Keir Starmer promises to look at making student loans system ‘fairer’
Financial Times
February 25, 2026
AI-Generated Deep Dive Summary
Keir Starmer has pledged to examine how to make the UK’s student loans system fairer, responding to pressure from Kemi Badenoch, a prominent MP, who is advocating for reduced interest rates charged to graduates. While Prime Minister Rishi Sunak has reportedly resisted calls to lower loan interest rates in recent months, there are growing demands within Labour ranks for an alternative approach to address the financial burden on students. Starmer’s commitment comes amid ongoing debates about the fairness and sustainability of the current system, which has seen student debt levels rise significantly over the years.
The issue has gained traction due to rising concerns about the financial strain placed on graduates, particularly as interest rates on loans accumulate over time. Critics argue that the current system disproportionately affects those from lower-income backgrounds, who are more likely to take out loans but face longer-term repayment challenges. This has sparked calls for reforms that would make the system more equitable and sustainable.
Some Labour MPs have proposed alternative solutions, such as increasing government subsidies to reduce reliance on loan financing or restructuring repayment plans to better align with graduates’ financial circumstances. These suggestions aim to alleviate the immediate burden on students while addressing systemic issues in the education funding model. However, there are also concerns about the broader economic implications of any changes to the student loans system, particularly its impact on public finances and long-term investment in higher education.
From a business perspective, this debate matters because education is a key driver of economic growth and innovation. A fairer student loans system could help ensure that more individuals have access to quality education, which would ultimately benefit businesses by fostering a skilled workforce. Additionally, addressing graduate debt could enhance consumer spending power and reduce inequality, both of which are critical factors in maintaining a healthy economy.
The outcome of these discussions will shape the future of
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Originally published on Financial Times on 2/25/2026