Hundreds of thousands of sixth formers in England are due to receive their A-level results this week, with many expecting to continue on to higher education courses. A new analysis suggests many of them will graduate into a system of debt and taxation markedly harsher than the one their parents' generation faced.
The report was produced by the Intergenerational Foundation, a UK-based think tank established to promote fairness between generations, whose founders believe British policy-makers have given undue advantages to older generations at the expense of younger and future ones.
Debt loads climbing under Plan 5
The government is piling mountains of debt and higher tax rates on young people heading to university, according to the report. Its author, Toby Whelton, says those in England will face more extreme financial penalties than previous graduates, arguing that the cost of paying for university education has been shifted almost entirely onto current students, with the latest student loan package, known as Plan 5, which began in August 2023, meaning young graduates will struggle to save for house deposits or pension contributions, delaying their key milestones.
The analysis shows that amounts being repaid by today's graduates in England are more than double those paid under Plan 1, which was in place before the coalition government in 2012 raised annual undergraduate tuition fees from £3,375 to £9,000. The report estimates that average earners under Plan 5 will repay £56,240 over their lifetime, compared with £25,700 under Plan 1, while expected lifetime repayments for lower earners have risen from £6,430 to £42,070, expressed in 2026 prices.
“"By stealth and with minimal democratic scrutiny, successive governments have piled costs on to young graduates in the hope that nobody would notice." — Toby Whelton, Intergenerational Foundation”
The report also highlights how governments have whittled away at their contribution to higher education by steadily reducing the teaching grants paid to support universities, shifting more of the financial weight onto individual students rather than the state.
Tax rates and international comparisons
On top of repaying student loans at higher rates than previous generations, today's graduates also face effective tax rates above 50% when their income reaches higher brackets, according to the report, which describes this combination as historically high and disproportionate.
“"Plan 5 in particular has received far too little attention. It is a ticking timebomb, set to detonate as today's students enter the workforce and confront repayment terms harsher than those faced by previous cohorts." — Toby Whelton, Intergenerational Foundation”
Official figures back the broader picture of a system under strain. The value of outstanding loans at the end of March 2026 reached £295 billion, and the government forecasts the value of outstanding loans to reach around £500 billion in 2025-26 prices by the late-2040s, according to the House of Commons Library. Student loans in England are also large by international standards, with the latest OECD analysis finding that the average loan in England was substantially higher than in any other country included in the analysis.
There is a partial counterweight to the debt totals. The government forecasts that around 55% of full-time undergraduates starting in 2025/26 will repay their loans in full, more than double the forecast for the 2022/23 cohort of 32%, because of reforms to student loan repayments for new students. That improvement stems largely from Plan 5 lowering the income threshold at which repayments begin and extending the repayment window, meaning more graduates eventually clear their balance, even as the total sums many of them repay rise sharply.
For readers across continental Europe, where many university systems remain largely tax-funded with low or no tuition fees, England's loan-based model stands out as an outlier. The Intergenerational Foundation's warning adds to a wider debate in Britain, echoed by other think tanks such as the Higher Education Policy Institute, over whether a funding system built on individual debt rather than public investment can remain sustainable as the national loan book approaches half a trillion pounds.
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