Students are soon set to see the results of their A-Level examinations and move on to the next stage in their lives.
But I wonder if the euphoria felt among those of my generation lucky enough to get half decent grades is matched by today’s often more driven, high achieving students.
I say this because of the now jaw-dropping debts involved in today’s university ‘trade’. And a trade is exactly what it has become – the commoditisation of the learning production line has sent total UK student loan debt soaring. According to the Student Loans Company, it is now over £100bn.
It is a trade that is causing a potentially devastating financial trickle effect across the generations, with some parents putting their own financial security at risk to help their children – something I find every bit as concerning as the university debt burden on our young.
It’s instinctive to want to help our children, especially since many of the ‘givens’ we took for granted, such as the right to a free education, are now a thing of the past. But this is coming at a huge price.
Our own research suggests that over a third (36 per cent) of parents with adult children say they are still financially supporting them, with university costs one of the key motivators.
I don’t want to see parents struggling through retirement – frankly I want us all to have a thoroughly disgraceful one.More than half (55 per cent) of those who have helped their children admit that it has affected their own finances, stopping them from doing things they would have liked (38 per cent) and forcing them to retire later (11 per cent).
Some 6 per cent say they have actually gone into debt themselves to help out. Some 42 per cent of parents who are helping out their adult children are doing so to help with day to day living expenses.
Whilst a fifth (21 per cent) of parents are helping with cars, many parents are sharing some hefty financial burdens, including university costs (17 per cent) property (15 per cent) and paying off debts (13 per cent).
Of course I’ve never been a fan of austerity, as my own university debts testify. But while my university (credit card) debts are dwarfed by today’s mountainous average graduation debt – £50,000, according to the Institute for Fiscal Studies – they were entirely the result of my own extravagance.
The debt levels today’s graduates are facing make me feel even more sheepish about my own, entirely avoidable misspent youth.
And while there are no prizes for guessing that I came from a pretty comfortable background, it was not to the extent that my parents were prepared to foot the bill for my frippery.
Today, it’s a different story – it’s no wonder parents want to help out their children facing hefty tuition fees, given many of our own university debts were simply the result of having too good a time. But something has to give – for my own part, I’d like to see university tuition fees consigned to history.
It’s time we all realised the benefit that students bring, not just in terms of the economic value produced on what has become the learning production line.
And while we have the debate about the true value of education, let’s at least put a moratorium on the outrageous levels of interest rates as a starter for seven.
Let’s give students a chance to reap the rewards of all that revision – not bludgeon them with it – and give them something to really feel euphoric about.
And I don’t want to see parents struggling through retirement – frankly I want us all to have a thoroughly disgraceful one.
Justin Urquhart Stewart is co-founder and head of corporate development for Seven Investment Management.
