Young people’s faith in student finance has been badly shaken by findings from the Treasury Committee that official promotion of loans, likening repayments to a phone contract or cinema tickets, amounted to mis-selling. One student accommodation boss warns the damage runs far deeper than clumsy communication.
The committee’s report, published this week after an inquiry that drew more than 52,000 responses, concluded that the Department for Education and the Student Loans Company misled prospective students in three respects, including by failing to make clear that the government could rewrite loan terms retrospectively.
Around 5.8 million people took out Plan 2 loans between 2012 and 2023, and Business Matters has already reported that more than half of graduates say they would not take out a student loan again, with the average graduate now leaving university with roughly £53,000 of debt.
“The latest findings point to something bigger than poor communication around student loans,” says Owen Dixon, founder of Best Student Halls. “They suggest a serious trust gap between young people and the system they are being asked to buy into.
“For years, students were encouraged to see university debt as manageable, normal and something they did not need to worry about in the same way as commercial debt. But that message looks very different when graduates are facing repayment threshold freezes, high living costs and a much more uncertain financial landscape.”
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