Should Student Loans Be Taught in School?

In a previous post, the discussion centred around whether student loans are becoming a long-term added tax, and if they are still fit for purpose for young people considering university and future employment. This raises another important question: are young people being given enough financial education before making these decisions?

An interesting point raised by UCAS Chief Executive Dr Jo Saxton suggests that more could be done within the current education system. Speaking about how concepts such as percentages and compound interest are already taught in GCSE Maths, she argued that their real-world application should also be explored, particularly when considering that just under half of young people go on to university.

The comments, reported by Dan Haygarth (2026) in The Guardian, highlight the reality that young people can enter university and take on significant financial commitments without necessarily having a strong understanding of how borrowing works. Student loans can be complicated, particularly when it comes to interest, repayments and how long the balance may remain outstanding. Introducing these concepts through relatable, real-world examples at GCSE level could help young people make more informed decisions before entering university.

The question, therefore, is whether financial education should have a greater role within the current GCSE curriculum, helping to prepare young people not only for university, but for the wider financial decisions they will face throughout adulthood.

Should the current syllabus be adapted?

This is certainly a topic worth discussing. The decisions that can eventually lead to taking on a substantial loan often begin much earlier than the university application itself. At 16, young people are already choosing college courses and considering their future direction, before making decisions at 17 or 18 about whether to go to university, enter employment or pursue an apprenticeship.

But is enough being done to explain the financial implications that can come with these choices?

Michelle Roberts (2026) reported that 6.3% of university students dropped out during their first year, while Julia Bryson (2023) explored some of the main reasons behind this. Among the key reasons cited were mental health struggles, financial pressures and course misalignment. Looking specifically at the financial pressures within these figures could provide a clearer picture of whether young people are fully prepared for the financial commitment that university can involve.

Julia Bryson’s report found that financial distress accounted for 8% of students who dropped out of university. While this figure may not immediately appear significant, it represents a 3.5% increase since 2022. This raises an important question: could a better understanding of money before entering higher education help students prepare for the financial pressures they may face?

Those pressures may also come from immediate living costs rather than the long-term repayment of a student loan. Tuition fees and maintenance loans differ across England, Wales, Scotland and Northern Ireland, so taking England as an example, maintenance loans are partly assessed against household income. This can create difficulties for some families, particularly where the cost of living varies significantly between different areas of the country.

A household income that may appear relatively high on paper does not necessarily mean that parents have enough disposable income to provide additional financial support while their child is at university.

This becomes particularly important when considering the amount students receive. Bethany Garner reported for Forbes (2025) that maintenance loans can fall around £500 short of the monthly amount required to cover living costs. For students already managing rent, food, travel and other expenses, this shortfall can create additional financial pressure and may require support from family, part-time employment or other sources of income.

Understanding these potential costs before entering university could therefore be an important part of financial education. Teaching students not only how student loans work, but also how to budget and plan for the reality of university life, may help them better understand the financial commitment they are taking on.

Understanding the Financial Reality

Adapting the syllabus would not only benefit those considering university. Financial education can also help prepare young people for the wider financial responsibilities that come with adulthood. For many, moving away for university may be one of the first major financial commitments they make, but it will rarely be the last.

A statistic from a House of Commons report published in July 2026 shows that 14% of the adult population, approximately 7.3 million people, are classified as needing formal debt advice due to financial strain. Around 23% of young people aged 18-24, equating to 1.3 million people, are in some form of financial difficulty or problem debt, according to a study carried out by Financial Capability (2016).

These figures highlight the financial challenges that many young people can face as they move into adulthood. Without a strong understanding of borrowing, budgeting, saving and debt, important financial decisions can become more difficult to navigate. Professional financial advice can also be valuable, although this may not be accessible or affordable for everyone.

Linking back to the comments from Dr Jo Saxton, this highlights the potential value of developing financial awareness from an early age. Understanding how borrowing, interest, budgeting and debt work could help prepare young people for the financial decisions they will face, rather than leaving them to learn these lessons only when they encounter financial pressure themselves.

However, financial education should not stop once someone leaves school. As young people begin earning, they face a different set of financial decisions: how much to spend, how much to save, how to prepare for unexpected costs and, eventually, whether investing could form part of their longer-term plans.

What happens once you start earning?

Many companies, such as Yorkshire Building Society, outline different ways to manage your money once you start earning. Having an emergency fund is widely recommended, with the general guidance being to have around three to six months of essential or fixed costs set aside. This can help provide some financial security if income falls or unexpected costs arise.

