The Problems with Student Loans | @srcav

cavStephen Cavadino is a maths teacher (and fanatic) from Leeds. He is a member of the Labour party. You can read of his musings on maths, teaching and life at cavmaths.wordpress.com . When he isn’t teaching; writing about, or doing maths he spends the majority of his time with his family, watching rugby (both codes) and playing guitar.

I believe that higher education should be free at the point of use, and for this reason I see many flaws with the current system which allows people to access it. I can see the argument that it should be those who benefit from it that fund it, but the current system is drastically flawed. A much better system, in my opinion, would be the much talked of graduate tax. The current student loan really is a graduate tax, it only kicks in when you earn a certain amount and is taken at a proportion of your earnings, but that’s not easily recognisable from the name. Perhaps it’s a rebranding exercise that’s needed. Either way there is a negative view of the loan among many of the population, normally stemming from the word loan being included.

I knew a student a few years back who wanted to go to uni but was against the idea of a student loan as he didn’t want to be indebted to anyone. He was worried about the idea of a loan, but once he investigated it an realised it’s true nature he did go and succeeded at higher education.

Another flaw is how it’s calculated. Mature students are fine, it’s calculated on their household earnings and worked out against what they need. For 18 year olds it’s calculated against parents earnings, which means that some young adults are unable to access university as their parents won’t support this decision. This seems wrong to me, I agree that it’s fine for the majority of cases cut not everyone has parents who are willing to support them. Some parents turf their children out at 18, some even earlier, some refuse to see the value in education, and some use this as leverage to keep control over their children in an unhealthy manner.

I’ve known people who didn’t go to uni for these very reasons, or who had their degree choice and uni choice dictated to them, dropping out because they didn’t want to study the subject they ended up in. Some have gone back as mature students, but not all, and this is a shame.

I feel that removal of the monetary value of debt and replacement with grants, that cover tuition and cost of living, would be a far better situation and combat both the issues outlined above. If this is then funded by a graduate tax worked out in a similar manner to loan repayments then the funding should look after itself. Another added benefit would be that it would eliminate the potential marketisation of universities which is something we are likely to see more of over the coming years.

2 thoughts on “The Problems with Student Loans | @srcav

  1. All good comments. I think it also worth highlighting that current or future students got screwed by Osborne in the budget.

    Previously, the salary threshold for repaying students loans was due to track a value (I think CPI?) and thus would increase to reflect changes in the value of money and cost of living. The recent budget axed that decision and instead went for a flat rate guaranteed till 2020 despite consultation almost unanimously saying not to because it’s regressive (a similar story to what happens with teacher’s pay – consultation, unanimous response, promptly ignored).

    The worst thing about this is that it reneges on a previous announcement. As Martin Lewis notes, if a private company tried to do this with a loan they wouldn’t be allowed to by the regulator.

    http://www.moneysavingexpert.com/news/loans/2015/11/autumn-statement-2015-hidden-retrospective-hike-in-student-loans-repayments-a-disgrace

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