Life and Debt

Tuition fees are often presented as a fair system for both students and universities - students get loans to get an education, while universities get funding. Yet this wobbly relationship leads to both parties being burned.

Student loans cripple graduates’ incomes and chances of success (Photo: Michael Flehsman/cc/flickr)

When tuition fees for universities were introduced in 1998 under the New Labour government, they were introduced in the name of pragmatism. A government report on the funding of higher education in 1997 claimed that “A detailed assessment of the issues has convinced us that the arguments in favour of a contribution to tuition costs from graduates in work are strong.” and that the billions that the education sector so desperately needed could only be funded through student contributions. Back then, fees were capped at £1,000 per year, but now they’re as high as £9,250 after the cap was increased in 2012.

However, neither universities nor students have seen much benefit from these policy changes, mainly due to the fact that the tuition fees system is very costly to both sides. The average student on a three-year course comes out with £42,800 of debt, which they begin to pay after their yearly salary exceeds £21,000. They’re also given a 30-year deadline, after which the debt is simply written off.

This means that a lot of debt goes unpaid, as the Public Accounts Committee found out. In 2014, the committee estimated that the government woefully underestimated the amount of debt that would go unpaid, expecting that - by 2042 - £90 billion out of the £200 billion of loans estimated to be given out by then would go unpaid. The London Economics organisation also estimated that, if 48.6% of debt went unpaid, then the new tuition fee cap of £9,000 would be more expensive than the old system in which the cap was £3,000.

Back in 2014, 45% of student loans weren’t being repaid. The tuition fees system was - and still is - barely functioning, with the Students Loans Company being heavily criticised recently for, among other things, quadrupling a student’s interest rate for an error that said student never made.

It’s easy to see why the system is failing. After all, a study in 2014 showed that 25–29 year-olds saw their wages fall 12% from 2008–2014, while 18–24 year-olds had theirs plummet by 15%. Wages for under 25s have fallen to pre-1988 levels, and for the first time in post-war Britain, the younger generation is poorer than their parents.

This is a symbiotic relationship between education and economy. Because young people are earning less, they can’t pay off their debts, which means that taxpayers - including them - have to foot the bill.

And the reason for this economic downturn among young people? It’s likely tuition fees. A study by the World Economic Forum shows that higher education is “key to economic growth” and that there’s a correlation between higher test scores and higher economic growth rates - therefore, high tuition fees that discourage people from higher education are also damaging our economy. If tuition fees are scrapped and university made free for all- relatively speaking, as they’ll still be paying through tax- then our society will be better educated and therefore our economy will be in better shape.

Tuition fees breed inequality, despite the fact that anyone can get loans. A study in the book Student Lives in Crisis shows that the current university system has a “direct effect on the reproduction of inequality” as loans are often not enough for students to live on, disproportionately affecting poorer students.

Even the government has admitted this. In 2013, Department for Education statistics showed that 1,000 students who received free school meals attended a Russell Group university, compared to the 25,000 students who didn’t receive it and went to a Russell Group uni. Another government study in the same year showed that a child who didn’t receive free school meals in Year 11 had a 20-to-1 chance of attending Oxford or Cambridge by age 19. The chance that those receiving free school meals would attend either university?


Not only that, but a University and College Union study in 2014 showed that finance and the perceived financial strain of tuition fees put off a huge amount of disadvantaged students. Only half of students from the social grades D and E (those whose parents are either unskilled manual workers or aren’t working at all) plan to go on to higher education, compared to two-thirds of students from social grades A and B (those whose parents are in higher or intermediate managerial positions). Those who held a part-time job were also far more likely to say that the expense of university was a barrier for them.

What’s the point of tuition fees if most students can’t afford them? What’s the point of student loans if they’re not enough to comfortably live on and are nigh-on impossible to pay off? What’s the point of funding higher education this way when those at the bottom can’t use it to advance their career chances?

The solution is universal free education for all students. If the burden of university funding is spread across the whole population, it’ll fare better than if it’s placed on the backs of debt-ridden students. When the population becomes more educated, then we all reap the benefits- whether it’s directly through doctors, nurses, and teachers, or indirectly through scientists, artists, or sociologists.

A more educated society cannot possibly be a bad thing.