As has been pointed out to me, I am behind the curve when it comes to repaying student loans. When I took out my loan (and all this were nowt but fields), once you starting earning enough to repay the loan (about £21k, from memory) you had five years to pay the lot off – your repayment amount was calculated by dividing the total borrowed by 60 months. But that’s not how it happens now. Repayments are 9% of anything you earn over £15k until you pay it all off, or until you hit 25 years – at which point all the debt is wiped out.
This is enormously less terrifying than I originally thought – based on my previous, apocalyptic, vision, I would have made it down to London but still via Leeds University (parental worrying about taking on extra debt would have infected my 18 year old self).
I’ve tried to do some repayment calculations, based on an average £15k debt repayed on current procedure, and work out how it would have affected me at the various points in my earning life. For my first job in London I would have paid £8 a month for 25 years, leaving over £5k to be written off when I hit 46.
That is, of course, nonsense. One hopes I would earn more than £16k at some point during my life. So move forward five years and I’d have been paying £110 a month for nearly 19 years. A few years on and it goes up to £240 a month for 6 and three-quarter years. I was earning quite a lot. Doesn’t sound too bad.
Except when you take that amount out of my monthly salary, I wouldn’t have been approved for the mortgage I got at the time. Ed Howker‘s written a book about how this generation is fucked – no job security, massive house prices, doomed to rent forever (I’ve always wondered what happens if you’re still in the private rental sector when you hit 65), no pension… It’s been instructive to listen to Radio 4 approach this like it’s new. I’ve felt it for years (as have many of my friends) and have tried to write a novel about it several times but have never been able to construct a narrative that doesn’t collapse into a primeval howl. And I only escaped this extra problem to overcome by two years.
Sorry, people who are two years younger than me. But I still feel – phew.
After finding out the repayment system and the percentage game it plays, I’m not actually sure that even doubling fees will have the practical impact the headline changes suggest. If you’re a low earner already resigned to paying off a percentage of your salary for the next 25 (or now, 30) years, you were never going to pay off the full amount anyway. Does it matter if it’s £5,000 or £20,000 written off at the end?
The psychological impact of having so much debt is, of course, another matter. As is how lenders (mortgage, etc) will view it. Also, if I had potentially £35k of debt to repay, I’d spend my life with a constant, niggling worry that the government would change the rules at some point and take away the safety nets of wiping the debt out after a certain amount of time. I don’t know how much they can do this; but I do recall at least that interest rates were changed halfway through my own loan term (i.e., we had to start paying inflation interest as opposed to virtually 0%), and I raged that I was powerless to do anything about that.
(There’s also something about interest rates somewhere – I’m sure I heard a proposal that higher earners would pay more interest than lower earners (to iron out the disparity that higher earners pay back the loan quicker, thereby paying less overall), but I can’t find whether that was in Browne or whether it was a Cable suggestion. For the record, I think this would be a good idea. Otherwise, if you’re only due to pay off the loan after 29 years and 6 months, the whole thing sucks.)
The repayment angle also ignores the entire moral argument about whether it’s right to force the burden of payment onto students when higher education has been free for so long. I really don’t have space for that. This is already going to be a mammoth post.
Things I think Browne got wrong:
- uncapped fees. There’s already a snobbery about universities when it comes to employers – is creating an actual, visible market going to make that better? No. I can’t see any university selling itself cheap (who wants to take a Lidl course?), so students will end up paying the same for an English degree at Nottingham as at Nottingham Trent. One degree will have a higher value to employers at the end of the day, but the kids will have paid the same for it. This is unfair. It’s unfair now, but at least the system isn’t pretending it’s creating a market
- the whole idea that only 40% of graduates will earn enough to pay off the fees in full. Doesn’t that mean the whole concept of higher fees is a bit fucking stupid? If 60% will never completely repay, who makes up the shortfall?
- allowing the possibility that some courses could become more expensive if the government is allowed to remove funding from all but science, medical and engineering degrees. Yes these are important; but fuck me, I’m getting a little bored with attacks on arts and humanities subjects. Anyone would think that being trained how to analyse and objectively review isn’t something politicians want to encourage
Things I think Browne got right:
- allowing part-time fees to be paid after the course is finished, like full-time
- since certain courses may end up being more expensive than others, I’m relieved that Browne explicitly stated the need for decent careers advice in all schools…
I’ve been meaning to blog about career advice for a few weeks, ever since reading this article about kids on free school meals getting to Oxbridge. One of its main thrusts is how state schools don’t offer any kind of real advice on getting into university. I’ll leave you to imagine how many bells it rang. My main memory of ‘preparing’ to apply to university was being shoved into the library towards the big book that listed every course and the expected entry grades, and a bunch of prospectuses. That was it. We were already doing our A Levels so our paths were pretty much set (no discussion was had around those either; we were given a sheet of paper to pick three subjects from four columns. I’d really wanted to do Physics, but it clashed with History. If it hadn’t, would anyone have asked me whether it was a good fit with my other choices, and where I saw them taking me? I doubt it).
(The A Levels issue could be a serious problem if certain courses become more expensive than others. It could become extremely strategic for poorer kids to avoid the really pricey ones. But you need to start thinking about that at 16. And if you’re 16, and nobody in your family or street has ever been in higher education, you need your school to help you. Annoyingly, your local comprehensive – at the moment – will not do that.)
So there we were, with a load of brochures and no idea what to do with them. Do you want to know what my criteria were for picking a university? Location – nowhere too hard to get a coach home from (what do you mean trains? Do you think I shit money?), but also not too close – aesthetics – whether the campus was pretty – and grade snobbery – the institutions that required the highest grades to get in.
Technical, wasn’t it?
I had no concept of research quality, staff specialities, student facilities or contact time. None of us did. And it didn’t really matter in the end. But if vast sums of cash had been riding on it, I think it would be highly irresponsible for a school to leave its pupils to make decisions in the same state of ignorance. Unsurprisingly, the Browne proposals once more stacks the deck against the lower classes.*
* Unsurprisingly, I will have more to say on this point.