Student Loan Debt, Insert Sarcastic Slow Clap Here

We all remember the student protests and everything else that came with the government’s decision to boost tuition fees up to £9,000 a year. And the Liberal Democrats are paying for most of it. But there was something that was forgotten in the debate over education: the government promised that these additional costs to the state would peak at about £50bn in 2030.

Student protests

Well that may have been a little bit of a miscalculation/error/blatant lie as a new study by Andrew McGettigan, for the Intergenerational Foundation, has revealed that it could be around the £100bn mark instead. And he did this by measuring the potential impact of allowing students to pay back only if they are earning at least £21,000 a year.

If this is true – which at the moment it looks like it’s turning out to be – then we can easily see why. Let’s look at why there are so many people going to university in the first place. This originally started a few years ago when the Labour Party thought it would be a good idea to get around 50% of all British teenagers into university. So they did that. But when the economic situation deteriorated they realised that allowing so many students to enter university at £3,000 a year wasn’t really that sustainable anymore as universities generally can’t afford to take on that many students at that level whilst sustaining themselves.

So the latest government took a little bit of a u-turn and decided to let universities charge up to £9,000 a year; with only a few universities with special consideration being allowed to charge the full price. So what happened? Inevitably, the main universities charged the full amount, but then everybody decided to follow and “special consideration” seemed to melt away like recent voter turnouts. Ok, that didn’t go to plan. That then led to a 9% reduction in the number of people applying to university on the next application cycle.

But the problem is they have also raised the level at which students have to start paying back their £9,000 a year student loan, to £21,000. This would be fine if economic times were great and people were riding to work on golden horses, but that’s not the case. So now the government is lending out £9,000 a year to students who won’t be able to ever pay back that loan.

Let’s look at the facts. £9,000 a year + maintenance loans for many = £27,000 minimum for the minority of students who didn’t need maintenance loans. Students need to have a job paying £21,000 a year in order to start paying back their student loan. Now take a look at the starter jobs these days. Those jobs are offering salaries of between £16,000 and £18,000, most of the time. So the student would have to remain in that job for quite a few years before hitting that £21,000 threshold.

The government now has to wait for their loan.

Another problem, though, is that many students have been misled. They are taking degrees that are completely worthless. And, yes, media studies is a worthless degree, and no I don’t care about which teacher made themselves a success from it, they are in the tiny minority. Those degrees won’t get them jobs. And that’s not all, even those students who are doing a degree that happens to be worth a damn have been misled as they believe that a degree warrants them a job. This means they will have absolutely zero experience as they are thinking that they are going to swagger in the door and kick that poor uneducated, working class buffoon out.

I read a BBC report last year that talked about how many employers find that graduates are not ready for the real world of work and can’t even do basic things. That sort of thing is rife, and it’s precisely why many graduates are out of work. Employers are rarely interested in students with a degree and little experience. A degree is a piece of paper, and not a lot else.

The unemployment rate for young people in this country is disgraceful, and many of them are graduates. So how does the government think it’s going to get its money back anytime soon? The economic crisis isn’t going to fix itself, and developments in the Eurozone only look to be making things worse.  The answer is that the government won’t be getting its money back at all. Instead, the burden will be shifted back to the public, so now you’ve just increased the deficit due to your pathetic handling of the student loan situation.

It makes me wonder why they just didn’t keep university funding up and then leave the fees alone instead. Or, alternatively, they could have just stopped promoting the idea that every teenager should go to university. That’s nothing but a blind effort to get these young people off of the unemployment figures. The lower the figures the better the political situation for the government. You have to pity the saps who fell for it, though, don’t you?


What do you think about the current situation with university education, and how do you think they should have gone about it?