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Student Loan System 'Not Fit for Purpose' – Middle-Income Families Paying the Price

ended 05. August 2025

As families prepare to send their children off to university this autumn, serious cracks are emerging in the UK’s student loan system — particularly around maintenance loans.

The household income thresholds are now so low that very few students qualify for the full maintenance loan. A household income of around £62,000 — typical for two full- time working parents or one higher earner — is enough to be classed as “too wealthy” for full support. Yet that income leaves little spare room to fund a child living independently, especially amid a cost-of-living crisis.

The result? Many parents feel compelled to financially support their adult children — often at significant personal cost. And for those students whose parents can’t or won’t help, the risk is being priced out of university altogether or juggling long hours in part-time work, which can affect their studies and future prospects.

We want your views:

Is the current student finance system fit for purpose?

Are today's income thresholds outdated and unfair?

What advice would you give families trying to navigate this broken system?

Should we be more honest about the hidden parental burden?

3 responses from the Newspage community

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Editor
Scott Gallacher
Director at Rowley Turton
The student loan system is broken. Almost none of our clients' children qualify for more than the minimum maintenance loan. I often tell parents not to bother completing the household income section of the student loan formd — it’s a waste of time for most middle-income families.

It’s the squeezed middle that’s hit hardest. A household earning £60,000–£70,000 — which could just be two parents in decent jobs — is classed as “too wealthy” for full support. But that same family is expected to find at least £20,000+ to support an adult child at university, on top of the student’s £50,000 debt.

We already have clients encouraging their children to go straight into work after A-levels rather than take on that financial burden. For many, university now feels less like an opportunity — and more like a luxury they just can’t justify.
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Samuel Mather-Holgate
Managing Director & IFA at Mather and Murray Financial
If you earn a modest-decent wage, the student loans system acts as a significant tax on your earnings, pretty much for life. Those on lower wages will not have to pay back their loans, and those earning mega bucks will pay of off relevantly quickly. However, if your earnings are stuck in the middle, your repayments will barely cover the interest. The amount needed and the interest levied needs to be reviewed as the viability of doing a degree considered or a Uk brain drain will ensue.
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Editor
Tony Redondo
Founder at Cosmos Currency Exchange
Reform is urgently required as the UK student loan system is rigged and completely unfit for purpose. Maintenance loans fall far short of modern-day living costs, and the £62,000 household income threshold for full loans is seriously outdated, further squeezing middle-income families at a time when the tax burden is at its highest since the 1940s. My clients are increasingly exploring overseas universities and bursaries for their children’s university education. The system assumes parental support, but this hidden burden needs honest acknowledgment. Without inflation-linked thresholds or higher loans, access to university suffers.