Student Loan crisis here to stay

The UK recently woke up to the fact that we’re facing a Student Loan crisis. The crisis is that interest on debt is so high most students will never pay their loan off, and will suffer a massive tax on their earnings as a result.

If you were wondering what Labour will do to fix this issue, the answer is…

*DRUM ROLL*

…sweet fuck all:

Crisis

Trevor Phillips put the following to the education secretary:

What are you going to do to help the graduates stuck on the so-called Plan 2 loans, which came in in 2012, and which means that some of them… owe more than they’ve borrowed?

Honestly, you can just stop reading at this point, because the answer is ‘nothing‘.

Here’s how Phillipson responded:

 Look, I recognise the challenges of the system that’s there. I would just point out, I gather the Tories have had something to say about this today.

Phillips quite obviously agrees with what the Tories have said, because he noted:

They’re going to do what sounds completely reasonable, which is not to punish people for getting a degree.

Phillipson hit back:

Which might sound a bit more reasonable if they hadn’t been the people that had introduced this system in the first place.

Blaming past governments is fine when you’re trying to get elected, but it has a limited shelf life when you’re in power.

If Phillipson said ‘the Tories caused this mess, but we’re going to fix it’, then fair enough; what she actually said was ‘the Tories caused this mess, and we’re going to ignore it and hope no one blames us‘.

In terms of actual solutions, Phillipson did say they plan to bring in “maintenance grants for less well-off students”. When asked if this Labour government will provide relief to graduates who’ve been stuck with “massively expensive loans” for 12-14 years, Phillipson said:

Look, I get the problem. I see the issue. In reality, as a government, you have to look at a question of priorities and what you can do and how fast you can do it… Given the shape of what we have in the public finances, this is really hard. But I do find it a bit rich that the people who design-

Good lord.

YOU.

ARE.

IN.

GOVERNMENT!

If you can’t come up with a solution, step down, because you’re clearly not up to the job.

Phillipson had a similar car crash on the BBC:

Student Loan tax

As HG wrote for the Canary on 18 February:

Martin Lewis has accused the Labour Party of turning student loans into a tax on young people.

At the Autumn budget, Labour froze the student loan repayment thresholds for Plan 2 loans at £29,385 from April 2026.

Advertisement

Lewis pointed out that this was either a targeted tax rise on young people, or a:

“retrospective rewriting of the terms of a private contract.”

HG added:

Rachel Reeves claimed the freeze was “fair and reasonable” – which is, of course, bullshit.

Mainly because rich kids who had the bank of mummy and daddy to pay their tuition fees up front are now exempt from this additional tax.

Advertisement

Essentially, if your parents are rich, you’ll earn a significant percentage more than your peers, even if you get paid the same. We could have flipped this and said ‘if your parents are poor you’ll earn less‘, but let’s face it — even moderately well off people can’t afford to pay their kids’ tuition fees up front.

As noted, this is not a new issue. Labour have had over a decade to prepare for this. It’s certainly the case that the 2019 Labour Manifesto was better than Starmer’s offering in that it set out to abolish future fees, but even Corbyn’s Labour didn’t have a plan for existing graduates.

A Labour problem

Every year, there are more and more people who are suffering this unfair tax.

And the more of us there are, the harder it will be for these coward politicians to ignore us.

Because I’m telling you now, I won’t be voting for any politician who plans to maintain a 9% tax on my salary.

Featured image via Trevor Phillips