Nearly half of working-class young people in England and Wales are deterred from pursuing university studies due to concerns about the rising costs and accumulating debt, according to recent polling. Research conducted by the Good Growth Foundation (GGF) found that 46% of 16- to 18-year-olds from lower-income households believe that university does not offer good value for money, primarily due to tuition fees and associated expenses.

By contrast, the perception of university’s value remains more favorable among wealthier families, with 60% of young people from higher-income backgrounds viewing a degree as worthwhile, and only 33% expressing reservations about the cost. Across all respondents, over a third (38%) reported being less likely to apply to university because of financial concerns.

Currently, universities in the UK can charge up to £9,535 annually for standard full-time courses. Despite this, the average debt for students who graduated in 2024 reached approximately £53,000. The government projects the total value of outstanding student loans will hit around £500 billion by the late 2040s, adjusted for 2023-24 prices.

In a recent policy update, the government confirmed it will raise tuition fees in line with inflation over the next two years, potentially pushing annual fees closer to £10,000. This announcement has prompted calls for reforms to the student loan system. Education Secretary Bridget Phillipson has indicated she will review student loans amid growing public concern over the financial burden on graduates.

The GGF has proposed a “Graduate Guarantee,” which would increase the income threshold for mandatory loan repayments from the current £29,385 to £33,542, effectively restoring the purchasing power of the previously set £25,000 threshold from 2018. This proposal also includes legally binding annual adjustments to the threshold, tied to inflation.

Louisa Dollimore, director of strategy at GGF, emphasized the importance of reforming the student finance system to ensure educational choices are guided by ability and ambition rather than debt fears. She stated that raising the repayment threshold would immediately alleviate financial pressures on graduates and help student finance serve as a tool for opportunity.

Responding to the concerns, a government spokesperson acknowledged the anxieties surrounding loan repayments and reiterated ongoing efforts to improve the system. Measures include restricting poor-quality courses to protect students’ investment, reintroducing targeted maintenance grants, and capping interest rates on student loans to make higher education more affordable and accessible.