Good morning.
In November, Rachel Reeves tucked a freeze to student loan repayment thresholds into her autumn budget, to little fanfare. The threshold, normally expected to rise each tax year to account for inflation, would rise this year, and then stay frozen until 2030, dragging people on lower salaries into repayments earlier.
Sadly for her, the change has not gone unnoticed. Backlash against the plans snowballed in recent weeks. Critics point out the 5.8 million students who took on “plan 2” loans between 2012 and 2023 are already drowning in debt, while others argue the changes mean students have been fundamentally mis-sold loans, as the coalition government promised the salary threshold would rise annually in line with earnings when they were first introduced.
Now even the Tories, largely responsible for the state that the plan 2 repayments are in now, are arguing for a more just system – and the government has said it will look into making the loans fairer. But what would that look like? And is it likely? I spoke to the Guardian’s money and consumer editor, Hilary Osborne, to find out. But first, the headlines.
Five big stories
Middle East | A torpedo fired by a US submarine sank an Iranian warship off the south coast of Sri Lanka as the Trump administration followed through on its threats to destroy Tehran’s military and political leadership.
UK news | A former Labour adviser married to a Labour MP is among three men who have been arrested on suspicion of spying for China.
BBC | The BBC is to call for an end to political appointments to its board as part of sweeping changes designed to protect its independence.
Jeffrey Epstein | The House oversight committee has voted to subpoena US attorney general Pam Bondi to answer questions over the justice department’s handling of files related to the Jeffrey Epstein.
Immigration | Up to 21,000 asylum seekers who have waited for a year for their claims to be processed could be allowed to enter the jobs market so they can support themselves, the Home Office said, as part of a package of measures to be announced on Thursday.
In depth: ‘It’s no longer the case that university guarantees a well-paid career’
Not everyone leaving university will get a high-paid job. Photograph: PA Images/Alamy
Hilary Osborne finished university with a £3,000 loan – a lot smaller than the £20,000 debt I left with, and a fraction of someone on a plan 2 loan today, who will pay an average of £56,000 over their lifetime when you account for interest. And yet, she didn’t feel great about it.
“I was lucky because the tuition fees were free. I got a maintenance grant as well. But my family weren’t able to give me much money,” says Hilary. “I used to have sleepless nights when I was at university. I worried about money so much.”
So she can’t imagine how it must feel for some graduates now, who look at their payslips every month and see the interest added dwarfing the already huge sums they owe.
“I found it psychologically very difficult to have debt,” says Hilary. “And we’ve heard the same from readers. One nurse recently told us: ‘I know that I’ll never pay it all off. But when I see the statement and it’s gone up by more than I’ve paid off, I find that really difficult.’”
One argument my generation was given to justify increases was that we would all make more money off the back of doing degrees, so it was only fair to pay towards that privilege. Hilary doesn’t think that argument has proved to be correct.
“As a country, we’ve moved to a situation where lots of jobs that weren’t graduate jobs, now are. It’s no longer the case that if you’ve gone to university you walk out as a lawyer, or a surgeon – something that’s a guaranteed well-paid career,” she says.
Add the current context for students in England, where house prices have shot up, and job prospects for many graduates look bleak, and “it makes it feel doubly unfair,” Hilary says.
Unfair in so many ways
Hilary points out that as a country our loans system is not as punitive as it could be. Repayments are pegged to your earnings rather than being set at a flat rate for every graduate. And failure to repay doesn’t go on your credit file, or trigger debt collection services.
“But it all adds up, the worry that’s attached to it. It’s kind of difficult to reassure people,” she says.
One of the problems for people on a plan 2 repayment plan is that their loans are likely growing much faster than they can pay off. While students only ever pay a maximum of 9% of their salary towards their student loan, the interest rate varies. Graduates earning over £51,254 are seeing interest added to the loans at a rate of 6.2% a year.
“We’ve had a lot of this talk over the past few years, where people said ‘don’t worry about the interest rate. Just focus on the fact that you’re only paying 9% of your salary … It’s not like a mortgage where you have to pay the whole thing off, and the higher interest rate means you’ll end up paying it off forever’. That was a comfort that people were being given,” says Hilary.
But while those on plan 2 have their remaining balance wiped after 30 years, many graduates say they are on target to repay something like £100,000 to £150,000 over their lifetimes, when the sum they borrowed was closer to £60,000 to £70,000.
It doesn’t help, either, that the rate of interest linked to student loans is linked to a controversial rate of interest – the retail prices index – which fluctuates wildly and tends to run higher than other inflation figures. In August 2024, RPI meant students were paying as much as 8% interest on their loans. The government is moving away from using RPI as its inflation measure for other areas of spending, precisely because of these shortcomings.
As the Guardian’s money editor, Hilary often hears from consumers who have been ripped off by retailers, and she says she has sympathy for the idea that students have been ripped off here. “People were told [loans] would go up in line with earnings and actually in the legislation it says that as well, but in the terms and conditions it says the regulations may change from time to time,” she says.
“If a high street bank said [that] … I would say that was possibly an unfair contract – because you’re signing up to something that someone might change at any time, and you haven’t got the information to know whether that’s going to be a good or a bad thing. But the only way you can get the loan is to sign it.”
Worse than the US
In swotting up for this, I was surprised to find that the US system of loan forgiveness – even under President Donald Trump – looks far more progressive than the UK. In the US, firefighters, teachers and social workers have had their loans written off; parents will see monthly deductions to their debt; and there exists a rule which means no one should see their loan increase while they’re making repayments.
“I do think it is really interesting the way they’ve tackled it and I think there are things we can learn,” says Hilary. She is particularly taken by the idea that students shouldn’t have to see their loans grow while they’re re-paying, and it reminds her of something she was shocked by when first entering the loans system herself.
