Graduates here treated the question as a test of whether student finance remains a route into social mobility or has become a debt that compounds long after the education is over. The chamber backed Yes by more than four to one, with the intensity of the case outweighing the relatively narrow wording of the proposal.
The floor’s most-respected Yes argument called the system “state sponsored loan sharking”, tying interest to a 9% repayment surcharge and arguing that graduates who stay and work can be made to pay far more than they borrowed. Other Yes voices called interest “a second tax”, demanded interest-free loans and framed the cap as a matter of “natural justice”, while also insisting that overseas non-payment and low-value courses were separate problems rather than reasons to abandon the cap.
No voters did not offer a defence of the existing arrangement so much as a series of alternative repairs. The sharpest objection was that higher earners could be trapped in “perpetual debt”; others wanted loans to become “fully commercial”, fees to be scrapped and replaced with taxation, or students to acquire more financial literacy before borrowing. That left the two sides talking past each other: Yes concentrated on the terms of repayment, while No questioned the design of university funding and, in some cases, the value of the courses themselves.
The wider argument is over whether education should be financed as a private investment, a graduate tax or a public investment in skills the country needs. The Yes case that graduates might repay through future taxes — “short-term pain for the Government but a long-term gain” — sat alongside calls to steer talent towards nursing, teaching, science and other shortages, making the vote about allocation as well as interest.
The verdict was emphatic, but its own strongest argument came with a qualification: “Do not confuse a cap with an open door.”
16 Opinions
The UK student loan system is state sponsored loan sharking. Slapping compound interest on top of a 9% tax surcharge means hard working grads pay more whilst the super rich pay upfront and dodge it entirely. It’s basically a lifetime fine on social mobility
System is broken. We bizarrely give £100 Million loans to foreigners who then disappear & renege on debt. We spend £81 Billion on funding low IQ ignorant criminals but can’t properly educate our own. It’s not that a proper system can’t be designed, it’s choices & Politicians & Civil Servants don’t seem to want a fair transparent system. UK State has an uncanny ability to spend what it wants on chosen projects but ignore what’s right for UK. Who is really in charge? Not PM.
Reform is needed of the Plan 2 interest rates, it’s deeply unfair for higher earners to be hit with higher interest rates that keeps them in perpetual debt.
I qualify my answer with depending on the course. University courses should be for academia. An engineer is hands on the understanding of machinery is not theoretical a degree in engineering is not needed an apprenticeship is.
Make student loans interest free.
Student loans are to allow those without rich parents go to University. They are easy targets, by government sponsored back ally loan sharking with a smily face. Stop the interest, bring the loans back under government control and let the loans do what they were originally designed for.
Young people need to be more financially literate before agreeing to take loans they, currently can't or won't ever be able to, pay back.
There are many problems with the student loan system and even the concept of student loans in the first place, but this is not a very good way to fix them. Much better would be to scrap fees for UK students entirely and instead roll the costs into taxation - you could even have it as a graduate tax if you wanted to.
Graduates should not have to pay more than was borrowed if they are free of this burden they surely eventually pay it back in taxes by becoming successful in their chosen field of work. I think in this case short-term pain for the Government but a long-term gain.
I'm unsympathetic to those who take on a loan without considering how they will pay it back. However, there are egregious examples of crippling debt that look very much like exploitation.