Thirteen years ago, during my first term as a sixth former, I walked out of school at morning break, skipped my Maths A-level class, and went into Lancaster City Centre to protest against proposals by the coalition government to treble tuition fees.
I didn’t really know how student loans worked at the time, but £9,000 a year for three years to go to university sounded very bad – and the prospect of missing an hour and a half of calculus and the Poisson distribution was much better.
I returned to school that afternoon and bumped into my deputy head of sixth form, who asked me whether I’d been at the protest and, if so, why. When I told him I thought I shouldn’t have to go into debt to go to university and that education should be free (a slogan I’d heard at the protest), he said – in typically dry fashion – that he didn’t necessarily disagree, but that walking out my already free education to go and make this point seemed a little counterintuitive.
As I stood, wide-mouthed, trying to summon up a response, he told me that writing to my MP might have been a better option, but that I was “extremely lucky” as I’d have the chance to do just this during a Friday after school detention.
I later concocted a message to Tim Farron (who was not my MP, but was recommended by a friend’s dad) and sent it via Facebook Messenger (God knows why I chose this mode of communication). I still have this correspondence, and to Farron’s credit he replied with a full and detailed response. I rewarded this by writing happy birthday on his Facebook “wall” the following year – if memory serves, I even invited him to an AS level results house party, which he politely declined.
That night, after talking to mum about what I’d done and why, she printed off a copy of an article by MoneySavingExpert.com’s Martin Lewis – at this stage not the celebrity he is today – explaining his thoughts on higher education funding, and suggested I read it in order to understand student loans a little better.
Since my first foray into the world of education funding, things have come full circle. I’ve worked for both Martin and the government’s finance ministry – HM Treasury – and now I’m a money reporter here at i. Over time my views on student loans have become a lot more nuanced.
I went to university in 2012 – the first year at which £9,000 a year fees were charged. I understand that what I owe is not debt in the traditional sense and that I’m unlikely to pay it back in full.
In practice, student loans work more like a tax. Those who repay them, under the current rules, pay from their pre-tax salary when their income goes over a certain threshold – similar to income tax.
You won’t be chased by any debt collectors if you fall below that threshold, and if you don’t fully repay within 30 years, it’s written off – something that will happen to most of current borrowers, according to best estimates.
But despite this, what many of my generation haven’t lost is the deep feeling of injustice that, along with all of the other perceived financial disadvantages we face, we also face a higher marginal tax rate than older graduates who studied before tuition fees were introduced.
The argument at the time for those who supported higher fees was that lower earners would be protected by a threshold, under which you wouldn’t have to pay anything at all – though the government seems to be doing its absolute best to destroy this argument by freezing this rate for several years, even though wages are increasing at a high speed in cash terms.
But when I’m finished feeling sorry for myself, I know that in reality I’d rather have the terms that I did as an 18-year-old back in 2012, over those faced by teenagers going to university this autumn.
A change in student loan arrangements mean they will start repayments at a far lower level – £25,000 compared to £27,295 – and will continue to pay them off for an extra decade, meaning many face making repayments in their 60s.
With the median salary in the UK sitting at around £33,000, the argument that lower earners are in anyway protected by the structure of loan repayments can surely be dismissed out of hand.
Someone earning this salary under the new plan faces paying back £720 a year, and someone on £40,000, £1,350.
It means a 21-year-old earning £26,000 as an intern faces a higher effective marginal tax rate than a 55-year-old who went to university before fees were introduced and earns £50,000.
Sadly, the changes to the system don’t seem to have received anything like the attention they did in the early days of the coalition government.
Speaking to 18-year-olds this week, there seemed an acceptance that there was nothing that could be done – with one telling me “it’s not going to change”.
For a generation that were 15 when the pandemic hit, had their GCSEs cancelled and the socialising of their coming-of-age period curtailed by lockdowns, it seems a shoddy way to treat them.
Student loans have long been a political football, and what seems like minor tweaking is obviously far less likely to attract attention than the trebling of fees.
But while there has not been the protest we saw back in 2010, it’s time for – at a minimum – a bit more scrutiny and a debate about what we are saddling our future workforce with for the remainder of their working lives.