This also links to the 50/30/20 rule, where your salary is divided into 50% for needs, 30% for wants and 20% for savings, as outlined by Lloyds Bank. This can be a useful framework for considering how your income could be allocated each month. However, with the ever-changing cost of living, following a fixed percentage can be easier said than done. Many people may find themselves living from pay cheque to pay cheque, leaving little or no room to save.

Where possible, developing a regular savings habit can still provide a foundation for longer-term financial planning. Once an emergency fund and short-term savings are in place, the next question becomes whether some money could be put to work for the longer term.

From Saving to Investing

For money that can be left untouched for longer, investing may become another option to consider. Unlike a traditional savings account, investments can fluctuate in value and there is a risk of losing some or all the capital invested. However, investors may also have the potential for greater returns over the longer term.

Many people choose to explore the stock market themselves, while others may look towards investments such as cryptocurrencies, particularly after seeing the significant growth stories associated with assets such as Bitcoin. However, these examples also highlight why understanding risk matters. An investment that has delivered significant growth in the past does not necessarily mean it is suitable for every investor or likely to deliver the same results in the future.

This is where professional financial advice can become valuable. An adviser can help investors consider their financial goals, investment timeframe and attitude towards risk before looking at which investments may be appropriate. Building a portfolio around individual circumstances can provide a more considered approach than simply following the latest trend or investment opportunity.

Understanding Risk and Reward

Understanding the relationship between risk and reward is an important part of deciding how and where to invest. Investments with greater potential returns can also carry a greater chance of losing capital. For some investors, taking on a higher level of risk with a smaller proportion of their portfolio may be an approach they are comfortable with, provided they understand the potential downside.

This is why considering the bigger picture is important. With so much financial information available online, it can be difficult to separate useful information from trends or opportunities that may not be appropriate for your longer-term goals. Investors should consider their own circumstances, objectives and attitude to risk rather than simply looking at the potential return an investment could provide.

Diversification can also play an important role. Rather than putting all of your money into one investment or asset class, investors can consider how different investments contribute to their overall portfolio. This can provide a more balanced approach to risk and introduce different ways of pursuing longer-term objectives.

For investors looking beyond traditional investments, this leads into another area worth exploring: Structured Investments.

Where Do Structured Solutions Fit?

For investors considering how different investments may fit within a diversified portfolio, it is important to understand how Structured Products and Structured Deposits work, particularly in relation to capital protection and counterparty risk.

Structured Deposits offer capital protection and are covered by the Financial Services Compensation Scheme (FSCS), subject to the relevant eligibility requirements and limits. This provides investors with an added layer of peace of mind, knowing that their capital is designed to be returned at maturity, subject to the terms of the investment.

Structured Products do not fall under the FSCS in the same way, meaning investors need to understand the additional risks involved, including counterparty risk and the specific terms of the product. Many of IDAD’s Structured Products include European Barrier protection, where performance is assessed against the barrier at the end of the investment term rather than on every trading day. Depending on the individual plan, this can provide a different level of conditional capital protection.

Ultimately, understanding the counterparty, the level of capital protection and the conditions that apply is essential when considering whether a Structured Product or Structured Deposit is appropriate for an investor’s circumstances.

Making Financial Decisions for the Future

Financial responsibility ultimately falls on the individual, and how a young person chooses to use their money will come down to their own circumstances and decisions. Balancing financial choices with the realities of everyday life can be difficult, particularly when circumstances and priorities change. However, understanding when and where to save or invest can play an important role in building towards your long-term financial goals.

These decisions are not always discussed as much as they should be, particularly when young people are first starting to earn and manage their own money. Speaking to a financial professional can help you understand the options available and consider how they may fit around your own circumstances, goals and attitude to risk. Taking the time to make informed decisions early can help put you in a stronger position as your financial journey develops.

References:

Haygarth, D. (2026). Student loans should be taught in school maths lessons, Ucas boss says. The Guardian.

BBC News (2023). University dropout rates reach new high, figures suggest.

Roberts, M. (2026). Universities With Highest and Lowest Dropout Rates. Whatuni.  

Garner, B. (2025). Student Updates. Forbes Advisor UK.  

Francis-Devine, B. (2026). Household debt: statistics and impact on economy. House of Commons Library.

Money Advice Trust (2016). Borrowed Years: A spotlight briefing on young people, credit and debt. FinCap.

Yorkshire Building Society (YBS). How much of my salary should I save? | 50-30-20 rule.

Lloyds Bank. 50/30/20: Managing your money.