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Heading Last updated February 2026 There has been some considerable debate over the last month about the student finance system - whether or not it's fair, and what can be done to change it. Some of you may recall that, a few years back, I was Shadow Minister for Higher Education, so I know the ins and outs of the current system better than most.
The student finance system we have was inherited from the previous Government, including Plan 2 loans (for students who started their courses before 2023) which is what has caused controversy. This is the system was introduced at the point when the Conservatives and Liberal Democrats trebled tuition fees back in 2012. To be upfront about my views, I dislike this system - I have seen clearly that it doesn't work for students, universities or the taxpayer.
Any system of student finance, I believe, should be progressive - and yet the current setup certainly isn't. I remember, during my time as the Shadow Minister, that we carried out research into student loan repayments, and who benefited and lost out as a result of how the system was structured on account of factors such as gender, race and occupation. This came up with some bizarre results - the average woman working in nursing, for example, was paying proportionately more than the average man working in the City.
However, the longer I spent as Shadow Minster, a post I held between 2021 and 2024, the more it became abundantly clear that there are no easy solutions to this issue. The Government, you may be surprised to learn, subsidises the student finance system by around £4.5 billion a year, getting on for 5% of the entire education budget - this includes writing off the loans of those on lower incomes after a 30- or 40-year period. Added to that, total student debt is now more than £267 billion.
In any shift away from student loans, or making terms and conditions more favourable, costs add up quickly. Around £22 billion is loaned to students each year - a large amount of money.
As such, I think the Government is right that the system should be improved incrementally. From 2028/29, we're reintroducing grants for low-income students, and uprating maintenance loans in line with inflation, after years in which the overall value of these has fallen by 20%.
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