• student fees;
  • loans;
  • repayment rates;
  • the ‘squeezed middle’;
  • fairness


From September 2012 most home undergraduates at English universities are being charged fees of £9,000 per annum. These are funded by a government loan, which attracts interest from the moment they start their course; after three years their accumulated debt exceeds £30,000. They can also borrow to cover their living costs, on the same terms, so that those studying in London can graduate with a debt of more than £50,000—although those from low-income families can obtain grants and universities are encouraged to provide bursaries and other support to students from underrepresented groups. Graduates start repaying their debts once their annual income exceeds £21,000—at a rate of 9% of the difference between their income and that figure: until the debt is fully repaid it continues to attract interest, by as much as three percentage points above the current inflation rate. Using data from a calculator on a government website, this paper shows that the highest-paid graduates pay back less than those on middle incomes: the ‘squeezed middle’ pays back more not only than those on low incomes but also the better-paid and those whose incomes increase more rapidly. This has differential effects according to occupation—and sex; and middle-income groups also contribute more to the costs of widening participation programmes, which all universities charging more than £6,000 per annum are required to fund.