‘It’s a complete scandal’: Graduates accuse government of acting like ‘loan sharks’ over student lending
A group of graduates dressed as sharks said they were “suffocating” under the weight of student debt, accusing the government of acting like “loan sharks” as they protested the student loan system in front of parliament.
The demonstration, organized by the National Union of Students (NUS) outside Parliament House on Wednesday, comes as student loans, particularly “Schedule Two” loans and the interest attached to them, come under increasing scrutiny.
Wearing shark suits as well as masks of Chancellor Rachel Reeves, the protesters demanded an end to the freeze on repayment thresholds announced in the last Budget, a cap on these repayments and a wider debate on interest rates.
The repayment threshold, which is set to rise to £29,385 in April 2026, will be frozen for three years rather than rising with inflation each year. Graduates begin paying back nine percent of their income above this threshold.
The freeze means more graduates will start making repayments sooner than they would if the threshold were to rise with inflation.
Martin Lewis criticized the freeze but Ms Reeves argued the overall student loan system was “fair and reasonable”.
At the protest, NUS president and University of Birmingham graduate Amira Campbell, 24, said she currently owed more than £50,000 in student debt and described the situation as a crisis “where the country is sleepwalking”.
he said Independent: “We have 17- and 18-year-olds who are being told by their parents, schools and governments that they need to go to university, develop their skills and become part of this country’s workforce.
“Then they go to college, come out the other side, and they’re having trouble finding a job. They can’t get into the housing market. They want to start a family, but they can’t afford it.
“Meanwhile, they watch every month as money is transferred from their bank accounts to these student loans that they have no choice but to take on.”
Of the nature of the protest, he added: “We believe the government is acting a bit like a loan shark when it comes to student loans.”
Alex Stanley, 23, who graduated from the University of Exeter in 2023, said the current system means “young people are punished for their ambitions”.
he said Independent: “I borrowed £50,000 and now owe £62,000. £7,000 of this was accrued while I was still a student.
“This is a complete systemic scandal. When the Conservative Party tripled tuition fees in the previous government, they assured young people they would never have to look at this debt. This was unrealistic in many ways.
“But the truth is that this is a promise that is no longer kept.”
Alex said the credit system heavily favors those whose parents can’t pay their fees upfront, because interest rates mean the longer it takes to pay off your debt, the more you have to pay.
While an undergraduate student is studying, interest will be added to their loan at the rate of retail price index (RPI) inflation plus three percent. Once they graduate, RPI inflation rate plus interest of up to three percent is added depending on how much the graduate earns.
Graduates said the repayments they were able to make were insignificant compared to the interest added to their debts.
“This is a very regressive system,” Alex said. “It’s important to note that many people are talking about this as if it were a graduation tax.
“But really, for the majority of us and the middle class, it’s just a graduation tax, because the richest can pay their way out of the system as if it were a one-time bill. The rest of us face a system where debt spirals and the burden on them increases.”
About this “burden”, Alex said that debt prevents graduates from building their lives and limits their ability to plan for the future.
“The truth is it feels like we are drowning,” he explained. “I owe £62,000. That’s £12,000 more than I expected. And that’s the case for many young people. The average graduate has debts of £53,000.”
“We are talking about a generation that is already having difficulty taking out a mortgage on a house and starting a family.
“And that’s before we even start talking about those struggling to pay their rent and bills. All of this adds to the ever-increasing debt burden.”
A government spokesman said: “We are aware of the concerns among borrowers. The student loans system was designed and implemented by previous governments. We are taking the tough but fair decisions needed to protect taxpayers and students now and for future generations of students and workers.”
“We have set an ambitious target for two-thirds of young people to achieve a degree or gold standard apprenticeship by the age of 25, and we are supporting students with university costs by increasing care credits each year in line with projected inflation and reintroducing targeted care grants.
“The student finance system is heavily subsidized by the government and low-income graduates will always be protected, with outstanding loans and interest canceled at the end of the repayment period.
“It’s right that those who can repay should do so, and in this system where repayments are determined by income rather than total borrowing, graduates who earn some of the highest salaries in the country contribute more to repaying student loans than workers who didn’t go to college or those who graduated with the lowest salaries.”
