A third of people in the UK now believe a university degree is not worth the cost, as MPs launch a fresh inquiry into the student loan system.
The findings come from a survey conducted ahead of a new parliamentary inquiry that will hear directly from graduates about the size of their student debts and the interest rates applied to them. The inquiry, announced by the Education Select Committee, will examine whether the current system offers value for money for students and taxpayers alike.
“A new parliamentary inquiry into student loans begins amid polls showing a third of Britons think a university degree is not worth it, citing high debts and interest rates.”
University tuition fees in England have been capped at £9,250 per year since 2017, with similar levels in Wales and Northern Ireland, while Scottish students pay nothing for tuition but face other costs. Average student debt upon graduation now exceeds £45,000 in England, with interest rates tied to inflation and the Bank of England base rate, currently at 5.25%.
The survey, conducted by the National Education Union, found that 34% of respondents said a degree was not a worthwhile investment. Among younger graduates (aged 25-34), the figure rose to 43%, highlighting growing disillusionment. Critics argue that high debt levels deter students from lower-income backgrounds and burden graduates for decades.
The inquiry will also consider the impact of interest rates on loan repayments. Currently, graduates repay 9% of income above £25,000 for Plan 2 loans (England and Wales), with interest rates ranging from 7.3% to 8.3%. The Office for Students has warned that rising rates mean many graduates will never fully repay their loans, with the government writing off outstandings after 30 years.
Regional variations are significant. In Scotland, tuition is free but living costs are not covered by loans. The Scottish Government recently increased bursaries. In Wales, the system mirrors England but with a lower interest rate cap of 4.4%. Northern Ireland has a lower fee ceiling of £4,630 per year. The inquiry will assess how these differences affect perceptions of value.
Witnesses including the National Union of Students, Universities UK, and the Institute for Fiscal Studies are expected to give evidence. IFS researchers have previously noted that the current system is "regressive" because higher earners repay more but also benefit from loan write-offs later.
MPs on the committee will later publish a report with recommendations to the government. Possible changes include capping interest rates, lowering the repayment threshold, or introducing a graduate tax. The Treasury will have final say on any reforms.
What This Means For You - Prospective students: You face a decision weighing debt against career prospects. The inquiry may lead to fairer repayment terms. - Current graduates: Your loan balance continues to grow with interest. Any changes could affect future repayments. - Parents: You may be asked to contribute. Means-tested maintenance loans are available for students from lower-income families. - Taxpayers: Subsidising the system costs billions annually. Reforms could shift the burden.