Why left and right are wrong on universities

Rather than abolishing fees or cutting places, we should rebalance the system in favour of the poorest

Today on Arguably, I explain how to reform England’s broken university funding model. To read it now, become a paid subscriber or sign up for a seven-day free trial.

(James Jiao/Shutterstock)

Political opinion changes gradually and then suddenly. Back in the early 2020s, I would routinely point out how England’s student loan system had become a form of stealth taxation – with graduates on modest salaries paying marginal rates above 50% – but the issue went almost unnoticed at Westminster. That finally changed this year. Labour’s decision to freeze the Plan 2 repayment threshold at £29,385 for three years, rather than increasing it in line with inflation, saw the government rightly accused of behaving like a loan shark.

Influenced by a cohort of MPs young enough to still be repaying student debt (which currently averages £53,000), almost everyone now agrees the system is broken. Lucy Powell, the new Education Secretary, has said reform is “very much top of my in-tray”. Nick Clegg, who oversaw the introduction of £9,000 tuition fees as deputy prime minister, now believes that “graduates quite rightly feel very sore, because they’re sort of running to stand still”. And more than 120 MPs and peers have written to Chancellor John Healey demanding an “urgent review” of a model that places an “unsustainable burden on the next generation of workers”.

They’re right to be exasperated. Under the current system, owing to high interest rates, a graduate needs to be earning at least £66,000 before they even begin to reduce their debt. At the same time, our university sector is in crisis, with department closures at major institutions and 9,606 jobs cut in 2024/25 alone (public funding has collapsed while fee levels have stagnated). But though long on critique, most have been short on solutions. In this post I’ll outline the best way to reform the funding system and explain what both the left and the right get wrong about universities.