“I naively had this idea that while you were focusing on your studies, when maybe you weren’t working, that you could keep what you borrowed down. But you’re actually already racking up interest on your debt, even then. And that seems really unfair. It just means it feels like you’re always running to catch up,” she says.
Other times that graduates continue to accumulate interest, despite not paying, include while parents are on maternity leave – and this is a notoriously expensive time, with the UK offering some of the lowest rates of paid maternity leave relative to earnings in the OECD.
A possible review
Last week, Keir Starmer said the government would look into ways to make the student system fairer. That’s something Hilary thinks is now inevitable.
“It’s got such a head of steam,” she says. “There is time to do the sums again and think, ‘is the best thing just to unfreeze the freezing?’”
But one thing that makes the system so unfair in England and Wales – that the amount people repay is based on when they were born – might make it harder for the government to do much more.
“I suppose if you start being too generous on this loan, then people are going to start calling you to do different things [for their loans] as well, aren’t they?” she says.
But she does think something has to give. Hilary’s generation came of age just as the New Labour government was coming into power, promising that 50% of young people would end up at university. As a result, she and her peers became happily accustomed to believing their children would all have the chance to go to university if they wanted. But that may no longer be the case.
“It does feel [the level of debt has gone] kind of too far. If, as a country, we want people to have degrees to do some of these jobs, then we should be picking up some of the tab for it.”
What else we’ve been reading
Song thrushes can mimic other species, as Kevin Rushby discovered. Photograph: FLPA/Alamy
Is it a truism that as you get older you suddenly find yourself drawn to bird-watching? I really enjoyed Kevin Rushby on bird calls on a North York Moors walk. Martin
I often find myself using AI, finding it helpful, then wondering if it’s actually helpful or if I should be using it. Rhik Samadder sums up the conflicts brilliantly in this new Guardian US AI for the People newsletters series, as he tries to replace a therapist with a chatbot. Poppy
For Collegetown Magazine, Dylan Alphenaar takes a deep and disturbing dive into a mostly forgotten hostage-taking and shooting situation that unfolded at a college in Iowa in the 1980s. Martin
Such is the pluralism of this paper that I was incredibly taken by Rutger Bregman’s call to action in our opinion pages – asking us to quit ChatGPT right now. He says ChatGPT is funding Trump, and assisting his ICE raids. Poppy
Shaad D’Souza interviews Robyn for The Face as she prepares to release her first album for eight years. Martin
Sport
Bukayo Saka celebrates scoring Arsenal’s first goal. Photograph: Tony O Brien/Reuters
Football | Arsenal seized control of the Premier League title race as Bukayo Saka’s goal secured a priceless 1-0 win at Brighton and Hove Albion and Manchester City could only draw 2-2 at home to relegation-threatened Nottingham Forest.
Cricket | New Zealand opener Finn Allen smashed the fastest-ever century in a T20 World Cup game to help the Kiwis defeat favourite South Africa by nine wickets in the first semi-final on Wednesday.
Golf | Luke Donald will captain Europe’s Ryder Cup team for a third time and go for a historic three-peat.
The front pages
Guardian front page, 5 March 2026 Photograph: The Guardian
“At least 87 dead as US sinks Iranian ship near Sri Lanka,” is the lead story on the Guardian on Thursday. “Warzone widens as US sub torpedoes warship off Sri Lanka,” has the i. “Trump’s war goes global,” says the Metro, while the FT has “US broadens war on Iran to high seas,” and the Telegraph: “Miliband led revolt to Trump’s Iran war.”
“Labour ensnared in China spy probe,” says the Mail. “Allies round on ‘weak’ UK,” has the Times. “Greek cops wanted £50k Maguire ‘bribe’” is the splash at the Sun. “Weak, weak, weak!” says the Express. “MP: I’ve never suspected my husband,” is the lead story at the Mirror. Finally, the Star with “The ‘spy’ who loved MP.”
Today in Focus
US president Donald Trump, left, and British prime minister Keir Starmer look at each other as they shake hands during a press conference at Chequers near Aylesbury, England, 18 Sept., 2025. Photograph: Leon Neal/AP
Starmer, Trump and the shaky ‘special relationship’
When the US and Israel unleashed coordinated strikes on Iran, Keir Starmer initially held back on allowing the US to use UK military bases. But then, on Sunday evening, the prime minister agreed that the US could use two of its military bases – but maintained that the UK did not believe in “regime change from the skies”. Rafael Behr speaks about why Donald Trump’s war on Iran presents a strategic dilemma for Keir Starmer
Cartoon of the day | Nicola Jennings
Illustration: Nicola Jennings/The Guardian
The Upside
A bit of good news to remind you that the world’s not all bad
‘“There was a ship,” quoth he’: Iron Maiden’s Bruce Dickinson performs in 1985. Photograph: Mark Downey/Corbis/Getty Images
Ahead of World Book Day on Thursday, Guardian music writers pick out the musicians whose literary references illuminated them and got them reading great works.
Katie Hawthorne talks about re-discovering the novel Charlotte Sometimes via the Cure, and it holding a mirror to her increasingly uncertain sense of self. Lindesay Irvine talks of discovering the works of Antonio Gramsci via the work of Green Gartside AKA Scritti Politti, saying the literature the music referenced ultimately “began my route to an MA in continental philosophy”.
Saul Bellow, Grace Paley and Joe Orton get namechecks, and Matt Mills reveals that if Iron Maiden hadn’t recorded their 13-minute epic rendition of Samuel Taylor Coleridge’s The Rime of the Ancient Mariner he might have failed his English A-level. And they used to say that rock’n’roll was a bad influence.
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Bored at work?
And finally, the Guardian’s puzzles are here to keep you entertained throughout the day. Until tomorrow.
