If you want to go to university in the UK you have to pay for it, unless you're Scottish studying in Scotland. That means getting a loan from Student Finance to pay for everything. The government being the government thinks this is a wonderful idea, but one of Theresa May's former advisers has dubbed the current system an 'unavoidable ponzi scheme'.
Nick Timothy, who resigned as Theresa May's Chief of Staff after the recent General Election, likened tuition fees to the investment scam in yesterday's Telegraph. He wrote:
"Tuition fees were supposed to make university funding fairer for the taxpayer, but more than three quarters of graduates will never pay back their debts. We have created an unsustainable and ultimately pointless Ponzi scheme, and young people know it."
He argued that successive governments had incorrectly assumed an increase in university graduates would provided a much-needed boost to the economy. Instead he says that technical qualifications are more likely to increase productivity, and backs a "single financial entitlement" that prospective students could use on any form of tertiary education - including technical courses.
Labour peer Lord Adonis expressed similar sentiments in The Times, arguing that it should be possible for fees to be lowered to the pre-2012 level of £3,000 a year or abolished outright. He is of the opinion that the "current system of fees and loans is unlikely to survive for long".
"The Labour Party is committed to outright abolition; for the Tories, Damian Green, the de facto deputy prime minister, has called for a 'debate', while universities minister Jo Johnson floats a 'review'. It feels like Margaret Thatcher's infamous poll tax a few months before its abolition."
Meanwhile universities minister Jo Johnson defended the system, telling Prospect Magazine that "the English system works".
"Young people from the poorest areas are now 43% more likely to go to university than in 2009/10, and 52% more likely to attend a high tariff institution. Our universities now enjoy 25% more funding per student per degree than seven years ago. And the system is fair on taxpayers: a university degree boosts lifetime income by between £170,000 and £250,000. Students pay on average roughly 65% of the cost through fees, while the taxpayer shoulders around 35%, through teaching grants and loan subsidies, and a much higher share if we add £6bn of annual investment in research. This is an equitable split."
I have to agree with Nick Timothy, because from my experience the student loans system is a waste of time. I graduated in 2012, and in those past five years I have barely made a dent in paying back the amount of money I supposedly owe. Here's the thing, student loan debt isn't like bank debt.
You only make payments on earnings over a specific amount (currently £17,775 pa if you started before 2012, and £21,000 pa if you started later), but if you don't there's no obligation to pay it back. It doesn't affect credit ratings since it's not deemed 'uncontrolled debt', so it's never been an issue for me when renting a flat or getting phone and internet. It also supposedly gets written off if you haven't paid it off after 25 years, and the more you borrow the more likely that is to happen.
Some people will pay it off, and some people won't. Personally I feel that makes the whole system utterly pointless, since the loans system has effectively become a graduate tax. I'm a big supporter of free education at all levels, but if the government insists people must give something back in exchange for higher education they might as well just scrap loans and make the 'graduate tax' official. And, of course, promote other education and training that doesn't involve spending three years in academia. [BBC News]