Kemi Badenoch asserts that student loans ‘increasingly feel like a scam’. She’s right. The Tory leader was referring to one type of loan but what she said applies to all of them.
They aren’t just a scam. They are a conspiracy against young people by older ones. The culprits are politicians of all parties, university administrators and university lecturers.
Culprit-in-chief is of course Tony Blair. He is the architect of so much that is wrong with our country from uncontrolled immigration to under-resourced Armed Forces, whose members were nonetheless expected to fight, and sometimes die, in Blair’s futile wars.
In September 1999, just over two years into his first term, Blair announced that 50 per cent of young people, about double the then proportion, should go to university. How would this be paid for? By them, of course!
Like most of his generation, Blair had got a full grant when he studied at Oxford during the 1970s. With his apparently arbitrary target of 50 per cent, he set about transferring the financial cost of higher education from the State to students, many of whom were recruited on a false prospectus.
A revolution followed during which universities, sometimes third-rate, flourished as they flung open their doors to young people who believed they would receive a life-changing education that would enhance their job prospects.
Many did benefit, of course, but some didn’t. The more unfortunate have discovered that studying for Mickey Mouse degrees at souped-up former polytechnics is not the path to El Dorado. And yet they are weighed down by huge debts. The average liability is now over £45,000.
Kemi Badenoch was specifically talking about Plan 2 student loans taken out between 2012 and 2023 – years in which the Tories were in charge – but those who took out loans before 2012 or after 2023 are scarcely jumping for joy.
Kemi Badenoch is right to place more emphasis on apprenticeships and right to castigate the Blair administrations for ‘creating loads of crap courses’ in poor universities
If you are one of the estimated 5.8 million people under the Plan 2 scheme, you will have to earn at least £66,000 a year simply to keep up with interest payments. Until you reach that substantial salary, your debt will actually increase.
Interest rates charged by the Government are extortionate. Up to 3 per cent is imposed on top of the rate of inflation under Plan 2. Rachel Reeves has recently twisted the knife by freezing for three years from April 2027 the threshold at which you have to start repaying the loan.
On average, people will have to repay an additional £7,690 as a result of the Chancellor’s freeze. If a loan shark altered terms and conditions in such a way, he would receive a visit from the boys in blue.
People who are repaying their student loans – and the threshold is currently £28,470 under Plan 2 – are in effect shelling out a supplementary income tax that takes a further 9 per cent of their income.
How contemptible that, in justifying her freezing of the threshold, Rachel Reeves said it would help bring down NHS waiting lists. The Government is squeezing extra cash out of former students who are being bled dry by high taxation.
Many of the young are already struggling. They can’t easily find affordable housing, and they suffer like the rest of us from living in a sclerotic, low-growth economy. Some face the extra burden of student loan repayment. Is it any wonder so many of them feel disenchanted and alienated?
The Government forecasts that around half will never pay off their student loan debts, which will be written off after 30 years, with the State picking up the tab for untold billions. According to the Centre for Social Justice, more than 700,000 university graduates are out of work and claiming benefits.
Their expensively acquired degrees have evidently not made them readily employable. It’s hardly surprising if some young people prefer to claim welfare, and jog along through life, while waiting for the State to pay off their massive debts.
Kemi Badenoch should be congratulated for promising to reduce the interest repayments for the victims of Plan 2. Who cares if cynics say she is trying to bolster the Tories’ low popularity among the young, who not unreasonably blame the party for having hiked student loans in 2012?
She is right to place more emphasis on apprenticeships, right to castigate the Blair administrations for ‘creating loads of crap courses’ in poor universities, and right to undertake to reduce the annual intake of university students by 100,000.
Si Tony Blair’s transformation has been disastrous in so many ways. Its fundamental error was to assume that almost anyone could and would benefit from a university education
What a mess! There’s another aspect that should make those struggling with student loan repayments in England boil with rage. North of the border, Scottish students don’t have to pay tuition fees at all.
They enjoy a subsidy from English taxpayers under the so-called Barnett Formula. This is a grotesque inequality, and an indictment of yet another of Tony Blair’s disastrous pet projects – namely devolution.
It can’t be right that young people in one part of the United Kingdom are largely debt-free (though Scots may have to pay for their maintenance at university) while millions of their fellow citizens in England are groaning under huge debts that may disfigure their whole lives.
People say that Britain has some of the best universities in the world. Maybe we do, though I have my doubts. What is certain is that we have many mediocre ones.
Even at the so-called elite institutions, students often find that in return for huge fees they receive scant tuition and negligible supervision from lecturers who are more interested in writing books that will only be read by a handful of their academic counterparts.
Universities were of course only too glad when tuition fees were first introduced but, as these have failed to keep pace with inflation, they are forced to look abroad for students, who pay much higher fees.
The business model of most of our universities depends on high numbers of foreign students – about half in the case of institutions such as University College London – which has been a significant factor in boosting mass immigration.
Meanwhile these same universities (whose undeserving vice-chancellors often pay themselves salaries of several hundred thousand pounds) have increased the number of firsts and 2:1s that they hand out by a factor of two, three, or even four times.
They claim their bright students are much cleverer than they were 30 or 40 years ago. Can this really be so? Or are at least some of our universities devaluing degrees in order to make themselves more attractive to prospective students?
Blair’s transformation of the university system has been disastrous in so many ways. Its fundamental error was to assume that almost anyone could and would benefit from a university education, and that there was something intrinsically more worthwhile about white-collar jobs than blue-collar ones.
Thank goodness Kemi Badenoch has had the courage to speak out, although it is going to take a lot more than reducing interest charges to undo the ill effects of the Blairites’ misguided revolution.
Of course there has been a conspiracy against the young. Many still make the best of it, but pity those with degrees that haven’t led to the jobs they dreamt of, and are weighed down by debts they can’t repay.