WTF Happened This Week? If Student Loans Were Bank Loans There Would Be Serious Trouble

You need to know on WTF happened this week in news

If Student Loans Were Bank Loans There Would Be Serious Trouble

by Vicky Spratt |
Published on

This is your weekly instalment of WTF is going on because, these days, a lot can happen in a week…

Another week in news. More news than you could possibly ever keep up with but don’t worry, we’ve got you covered.

After much ‘no deal is better than a bad deal’ posturing and theatrics today it was announced that Brexit talks can progress to the next stage by European Commission president, Jean-Claude Juncker. We know, we know…everyone was saying they’d never reach a deal so what does this mean? In short, not much. It means the next phase of negotiations can now take place but, in short, nothing has really changed as the final deal isn’t done until it’s done and that’s still a long way off.

In any case, you might argue that Brexit is just one big distraction from the long-term problems we, as a country, face. And, if you wanted to go further, you could say that perhaps those problems, in part, contributed to the decision of some people to vote leave in the first place.

One such problem is large scale inequality which is becoming increasingly hard to ignore. Earlier this week the Government’s entire Social Mobility Commission quit, saying that it just wasn’t possible to sort inequality right now because Theresa May and her team’s bandwidth is taken up with Brexit. This happened as a report was released showing that a total of 14 million people are currently living in poverty in the UK, that’s more than one in five people across the country. The numbers of children and pensioners living below the poverty line have risen over the last five years.

Everything is connected and when policies affect people, people will in turn affect politics by changing the way they vote as we saw last summer when Theresa May failed to win the majority she expected.

Which brings us to the total shit show that is university fees. Today, the National Audit Office said that if English universities were banks, they would be investigated for mis-selling because students say they are not getting value for money. When fees are £9,000 a year, that’s not hard to believe.

What does value for money look like when you’re paying nearly ten grand a year to be in education before you’ve even paid rent or bought food? It looks like a lot of contact time and walking into a good and reasonably well-paid job as soon as you graduate but, for many students, this just isn’t the reality.

According to a new report by a government watchdog only one in three students say they feel they are getting value for money from their university. Meanwhile, a debate rages on about whether those in charge of universities should be pocketing six figure salaries.

The National Audit Office have said that the Department for Education needs to do more to make sure students are getting a good service in return for shelling out nearly £30,000 throughout their time at university. They said ‘if this was a regulated financial market, we would be raising the question of mis-selling’, that’s when a bank offers consumers a product based on misleading advice. If a university charges thousands of pounds on the basis that getting a degree from their institution is going to increase your career prospects and that just isn’t the case then there are definitely questions to be asked about whether the government is justified in allowing them to charge us so much.

Fees are now so high that the average loan is expected to be £50,000, including interest, by the time it is repaid. A student loan is one of the biggest financial obligations you will ever have, next to a mortgage. Which, neatly, brings us to another important problem which is being overlooked because of Brexit: the housing crisis.

The truth is that many of the young people currently paying top end tuition fees in order to get degrees that may never pay out financially (because wages are staying relatively low) are also increasingly unlikely to ever be able to buy a home of their own.

Why? Part of the answer lies in the fact that Thatcher’s government decided to sell off a lot of this country’s social housing back in the 1970s, leaving us with an affordable housing shortage and an over inflated property market. Today it was revealed that forty per cent of homes which were sold under one of Thatcher’s flagship policies, Right to Buy - which was intended to help people get on the property ladder – now belong to private landlords who charge private tenants, some of whom need housing benefit to pay their rent, as much as they possibly can to live in them.

One day, perhaps the decision to raise tuition fees to £9,000 a year will come back to bite politicians the way that Right to Buy has. What will the long-term impact of Brexit be on a generation who start their adult lives with tens of thousands of pounds worth of debt if they do decide to go to university? What will happen to those who spend much of their income paying off that debt and lining a private landlord’s pocket? Nobody knows and, right now, nobody really cares because…Brexit.

You might also be interested in:

WTF Is Going On With Brexit

Turns Out There Is A Secret Brexit Plan After All

How Does Your Student Loan Actually Work?

**Follow Vicky on Twitter **@Victoria_Spratt@Victoria_Spratt

This article originally appeared on The Debrief.

Just so you know, whilst we may receive a commission or other compensation from the links on this website, we never allow this to influence product selections - read why you should trust us