New students are just shaking off their hangovers from Freshers Week, but for their parents the worry about how to pay for university has only just begun. So this may be a good time to remind ourselves of the ‘great tuition fee disaster’, and what it might teach us about the importance of being financially calculating in this world – even as innocent youngsters.
I vividly remember marching against the first turn of the screw, when the government allowed tuition fees to rise to £3,000, about 10 years ago. I was 16 years old and, even then, I failed to see why Labour would renege on its manifesto promise. How a fee increase could fit in with the relentless drive to push school leavers towards university. My parents were just as angry.
Ten years later and I feel much the same (as does my family), which is quite remarkable given that time could have softened our views.
Anybody with a son or daughter at university right now will know that sinking feeling when their offspring received the all-important acceptance letter. Pride can turn to horror when school leavers realise that they are shackling themselves to a debt potentially lasting decades if their course results in a decent job. It is small wonder that there is deep mistrust and cynicism towards the establishment as a result of how this area was thoughtlessly handled. Indeed, it went some way towards shoring up the nationalists’ mighty support among young Scots in the independence referendum. Students north of the border have been enjoying fee-free university education since devolution, to the chagrin of their English counterparts.
To cap it all, this whole wretched policy has turned out to be “financially unworkable”, according to MPs. The Commons Business, Innovation and Skills Committee recently warned that a whole swath of student debt would never be paid back, when the national budget needs every penny.
Decisions taken to ease the blow of higher fees – only tapping graduates for repayments when they earn above a certain threshold – are coming back to bite the government. For many young workers, salaries are not proving to be as handsome as we thought.
Meanwhile, the march of the self-employed could allow lots of debt to slip under the radar. Under the current student loan system in England, the government now loses about 45p on every £1 it lends. This is far higher than the 28 per cent originally predicted. Around 6 per cent of graduates leave the country, out of sight of the Student Loans Company.
But there is a silver lining. The student loan farce should concentrate our minds when it comes to picking universities. As I see it, a degree is not a universal human right – it is a transaction. A good degree is a sound investment. A dumbed-down, unrecognised qualification is essentially worthless. Let us not forget that universities are also commercial enterprises with a vested interest in selling us their products.
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