Can you remember a time when people said proudly “I don’t owe anyone a penny”? If so, you must be well over 60. Nowadays the fashion is for ever-increasing debts. Odd isn’t it when we’ve a got a government that is always on about the dreaded deficit and how it must be reduced. (They never say why it must be reduced or what will happen if it isn’t. Just insist that getting rid of the deficit is the main priority of our fiscal policy.)
Young people start their student life by borrowing the money to pay for their degree course. Remember the 50s and the 60s? Our country was less affluent then, but we did have free education, free, not just to primary and secondary level but to degree level too. Just imagine it! No tuition fees. The average student had their fees paid by the state and on top of this there were maintenance grants for all but the richest. You could be a student and concentrate on studying – not on how to survive financially.
Now most students will leave university with a huge debt that they have little or no chance of repaying. I think there is something in the student loan scheme that allows the debt to be written after a certain length of time if the former student hasn’t reached a predetermined level of salary. Something like “ if you haven’t paid off your student loan thirty years after graduation and haven’t earned more than £15,000 per annum over that time we will write this off as a bad debt.” It might, just might mean you won’t be hassled by the student loan company, but it might also mean that you are labelled as “high risk” and won’t be able to get a mortgage a bank loan or even take out a hire purchase agreement.
It would be interesting to find out what percentage of student loans ever get repaid. Some graduates will disappear from the radar, some will die, some move abroad or be detained at her majesty’s pleasure – do you still have to pay off a student loan if you are in jail or permanently hospitalised and incapabe of work?
No one nowadays buys something they can afford and pays for it upfront, it just isn’t done. Most houses are bought by getting a mortgage, other items, cars, furniture etc are bought on a “buy now, pay later” system, even if it is only the now standard credit card usage where you build up a debt and if you are sensible pay it off at the end of the month so avoiding interest charges. If we had credit cards in the 1950s and 1960s I can’t remember them.
What can be done to stop this drift in debt? I admit I don’t know. One immediate and fairly obvious suggestion would be to adopt the Scottish system where tuition fees aren’t demanded from students.
Another approach would be for an organisation wanting to recruit graduates, whether it is British Gas or British Homoe Stores, The Bank of England or a local planning authority to pick their employees first and then pay for them to go to university and get the required qualifications. Conditions could be written into the agreement so that an employer couldn’t reject an employee who had satisfactorily completed a course of study, and likewise a student would not be able to take a degree at one employer’s expense and then go off to work for a rival. It should be possible and it is already done in some cases, eg student nurses in the army medical corps have their training funded by the MOD.