Fees, debts and loans

Amidst the international turmoil around higher education funding, one aspect of the situation has started to encroach on public awareness: student (or graduate) debt. In England it has just been revealed that the 20 students with the largest debts owed to the Student Loans Company together owe more than £1 million, with the highest individual debt being £66,150. In the United States, where debts have been a feature for many years but where, in the light of major tuition fee increases recently, they have grown significantly, there is an overall level of graduate debt that exceeds that of credit card debt and now stands nationally at a staggering $900 billion; but it may be that the English authorities should note that even with those sums the average individual debt in the US is lower than what is now expected in England.

Student loans are sometimes presented as an easier option than straight fees, as higher education still remains free at the point of use. It is however arguable that loans have the potential to create a whole new set of problems. The British universities minister, David Willetts, has recently suggested that in reality the new post-Browne English framework is a form of graduate tax. If that is so, then it would be better to structure it that way, thereby removing what may become the major deterrent effect of large debt. Or it might be better to set fees for the wealthier students only, payable on entry to university, while creating better grants and financial supports for those less able to pay.

And for those who believe that a totally free form of higher education is best of all, it nay be important to reflect on the fact that a university system thrown into penury is in the end not a better outcome.

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Tags: graduate debt, graduate tax, student debt, tuition fees

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