University has been sold to young people as the gateway to opportunity, yet the cost of that promise has risen dramatically. In England, graduates now leave university with loans averaging £53,000, under a complex repayment system that the current Government is under political pressure to review. Some argue the UK’s student loan model is fair, with repayments linked to income and unpaid balances eventually written off. Critics, however, claim it functions more like a long-term graduate tax, trapping borrowers for decades. So are student loans a scam? Former chancellor Kwasi Kwarteng, parent Paul Wiltshire and graduate Sophie Butcher offer their perspectives.

University has been sold to young people as the gateway to opportunity, yet the cost of that promise has risen dramatically. In England, graduates now leave university with loans averaging £53,000, under a complex repayment system that the current Government is under political pressure to review.

Some argue the UK’s student loan model is fair, with repayments linked to income and unpaid balances eventually written off. Critics, however, claim it functions more like a long-term graduate tax, trapping borrowers for decades.

So are student loans a scam? Former chancellor Kwasi Kwarteng, parent Paul Wiltshire and graduate Sophie Butcher offer their perspectives.

“If you think education is expensive, try ignorance.” This famous quotation, attributed to Derek Bok, a former president of Harvard University, gets to the heart of the matter.

Harvard is one of the most prestigious and most expensive colleges in America. When someone objected to paying its enormous fees, Bok reportedly uttered this memorable line.

Simply put, education is worth paying for and the financial advantages of a university education are striking and undeniable.

According to government statistics, 87.6 per cent of working-age (16-64 years old) graduates were in employment in 2024, compared to 68 per cent of non-graduates. And the Institute for Fiscal Studies found in 2020 that over their working lives, graduates will be between £100,000 and £130,000 better off on average by going to university after taxes, student loan repayments and foregone earnings are taken into account.

Students who benefit in this way, therefore, cannot expect the average taxpayer to pay entirely for the lifetime benefit they receive.

That is why a system of loans, where students take on debt to invest in their own futures, is entirely reasonable.

Credit is plentiful in today’s society. People borrow money for all kinds of reasons. We borrow money, often at exorbitant rates on credit cards, to buy presents, to go on holiday, to buy a car. Most house or flat purchases are paid for by a mortgage, which is just a specific debt.

Yet when it comes to education, probably the very best investment people can make in their future, there is still, remarkably, wide opposition to the idea that the student should be the one making the financial commitment to his or her education.

Somehow, it is argued, the general taxpayer should fund an education which directly benefits only a minority of people.

Today, the principal argument, to be fair, revolves around the level of interest which is charged on student loans and the disparity between different year groups. This clearly has to be addressed. It cannot be right to charge different cohorts drastically different interest rates, simply on the basis of when they started university.

But the principle that students should be responsible for their own education beyond secondary school is important. Those who benefit from university education should be the ones to pay for it, generally.

In this country you are an adult at 18. This is the age at which we take on full adult responsibilities. At that age, people should be able to make a calculation on the amount of debt they are willing to take on to invest in their future.This is a reasonable expectation in a country in which 16-year-olds will soon have the right to vote.

Many young people are choosing not to go to university. Apprenticeships are more popular. Many in Britain are now combining apprenticeships with degrees in banking or law, in a way that has been common in Germany and Switzerland for decades.This is a good development. It is a sign of a mature society that today’s young can make different rational choices about their future, based on the usual metrics of risk and reward.

But student loans are here to stay, and we should be grateful for that.

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