Late last year, the UK government announced significant changes to student loans and the way that they’re repaid. A freeze on the Plan 2 student loan repayment threshold, means that those who took these loans will start paying back the debt sooner as well as repaying more annually and over their lifetime. The changes have caused widespread anger and many argue the decision to freeze the threshold is a breach of contract on the basis that the government misrepresented the terms of the loan they signed up to.

Further, there is serious concern that the move will widen existing inequalities between people from differing socio-economic backgrounds. These inequalities are already baked into the UK’s higher education system and are carried through into adult life.

Under international human rights law – specifically the International Covenant on Economic, Social and Cultural Rights (1966) – countries have an obligation to make higher education progressively free. UNESCO notes in its 2026 Global Education Monitoring Report that the UK has one of the highest levels of student debt globally and that means-tested maintenance loans usually meet only half of living expenses while at university. Average individual debt stands at approximately £50,000. The accumulation of debt, UNESCO says, ultimately discourages enrolment and leads to a higher dropout rate of students from disadvantaged and marginalised groups.

In response to public outcry over the threshold freezes, the Treasury Committee has launched an inquiry on student loans to examine the overall fairness of the system for graduates, including the decision to freeze the repayment threshold. The UK Chancellor, Rachel Reeves, conceded in March that the student loan system is ‘broken’ but ‘not a priority’, arguing that tackling other issues such as NHS waiting lists, child poverty and defence spending must take precedence. The Department of Education told Global Insight that ‘threshold freezes have been introduced to protect taxpayers and students now, alongside future generations of learners and workers’ and highlighted government plans to reintroduce maintenance grants for higher education in 2028.

Rising anger towards the government’s decision to demand higher repayments from graduates also stems from frustration towards its handling of disruptions to university education by widespread strike action and the Covid-19 pandemic. Over 200,000 former students have joined a group litigation action against universities, who claim they breached their contracts with students from 2018 onwards by cancelling in-person classes and restricting access to facilities such as science labs and art studios. The case follows a £21m settlement reached between UCL and its former students over Covid disruption.

Shimon Goldwater, a partner at Asserson who acts for the Student Group Claim, says universities still charging students full tuition fees during the Covid-19 pandemic was ‘wrong and fundamentally unfair’ when considering the difference in educational value provided and the ‘distress and disappointment’ caused. ‘People want compensation for thinking they were going to get a normal university experience but instead were stuck staring at a laptop in their bedroom for months on end,’ he says.

Universities UK, which represents the higher education sector, says the Covid-19 pandemic ‘threw two years of unprecedented challenge at universities and their students’ and that universities ‘adjusted quickly and creatively to allow students to complete their degrees’.

James Williams, a barrister at Henderson Chambers and officer of the IBA Class Actions Committee, says the student group action is a rare example of a consumer claim, which usually involve much smaller amounts of money, which makes practical sense to pursue as a group litigation action. ‘University tuition fees and buying a car are probably the largest outlay any consumer is going to make, with a possible exception of buying a house, during their lifetime,’ he says. ‘Those are more or less the only claims where the amounts of money in issue for each claimant are sufficiently large to make an opt-in group litigation order a feasible way of proceeding for the lawyers and funders.’

If the claim is successful, it is unclear whether the government would step in to help universities with the payments, which are currently facing intense funding pressure. The Office for Students predicts that almost 25 English institutions could be at risk of closure in 2026, as the number of UK universities facing financial shortfalls continues to grow. There appears, however, little political will for the government to intervene. Campbell says that the government tightening restrictions for high-paying international students will only deepen the funding crisis in the sector. ‘International students’ extortionate tuition fees have been treated as a sticking plaster over our universities that have been absolutely bled dry of public funding,’ she says, before adding that ‘every time the government creates policy that makes it harder for international students to study in this country, universities are plunged further into crisis’.

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