More than half of students who took out loans to help pay for their degrees did not fully understand the terms and conditions of repayment, a parliamentary inquiry has found.
More than 52,000 people responded to the Treasury Committee’s call for evidence on experiences with student loans, one of the highest response rates to a select committee inquiry ever recorded.
It comes after campaigners highlighted how years of spiralling inflation have left students unable to make a dent in their repayment plans, which are pegged to the retail price index (RPI) rate of inflation plus up to three percentage points, depending on how much you earn.
Of the 49,357 respondents who have taken out student loans, 28,275 said they did not understand the terms and conditions of the plans beforehand.
Graduates previously told The Independent that under the current system, they will never be able to pay off their student loans.
Pressure has been growing on the government to reform student loan repayments after chancellor Rachel Reeves opted to freeze the student debt repayment threshold at the Budget in November.
The inquiry asked for anyone over the age of 16 to contribute their experiences and views on student debt directly through an online survey. Of the respondents who had taken out a loan, 40,373 said the financial impact of repaying their student loan, combined with the level of tax, was worse than they expected, and 45,843 said they think the level of interest and repayment terms were not reasonable.
The responses also highlighted how young people feel their student loan debt is holding them back from key milestones, with 34,555 saying that their repayments had a material impact on their financial planning for the future.
More than 25,000 respondents said if given the choice again, they would not take out a student loan. But 45,066 said they would not have been able to attend higher education without one.
Chair of the Treasury Committee, Dame Meg Hillier, said the responses had shown the “massive scale and strength of frustration and upset”.
“Let me say very clearly to those who filled out our survey: the message has landed with the committee,” she said in a statement. “While not everyone has had a bad experience, the massive scale and strength of frustration and upset is powerful and, as MPs, we must listen.
“It’s imperative for the prosperity of our country that people currently in their 20s and 30s feel incentivised to work hard and build successful careers. Unfortunately, what these findings tell us is that far too many young people feel overburdened and demoralised by their student debt.
“My committee will now spend the coming weeks looking at the different options available to the government before making some recommendations for change.”
Ollie Gardner, founder at campaign group Rethink Repayment, said the results show the student loans system “urgently needs reform”.
“The Treasury Committee’s survey sends a clear message to politicians: the punitive student loan system is holding young people back, and it urgently needs reform,” he said.
“It should deeply concern all of us that student loan repayments are having such a significant impact on young people’s finances. They are preventing many from reaching key life milestones such as buying a home, starting a family and saving for retirement, simply because they chose to pursue higher education.
“To avoid the long-term economic consequences of holding back an entire generation, Rethink Repayment is urging politicians to reform the system. Millions of young people’s ability to build a future in the UK depends on it.”
A Department for Education spokesperson said it recognises graduates have “concerns” about loan repayments but insisted the system “protects lower-earning graduates”.
“We inherited the current system and have taken steps to make it fairer – including raising the repayment threshold for the first time since 2021 and capping maximum interest rates this year to protect graduates from rising costs,” they said.
“We have also reintroduced targeted maintenance grants to expand opportunities for people from all backgrounds to go to university or college.
“The student finance system protects lower-earning graduates, with repayments linked to income and any outstanding balances and interest written off at the end of repayment terms.”
