Debt In The First Degree (Higher Education - Free for all or Fee for all?)

Name: Jon V

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Product:	Higher Education - Free for all or Fee for all?
Date:	13/03/06 (164 review reads)
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Advantages: A privilege to learn and further your career, chance of earning up to £400,000 more than your peers

Disadvantages: Very competitive and saturated graduate environment, increasing levels of debt,

Politics graduate Lisa Taylor took her own life in July 2005. She was unable to cope with debt in excess of £15,000. She was only 26, but the pressure heaped on her to repay the money owed was too much. Lisa was not an extravagant student, she borrowed to be able to live and exist. By burdening young people with huge debts upon graduation, are we sending out a positive message to potential students? Faced with a massive debt at the age of 21, is university the right choice for the huge numbers that apply each year?

Like Lisa Taylor I am a Politics graduate. I attended the University of Hull from 1997-2000. I emerged with a debt of £6000: £4500 in loans and a £1500 overdraft. I was fortunate to be part of the last intake that received full maintenance grants and was handed over £1500 annually to pay for my rent, food and books. I never struggled financially and neither did most of my friends. Those who had difficulties were mostly guilty of over-indulgence in pleasure. We would spend days in bars, drinking and enjoying being independent. Stories abound of people staying in Hilton Hotels for weeks, of cars and computers bought on a whim and even more ludicrously – the purchase by one friend of a genuine Samurai Sword. I was baffled as to how this would aid him in his engineering degree.

Come Christmas people were beginning to struggle financially, but this was their own doing. Following the introduction of tuition fees and abolition of grants, in my final year I watched fellow students struggle because they couldn’t afford to eat and pay their rent, as opposed to finding hardship due to retail therapy.

The girl living in the room next to me owed more following her first year than I did for my entire university life. I thought that abolishing grants and introducing tuition fees was a big step backwards.

The average debt upon graduation in 2005 was £12,640 according to Nat West. This figure is more then double what I owed. On the positive side the government points to graduates having an increased earning potential of £400,000 during their lifetime. Further comfort comes from Student Loan Company loans being pegged to the Retail Price Index (RPI), meaning the rate of interest is very low and that paying back the amount doesn’t have to be start until the graduate is earning around £15,000 a year.

Having an increased earning potential may spur students on and some will accept the debt as part of studying in this country. What about the psychological problems caused by owing large amounts of cash? Malcolm Hurlston, Chairman of the Consumer Credit Counselling Service (CCCS) claims that young people are “desensitised” to debt, claiming: “Credit cards have blurred the distinction between borrowing and spending and for many young people, student loans have made borrowing normal.” This is a negative way for young people to start their professional lives.

In 2006 it has become evident how easy it is to add to student debt. During an investigation by Student Direct, one student was offered a £20,000 loan she could not repay after only seven minutes searching the internet. This was despite a low credit rating.

A large number of students work part-time. During my studies I worked in a bar and corner shop, but for less than 15 hours a week and essentially to have more money to socialise. Today, over 40% of students need to take on part-time jobs due to increasing debt.

There is a serious problem emerging with graduates in this country. Tony Blair wants 50% of school-leavers to attend university, but is he aware there are a large number of graduates who cannot get jobs? The marketplace has become saturated. Following my graduation I attended over a dozen job interviews for which there were a large number of applicants. At an interview for a government job I learned there were over 10,000 applicants for 30 posts. The increasing number of people obtaining good degrees adds to the choice of jobs thinning and can in turn, lead to many people facing debt repayments to borrow even more money.

I would advise potential students to thoroughly research what they aim to study and to look forward to where they view their career heading. People need to seriously consider what they hope to achieve by attending university. What is the likely outcome if your degree doesn’t take you into a specific career with a predictable income? You will enjoy the experience, but may suffer severe financial hardship if you do not have the means to settle the debt with graduate employment.

I believe there is a significant number who do not need further education. This hinders rather than helps them. Whilst recently on a train journey I got talking to a guy from Poland who told me about the current situation in Warsaw. He informed me that there was a massive number of graduates but few jobs and upon finding himself in this number, chose to take up a manual trade as an engineer. Manual trades will exist as long as people live in houses and businesses keep trading. I believe that future generations may need to venture into this area, because the country has become cluttered with highly educated people who cannot find employment whilst plumbers, electricians and plasterers are in short supply.

I will discourage my children from attending university and show them the bigger picture of what they should aim to achieve from life. One of my best friends left school at 16 to become an electrician. Ten years later he has a stable job, his own house and car. I’m still struggling to find work six years after graduating and have a mounting debt to cope with. I know there are successful graduates, but the amount that cannot find employment and are saddled by debt is growing. At 18 it is difficult to make the big decision of whether to attend university and there needs to be more help and advice to prevent people from making the wrong decision. Nobody wants anyone to end up like Lisa Taylor, yet this signals the sign of the times.

Summary: Look to the future before taking the plunge.