The Treasury select committee has launched an inquiry into student loans, with its chair Meg Hillier warning that young adults in the UK face a 'perfect storm' of economic challenges. The cross-party investigation comes as the government considers ways to ease the burden on graduates, amid growing backlash over high interest rates and hefty repayments.
Hillier, the Labour MP for Hackney South and Shoreditch, said the burden of student loans is part of a wider squeeze facing people in their 20s and 30s. She cited the high cost of housing, inadequate pension saving, and the threat to jobs from artificial intelligence as compounding factors. 'Every government will make what seem like rational decisions in their own silo,' she said. 'But cumulatively, the 20-to-30 generation has had a lot piled on them. It's about fairness in the end.'
The inquiry follows Chancellor Rachel Reeves's decision in her November budget to freeze the threshold at which student loan repayments begin for three years from 2027, which reignited anger over the system. The select committee is now asking people to share their experiences through an online portal.
Hillier highlighted the impact of high housing costs on young people, noting that in her constituency, two-bedroom flats cost £650,000 or more. She suggested this contributes to falling birth rates and school closures in London. She also warned that many young people are struggling to save for pensions, storing up future problems. 'If people aren't paying into their pensions, in years to come, the taxpayer will be either picking up the pieces or you have a lot of pensioner poverty,' she said.
The unemployment rate is close to a five-year high, with young people bearing the brunt. Hillier argued that the nation has a clear incentive to help younger workers, as they will be the taxpayers supporting a growing elderly population. 'You've got the demographic timebomb,' she said. 'So we've got an interest in investing in these young people.'
