take them into this higher bracket, “but it’s going to be more work and more stress, and you know you’re going to keep less than half of that, are you going to want to do it?” Gardner asks. It’s all contributing, he says, “to a sense of hopelessness that I think young people are feeling. It used to be the case that there was this social contract where you worked hard, you’d be able to buy a house, you’d be able to start a family and build a life for yourself.

Increasingly, young people aren’t necessarily seeing that, whether that’s them not being able to get jobs, or even when they get jobs as graduates, not feeling like they’re getting the reward from doing that.” There’s a widespread sense of disillusionment with higher education too: earlier this year, the latest British Attitudes survey found that the percentage of people who believe a degree is not worth the time or money has increased from 14 per cent in 2005 to 34 per cent in 2025.

So how could things change? Rethink Repayment’s first demand is to restore the repayment threshold to where it would have been without any freezes. “When people took out these loans in 2012, they were told that the threshold should rise each year with average earnings,” Gardner says. He echoes Lewis’s view that the government “have a moral duty to increase” it, and believes that doing so could help restore some faith; the freeze, he reckons, means the government are “now treating student loans as a tax in all but name, but that’s not what they were sold as”.

Second, they want to reduce the repayment rate from nine per cent to five percent, “which I think psychologically is really important”. Political parties do know that student loans aren’t an issue that’s going away, and that they will have to address it at some point And third, to cap interest at Consumer Price Index (CPI) inflation, rather than capping it at the Retail Price Index (RPI) plus three per cent. RPI typically runs higher, “causing lots of people to see their balances soar even when they’re making quite substantial repayments”.

As far back as 2018, a Treasury Committee report stated that there was “no justification” for using it to calculate student loan interest rates. A spokesperson for the Department for Education told The Independent: “ We are taking decisive action to improve the student finance system and break down barriers to accessing university, starting with improved and clearer guidance for those taking out loans. “We are increasing maximum maintenance loans in line with inflation, with the highest levels of support targeted at students from lower-income households, as well as reintroducing targeted maintenance grants of up to £1,000 a year from academic year 2028/29.

We will continue to monitor and improve the student loans system to make it fairer for students, graduates and taxpayers in a financially sustainable way.” open image in gallery The campaign is calling to overturn the repayment threshold freeze introduced by Rachel Reeves ( PA Wire ) However, when you consider how little European students pay, I ask Gardner, why not push for a rethink of not just repayment, but of tuition fees altogether?

“One of the things early on that I was really keen for was for it to be quite pragmatic,” Gardner says. He believes that part of the reason that politicians have been happy to work with the campaign is that “we want to achieve something that’s workable”. He has also always focused on keeping the campaign nonpartisan, as it’s an issue that “does impact people across the political spectrum, where a lot of people with quite different political views actually come and agree”.

And again, he is pragmatic that “actually to get somewhere it requires a much broader consensus”. Recommended How Martin Lewis became Burnham’s ‘shadow’ chancellor Baked beans, marmalade