Shouldering the cost of a skilled Britain

For the dewy-eyed recent graduate, standing out from the crowd in today’s jobs market is daunting, if not downright impossible. Competition for employment is intense - more than 630,000 students completed a higher education qualification in 2004 -05. No longer does a bachelor’s degree guarantee twenty-somethings a career and money aplenty

So, with rewards of higher salaries and better job prospects, postgraduate study has become a popular option for many. But shy of medical experiments, occasional prostitution or a dodgy deal with a loan shark, how do graduates pay for yet more months of study? A university award or scholarship will propel a lucky few through. With others, part-time study or part-time work is more practical.

For Sabrina Workman, 24, a Career Development Loan was essential to finance her further studies. In 2003, she took up a Masters in Conflict, Development and Security at Leeds University. “It was a question of finding something to pay tuition fees and cover as much of my living expenses as possible,” she says.

Under an agreement with the Learning & Skills Council, three banks offer the CDL – The Co-operative Bank, Barclays and The Royal Bank of Scotland. Students enrolled on a vocational course can borrow between £300 and £8,000 to finance 80 per cent of tuition fees, plus travel expenses, books and other costs for up to two years.

The interest is paid by the Department for Education and Skills until one month after a course finishes. Then the borrower is expected to begin repayments at a typical APR of 12 percent. The student chooses the desired payment period, which can be anything between 12 and 60 months. It seems a fair enough deal, but is it?

Critics say that this interest rate will be hard to bear under the new student finance system. An undergraduate loan can now amount to £21,000, which coupled with a £8,000 CDL, is no small sum. “This will have significant consequences in terms of the debt burden that will overhang following completion of a postgraduate course,” says Tim Brown of the National Postgraduate Council.

For many who already have a CDL, the loan is inadequate and the repayments are crushing. Once you take away tuition fees (typically £3,000), there is not much left to survive on. “Even with the maximum loan, I had to get part-time work to pay for my living costs,” says Ms Workman. “I opted for the maximum repayment period, and two years later I’m still paying a quarter of my income every month to pay it off,” she says.

If Britain is going to compete in the global economy, we must invest in training. This was the main argument behind Lord Leitch’s recent report for the Treasury. His study, ‘Prosperity for all in the Global Economy: World Class Skills’, argued that the country faces a bleak future if its workforce is not better skilled. So, for the benefit of both Britain - and the humble graduate - shouldn’t government and business shoulder more of the burden of postgraduate education?

Posted by William Henley

Comments

[James Anthony]

I remember my older brother joking about how I wouldn't get a student grant like he did. That was hard enough to take, but I never realised that it would get worse when I had a degree. I have debts and can't see myself affording tuition for a postgrad course just yet.