Student debt: character-building or soul-destroying?

A graduate kills herself because she could no longer face the £14,000 debt she had racked up as a student. A few days later, a report into student debt announces that students are less worried than ever about debt. In fact, they are becoming accustomed to it, according to the authors of the report, with more than 40 per cent taking part-time jobs to pay their way through university. But which story behind student debt are we to believe? The one that leads a 26 year old to suicide, or the one that suggests that for students, debt is a fact of life, and they should all just buck up and get used to it?   

With the introduction of top-up fees in September this year, which will more than double student debt levels, the question needs urgent attention. Proponents of the new system say that even though tuition fees are going up to around £3,000 a year, by changing the payment method so that the student repays the fees alongside their student loan on graduation, the burden of payment will be reduced.

But those who object say that the change in payment method is simply a way to mask the hike in fees. The increase is so significant that under the new system, any debt left unpaid after 25 years will be cancelled. Had this deadline not been imposed, some students could conceivably have been paying off their student debt past the age of retirement.

I have a theory about the authors of the "positive" report into how student are coping with debt. It is that they are probably old and more than likely went to university at a time when poor people didn't go to university and grants were still given to those that did. 

Being an indebted student is not fun and you do not get used to it. Taking part-time jobs is useful life experience, but at what price? Throughout my four years at university, I had two part-time jobs, but still needed to take out hardship loans in addition to the full student loans I was receiving. This is not because I frittered my money on drinking beer, but because I needed the money to survive. Last week, I received my annual statement from the Student Loans Company. In the last year, the amount I owe has gone down from £15,965 to £15,004. I paid back £1,392 and was charged £431 in interest. At the current rate of repayments, I will be paying back my loans for the next 16 years - or until I am 40.

Or, perhaps the authors of the report do have a point. I have become used to being in debt. But should I have had to? The point that the report so glaringly overlooks is that if you want to go to university, you have no choice. 

If I was to take the advice of Lord Turner, the government's pensions czar, that I should wait until my debt is paid off before saving into a pension, will I have enough money in retirement? A few simple calculations would suggest not, unless I win the lottery. When will I be able to start saving a deposit for my first home? I daren't even guess.

These are the issues facing graduates who paid fees under the old tuition fees system, and they will only get worse for graduates unlucky enough to be entering from 2006 onwards.

My sympathies lie with those who have taken the brave choice not to go to university at all because of financial worries. By the government's own admission, enrolment numbers for less popular courses in science, engineering and languages will drop as a direct result of the new fees.

It seems that in striving to create better access to higher education, the government has shot itself in the foot with tuition fees, and shot down the hopes of the generation it had nearly convinced that being able to go to university was a fundamental right. 

Comments

I totally agree with the "indebted student" - my son is in the same position. He too has to work, pay rent, utility bills and his tuition fees as well as books and any other equipment he may require. I have to buy his food because he cant afford to eat after everything else has been paid. He too is worried about the mounting debt of his student fees.

[Oliver]

I was faced with the decision of university two years back, all my life it had been part of the plan, school, college, uni then a job.

However after 6 months of work during a summer term left me ina different state of mind.

Not only had I been put in charge of a couple of graduates, but hearing their debt put me off uni completely.

From an employers standpoint I noticed that while a degree is always a positive thing, a degree without at least 3 years experience is practically worthless. I found HR staff found people with fresh degrees to be rather pretentious know it alls, who despite the qualifications could never do the job, Several people who I had worked with where several years my senior and agreed that while a degree is neeed in some jobs, they could have got a lot further just by working their way up the ladder, to quote their words, the years they spent at university were 'worthless'.

A few people went on to get the masters, hoping this would help get them into the high paid job that universities always promise, as for me, im just going to keep working my way up the ladder, gaining the experience, and pushing my pay packet up (without the good old 14 grand student loan weighing on my mind).

[William Turner]

I completely agree with Oliver on a lot of things said!

Being a masters graduate in engineering two years ago, I'm currently battling hard with my debts. I took the masters hoping it would put me above the rest after all the golden claims of fortune for new graduates had fallen on my ears.

Luckily I have managed to land a graduate job but since my student loan payments are removed before I'm paid but after tax, I am effectively taxed at 10 per cent more than I'm earning and I will be until im about 40!

Add to that my pay is nothing more than I would recieve had I taken a junior management job at Mac D's when i finished my A-levels. But I would then have been paid for those 4 years and not incured any debts at all!

I would however not describe all degrees as worthless, and I disagree on the point of people with fresh degrees being "pretentious know it alls". I would, however, say that a worthless degree is worthless and there are far too many of them out there! The country needs more doctors, nurses, teachers, scientists, engineers and accountants, it does not need more "golf course managers" and people knowledgable in "american films and german".