Online News Editor, Pete Syme, discusses the rising problem of debt and the possibility of reducing student loans in order to combat it.
Debt is becoming more ubiquitous; gone are the days when you could buy a house and raise a family off of a minimum wage salary, and degrees are becoming more necessary for a stable future, with tuition fees in the UK now more than nine times more expensive than when they were first introduced in 1998. Comedian and host of ‘Patriot Act’, Hasan Minhaj testified in front of the US Congress earlier this month on the topic, affirming that whilst “people aren’t making more money, college is objectively way more expensive.” The recent college admissions scandal was also raised, owing to its exemplification of the privilege that comes with wealth. Most notably was actress Lori Loughlin, who the FBI accused of paying $500,000 in bribes to get her daughter into USC. Whilst many have to struggle through poverty and take on vast loans, others can buy their way in regardless of merit. The issue isn’t confined to one side of the Atlantic, either. The Independent reported that English students now pay the most in the world, with the average annual cost in the USA being £7,518, and just £346 in France. With the Lib Dems breaking their pledge to vote against a rise in tuition fees, the coalition government almost tripled them to £9,000 a year. Though with their surge in popularity given their strong anti-Brexit stance, it can be concluded that these fees have become the accepted norm, with the 2010 protests essentially in vain. In summary, whilst degrees are becoming less of a guarantee of employment, they are becoming more expensive and thus student debt is rife amongst our generation.
At this point in time, debt is a burden that many are willing to take on in pursuit of improved employment prospects. However, this is not necessarily the case, as research from The Sutton Trust suggests that apprentices actually earn more than graduates from non-elite universities over the course of their career, although students from Russell Group Universities earn the most. With this discrepancy, the cost of a degree should be considered in further detail; is it right that students at former polytechnics with less employable degrees pay the same amount as graduates from Oxbridge? The Institute for Fiscal Studies reports that while Psychology graduates’ median salary five years after university is less than £25,000 those who study Dentistry and Medicine can expect more than £45,000. Whilst you do not start repaying the loan until you make £25,725, this still means that many graduates will be encumbered by the weight of their debt for much longer than their peers. Nonetheless, the essential question is: should people have a right to tuition-free higher education? Whilst apprenticeships are becoming more popular, it is unsurprising that this has coincided with the rise in tuition fees — debt is not an option for everybody. Education has been recognised as a human right since the first European Convention on the topic in 1952.
The feasibility of eradicating student loans, or even writing off all the debt, may be more tenable than it appears at first glance.
The concept of free higher education is sometimes dismissed as unrealistic, but when considering what we are charged in comparison to other countries, it could at least be made cheaper. In fact, much of the current system is reliant on changes brought about in the last thirty years, with the Student Loans Company being founded under Thatcher’s government in 1989, and tuition fees only first introduced across the UK by New Labour in 1998. Initially, students were only required to pay up to £1,000 a year, which accounting for inflation would still be below £2,000 today. Furthermore, maintenance grants were replaced by loans the following year, further adding to the debt one is likely to have to take on to get a degree. You only need to look beyond Hadrian’s Wall to see a country where education is predominantly free. In Scotland, those who are under 25 and without children or a partner have their tuition paid for by the government, whilst those outside this definition still only pay up to £1,800.
The feasibility of eradicating student loans, or even writing off all the debt, may be more tenable than it appears at first glance. Jeremy Corbyn’s Labour Party has not committed to the latter, despite claims from some MP’s and right-wing blog Guido Fawkes that they have made a U-turn on this position. It is an important caveat that this was only ever suggested by Shadow Ministers. Corbyn’s policy, as first announced in the 2015 leadership contest, is to scrap tuition fees in favour of maintenance grants, which could be paid for with a 7% rise in National Insurance for those earning more than £50,000 a year, and a 2.5% rise in corporation tax. Meanwhile, the man considered by many to be Corbyn’s parallel in the US, Bernie Sanders, has pledged to eradicate student debt from public universities altogether – a total of $1.6 trillion, which accounts for 7.5% of the country’s GDP. His payment plan is different, as it would primarily be paid for by bankers, with a 0.5% fee on all stock trades being the highest tax. It is expected to raise $2 trillion in 10 years. When looking at the life-changing outcome, for a minute sacrifice for some of the most privileged and wealthy in society, free higher education suddenly seems a real possibility in the near future.