Your student loan: at the time, it may like free money and get blown on overpriced cocktails or reckless Ubers home from somewhere that you could have walked back from. But once you leave university, your student loan debts are very real. A worrying new study conducted by the Institute for Fiscal Studies (IFS) shows Brits have the highest student debts in the developed world. Wooo!
The IFS report also found that your student loan will probably take you into your fifties to pay back. If you ever do, that is - three-quarters of students will never manage to pay off the debt, as it is written off after 30 years. Clearly, if the majority of students are going through life unable to tackle this enormous, something is not right in the system. Our student loan debt should be an amount which is vaguely achievable or realistic for us to be able to pay off.
But how to achieve this goal is a tricky issue around which there is much debate. Tuition fees again became a high-profile issue during the May general election when Labour leader Jeremy Corbyn vowed to abolish tuition fees, a promise which won him the vehement support of much of the 18-24-year-old age group. He urged the youth to mobilise and use their ability to vote on issues like these, which were actually relevant to their lives. The youth listened and responded, with 72% of this age group using their voice by voting in this election. This was the highest youth turnout in years, whereas many youths in the past had remained apathetic to political elections. However, perhaps to scrap fees entirely is an overly idealistic pipe dream, as this move would cost the government £11 billion.
You better start saving, because the bleak IFS study also revealed that the average debt which a current student will now be saddled with on the day of graduation is a whopping £50,800. The enormity of this number is partly thanks to the £5,800 worth of interest the loan will have gained while they were still studying. This interest incurred is owing to the 6.1% interest rate, which stands a slightly ludicrous 3% above inflation. One way to lessen the heavy £50,000 burden handed to students is to slash this very high-interest rate, as for many interests builds up too fast to keep up with the repayments.
With even Damian Green, the Conservative’s first secretary of state, admitting a few days ago that student debt was “clearly a huge issue”, tuition fees are ripe for a massive rethink.
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This article originally appeared on The Debrief.