Scrap the debt, we need funding not fees

Becca Bayman, Liverpool Socialist Students

Keir Starmer’s government has announced that interest rates on student loans will be capped at 6% from September 2026. This decision is intended to calm growing outrage among students and graduates facing the rising cost of higher education. This small concession falls far short of addressing the actual problems with the system of higher education funding.

The cap will apply to ‘plan 2’ loans, taken out by 5.8 million students in England and Wales between 2012 and 2023. These graduates have massive debts, blown up by high interest rates meaning unless you are a high earner, the total amount owed increases even as it is being repaid.

While the interest cap is welcome, it is not a relief for students or graduates. The Institute for Fiscal Studies has said the concession will reduce interest for higher-earning students but will do nothing for lower-earning students who will spend a lifetime stuck with a stealth tax paying off their debts. During a burgeoning youth unemployment crisis, where many young people are struggling with precarious employment and low wages, the student finance system continues to place a disproportionate burden on the poorest graduates. As the government has frozen repayment thresholds, by the end of this parliament, people working fulltime on the minimum wage will have to pay.

Government ministers have defended the cap as a way to protect borrowers from potential increases in inflation ‘due to the situation in the Middle East’. However, as household bills increase due to Trump’s war, this interest cap will not stop the working class from having to pay. Starmer’s government made it clear it was not on the side of students and young people when tuition fees were increased last year. As things stand, undergraduate fees will be over £10,000 per year by 2029, and with it, even more debt.

The National Union of Students declared the cap a “huge win”. It definitely proves the government is under pressure. A mass mobilisation of students and young people fighting for free education could win more. This cap is not enough to lessen the decades of debt that will be carried by millions of us. Socialist Students’ Funding Not Fees campaign calls for the scrapping of all tuition fees and the cancellation of student debt. Funding for our education system should come from taking the wealth off the super-rich, not students and workers.