The Push university guide is suggesting that English student debt may reach £53,000 for 2015 starters, rising from the current projected 2014 projected student debt of £26,100; this is at a predicted fee rate of £8,630 per term, but students could be paying as much as £9,000 to attend a public institution.
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According to the survey, which looked at 2,800 students and based the projection on a course length of 3.4 years, average annual English student debts in recent periods have risen 6.4% to £5,680, rising faster than inflation.
It was noted that as well as the increasing cost of university, this number could also be attributed to the difficulty of finding part-time temporary work as well as the rising cost of necessities.
However, it’s not all bad. With the new scheme, student loan repayment only starts happening once graduates start earning £21,000, with any outstanding debt written off after 30 years. Also, under the new payment plan, new graduates will be making smaller yearly payments than is currently standard. It has to be said, though, that the costs of education are usually supported by family and commercial credit, which can be a recipe for disaster in the wider economy. As Liam Burns, president of the National Union of Students, says:
The fact that the government thinks it’s OK to hang an amount of debt equivalent to a small mortgage over someone’s head while they study is one thing, but leaving young people reliant on commercial credit just to stay in education is scandalous.
The Department for Business, Innovation and Skills, however, maintains that since there is no up-front cost for undergraduates, the £9,000 tuition fees only apply to a small number of starters and there is financial support available, the hike in debt shouldn’t put anyone off from attending the university of their choice.
The survey is out a week before A-level pupils are due to get their results. As this is the last year before the fee increase, competition for the remaining places is expected to be stiff.
Do you think the UK will start seeing the same kinds of problems with graduate debt the US has been suffering from, particularly in recent years? Please share your thoughts below.
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August 12, 2023
finance