Who, apart from the very wealthy, could bring themselves to go to university these days? Three years of mostly less-than adequate teaching, a lot of it on Zoom, an uncertain at best transition into the workplace and a whacking great loan that you’ll spend the next 40 years repaying isn’t exactly the most tantalising proposition.
Even in my day, twentysomething years ago, unless you were being heavily subsidised by your parents, university was a financial nightmare. We all worked all the way through our courses, often missing lectures as a result. Life in London was completely unaffordable for us and we all left crippled with debt.
But it was nothing like what young people today are going through. Now 1.8 million Britons are in at least £50,000 of student debt, with thousands owing more than £100,000. Worse, because of the last year’s cantering interest rates, what used to be a low-interest loan is now charged at between six and eight per cent, meaning the amount they owe is perpetually increasing.
Throw in the cost of tuition fees — now the same for a Russell Group university as your old low-quality re-branded poly — coupled with the cost-of-living crisis and soaring rental prices for accommodation in London means you have a situation which for students is becoming cataclysmic. And, with maintenance loans means tested, the grim inevitability is that it’s the poorest students who leave with the most debt.
The government sold the student loans to private investors, but haven’t disclosed who they are
Of all the sclerotic shortsighted policies by successive Labour and Conservative governments fraught with unintended consequences and beset by unforeseeable events, those around our universities and students are some of the most egregious.
And it all threatens to become a disaster for the Treasury; by March 2049 the value of outstanding student loans is expected to reach £473 billion.
The last government sold off several tranches of the student loan book to private investors — not only do experts think it sold it for far, far too little, but it has been accused of a lack of transparency as they haven’t disclosed who they sold the loans to, which looks murky, to say the least.
Presumably it’s thanks to said investors that, from this autumn, new students will have their loan repayment period extended from 30 to 40 years and the threshold at which they start repaying will fall, encompassing more graduates on even lower salaries.
Labour committed to abolishing tuition fees in 2017, but abandoned the pledge. New Education Secretary Bridget Philipson said she would reduce monthly repayments for students, but this was noticeable by its absence in Labour’s manifesto. Starmer said in the past that would-be students being denied opportunities due to costs “should shame the Conservatives”. But will he do anything about it either?
It’s not just the students being hung out to dry. Worrying numbers of universities are running on a deficit due to a sudden 33 per cent fall in foreign students compared with the same period last year following the clampdown on them bringing dependents.
The problem is that with tuition fees for British students long-capped at £9,250 in an endlessly more expensive world, foreign student fees were subsidising British students. Now 40 per cent of universities are expected to go into the red.
The new government’s in-tray is full to overspilling, but for those of us who still believe a society is enhanced by people with strong university educations, this must seem a priority. Surely, no one could argue that it’s not high time we prioritise the young.
Under the Conservatives, pensions went up 31 per cent since 2019. No one gets more lucrative pensions than MPs, which are a staggering five times more generous that private-sector workers. If we’re looking for extra money, maybe there would be a good place to start.
Thornberry earned her snub
As everyone knows, the secret to a good party isn’t just who you invite but who you don’t, and I did enjoy Starmer’s rather piquant flex excluding Emily Thornberry from his cabinet. The Right Hon Thornberry is someone who over the years, in the parasocial relationship we all have with “faymoos people”, I have come to dislike. She may be “surprised” but the truth is she will never escape the shadow of that George Cross tweet. Short of Gordon Brown v Gillian Duffy, you couldn’t make a more acrid “aren’t plebs ghastly” mask slip.
