Why grads are mad

This article was first published in The Critic.

The politics of tuition fees has reared its head for the first time in years. The student protests of 2011 — while a formative moment for many Millennial leftists in Britain — feel like an historic footnote. Britain seemed to forget about the politics and economics of higher education for around a decade. 

In 2012, the new system was introduced, tuition fees increased from £3,000 a year to £9,000, and the Liberal Democrats signed their political death warrant. This seemed to be permanent until the emergence of Brexit in 2016. Labour breathed a sigh of relief that they could oppose a measure hated by the young, despite having increased tuition fees during their time in office and even got the ball rolling on these very plans which were ultimately enacted by the Conservatives. 

The system introduced in 2012 created a new consensus that few political parties had any interest in overturning by the 2020s. Fees were increased to allow the massive expansion of university places, and graduates would repay their fees at a lower monthly rate than students on the system which ended in 2011. Some claimed this was more progressive than the old system. Though the Labour Party nodded in sympathy with the youngsters facing larger piles of student debt than their predecessors, Sir Keir Starmer and Rachel Reeves evidently had no intention changing the system by the time they entered office in 2024. 

Fast-forward to 2026, and it seems like tuition fees are turning into a well-placed bomb underneath the Labour Party, laid by George Osborne with a timer set to blow in 15 years. Just like the creation of the Office for Budget Responsibility, Chancellor Rachel Reeves now finds herself defending a Tory settlement which is actively harming her political fortunes. 

After the last Budget, the Chancellor announced that the threshold at which repayment of student loans would start for those on the post-2012 scheme would be frozen for three years at £29,385, meaning more lower-earning graduates will be dragged into repayments. The issue has thus forced its way back into political discussion. Graduates are reckoning with a system where the Government can increase the interest paid on their loans, change the income-related threshold at which the payments kick in, and potentially even extend the period of time it takes until the loan is written off, which currently stands at 30 years, around the same time as the average length of a mortgage. 

By holding the repayment threshold for three years, the Government is adding hundreds of pounds to many graduates’ annual repayments, alongside stealth increases to income tax by the same method. Today, many graduates on the post-2012 scheme are reckoning with a system where their repayments have increased, but the interest rates make it less likely that they will ever clear the balance of their student loans.

The unfairness is hard to ignore. New Statesman journalist Oli Dugmore took to the airwaves to attack the Government for increasing taxes on young people while protecting benefits for the old. Others have claimed that graduates have been mis-sold the promises of higher education, burdened by repayments which function like a time-limited graduate tax, without achieving the expected uplift in earnings they hoped for, after over 15 years of stagnant wage growth. Calls for bailouts paid for by other taxpayers are reminiscent of the WASPI campaign, such is the zero-sum nature of the issue. However, those of us who enrolled on the final academic year with fees of £3,000, may feel like we jumped onto the last helicopter fleeing a warzone.

This has left Reeves in a painful position. Despite opposing the hike in tuition fees in 2012, she has been defending the new system as fair and proportionate. Those at the sharp end will see quite the opposite. They have realised that they are uniquely exposed to the whims of the Treasury. This feels particularly unjust when one reckons with the £5 billion of unpaid student loan debt owed by EU students who have returned to Europe and have no obligation to repay the Student Loans Company for the loans funded by the British taxpayer to which they were entitled when Britain was a member of the EU. 

Working age adults, particularly those under 40, voted for Labour in huge numbers in 2024, 2019, 2017, and 2015. They have been fundamental to Labour’s voting coalition for a generation, particularly women, who are also more likely than men to have gone to university. While the fiscal picture is clearly constrained — making spending choices unenviably zero-sum for the Chancellor — this provides another political headache for Labour. While Reform UK lead the polls nationally, they have taken votes primarily from the Conservatives, and fewer former Labour voters. Today, Labour is haemorrhaging support to the Greens, and in some areas the Liberal Democrats. Resentment of tuition fees will almost certainly be an important component of this. Both parties have made attractive promises for those keen to shed or avoid student debt.

It is hard to see where the Chancellor goes from here, however. This political resentment will not go away, especially as British wages and living standards continue their meagre growth. Indeed, it is not hard to link the huge expansion of higher education and the immiserating credentialism that comes with it with sluggish wage growth and a poor labour market.

Few politicians want to admit that the massive expansion of higher education in the 2000s and 2010s was a mistake, despite its obvious shortcomings. The graduate premium has all but disappeared, many people feel lied to by the state, universities themselves have become infamous for poor quality courses; a reliance of foreign students of dubious quality; foolish speculative property investments which are turning sour; and sky-high salaries for Vice Chancellors. The more university attendance expands, the more worthless our degrees become, and the more the justification for pushing so many into debt crumbles. If our political class could bring itself to be honest and admit that around half of universities should close, and a smaller number of university students should be able to go to university for much lower fees to obtain more academic degrees, that would be progress. 

But that won’t happen. The Chancellor will defend a system she dislikes, her officials will attempt to squeeze a few extra pounds out of Britain’s graduates, and many of them will ponder whether it was worth going to university at all, or if it is worth staying in Britain and paying off a debt they feel tricked into. For the Prime Minister, as ever, the only way seems to be down. And the status quo will continue, until all of a sudden, it doesn’t.