OpinionAug 8 2017

Don't bludgeon students with debt

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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.