On average, students now leave university with just over £50,000 in student loan debt. Repayments are income-contingent: many graduates will repay little or nothing, while others repay 9% of their income above a threshold for decades, often watching the outstanding balance rise. That design has led some to argue the system is unfair and to argue that students were mis-sold loans whose terms have shifted over time.

In this episode, Helen is joined by Nick Hillman, Director of the Higher Education Policy Institute and a former government adviser during the introduction of Plan 2 in the early 2010s, alongside Kate Ogen, Senior Research Economist at IFS, to unpack how the student loan system works in practice. We explain how the system has evolved across cohorts, how it differs across the UK, and when it makes sense to think of student finance as a loan versus a graduate tax. We also look at who repays what across the earnings distribution, how repayment thresholds shape lifetime payments, what changed with the move to Plan 5, and what recent policy choices mean for graduates and for the public finances.

Finally, we discuss competing claims about “fairness”, between graduates and taxpayers, among graduates, and across generations, and ask the core question: who should pay for higher education?

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