Rachel Reeves under pressure to U-turn over 'loan shark' stealth tax in blistering on-air takedown

He said a single year of his degree cost more than the entire annual tuition bill faced by students at Oxford, Cambridge or the LSE when fees were free.

“Do you think that’s fair?” he asked.

Mr Dugmore explained that he left university with around £37,500 in debt, but the most striking figure was the interest.

Since 2012, he said, the interest alone on his loan had reached £32,000. He added: “Was it mis‑sold to me when I was told it would cost nine grand a year? Yeah, I’d say so.”

He accused the Government of unilaterally rewriting the terms graduates signed up to, highlighting that the repayment threshold, originally designed to rise with earnings, has eroded to the point where someone earning the living wage for a full‑time job now sits just £500 below the repayment point.

Mr Dugmore said: “Basically, if you have a job, you’re going to pay it. It shouldn’t be like that.”

“The government changed the terms of the loan that I agreed to. They did it unilaterally. I’d call that loan sharking.”

Mr Dugmore also attacked the system as inherently regressive, noting that wealthier families who can pay fees upfront avoid interest entirely.

He said: “If you’re rich enough, you don’t pay the same as me. Is that fair? No, I don’t think it is.”

His intervention has sharpened the political debate around Plan 2 loans — and placed Rachel Reeves’s defence of the system under renewed scrutiny.

The National Union of Students condemned the Chancellor’s stance, with its Vice President for Higher Education, Alex Stanley, saying: “The student loan system isn’t working for anyone.”

Mr Stanley argued that the system fails students relying on foodbanks, graduates making substantial monthly repayments without reducing their principal, and even the Treasury as the overall loan book continues to balloon.

He accused Ms Reeves of treating graduates as “political pawns”, pointing to the Autumn Budget decision to freeze repayment thresholds from 2027 — a move he said would add “hundreds of pounds” to annual repayments for Plan 2 borrowers.

He warned that graduates had entered into “complex contractual arrangements” with the Student Loans Company only to see the terms repeatedly altered, turning their loans into “a political football impacting our bank balances each month”.

The NUS says students and graduates are now mobilising as a political force.

Mr Stanley cited YouGov polling showing growing public appetite for radical measures, including full cancellation of student debt.

He urged Ms Reeves to pursue “genuine solutions” rather than defend a system many now view as fundamentally broken.

And he delivered a pointed message to ministers who themselves paid nothing for their degrees: “Anyone who went to university for free should not be able to call the current system fair.”