Is Student Debt Sustainable?

Student funding is in chaos and must be fixed. Fees were introduced to finance universities but are causing mayhem, as they load students with unsustainable debt.

A broken system

The recent Institute for Fiscal Studies report highlighted that the majority of students don’t pay off their full loans.

It also noted the level of debt was increasing and that doing away with the maintenance grant has a greater negative effect on poorer students.

The most worrying issue, however, is the increase in the interest rate as it was always intended to be a minimum rather than a penal charge.

Higher interest rates have the obvious effect of increasing the amount of money owed but also introduce anxiety and inequity for those taking on loans.

For the first time since the introduction of student fees voices from all sectors and political parties are calling for a rethink as value for money has vanished.

The universities gain from the arrangements at the cost of students who suffer from a patchwork of performance across the sector.

In many cases students are leaving university with debts that would have been completely unacceptable to those who now teach them.

But higher education is still prized even though the mechanism for achieving it is flawed and stretched to breaking point.

Fees are climbing

Student fees were introduced as a way to get more people into university and provide the money needed to educate students to a high standard.

At the time there was support for a system of modest charges as it made sense to share some of the cost with those who gained most.

The difficulty lies in the way fees have steadily and considerably risen to a point where they are too expensive for many students and their families.

Higher education and the passport it should provide to a rewarding career are too precious to students and too valuable to society to be so poorly managed.

Fees have risen, as have the salaries of university chancellors as they mimic corporate chief executives of profit-driven organisations.

The belief that higher fees lead to higher quality has proved false as universities increase their fees regardless of particular standards.

The idea of reducing the number of years it takes to complete a degree has never materialised, presumably because it would reduce income for universities.

Students are frustrated that the implied contract of gaining a good education that leads to a well-paid job and rewarding career is no longer true.

The result of the student fees system means the network of higher education provision is overburdened with debt and underperforming on quality.

The logical outcome is that levels of debt for students and government are unsound and therefore collapse is inevitable.

So, rising student fees are unaffordable and a new model of funding is required before the current one fractures leaving a mountain of debt and broken dreams.