Student fees are set to treble in 2012, with institutions given the green light to charge up to £9,000 a year (in ‘exceptional circumstances’), £2,700 more than the current fee cap. Student debt is already a massive issue in the UK. A recent Freedom of Information request by the BBC revealed the true extent of the current problem.
The biggest debt outstanding to the Student Loans Company at present is a staggering £66,150 and is expected to rise under the new structure. With the current university tuition fee cap at £3,290 a year, it seems unbelievable that a debt of such magnitude could ever be acquired. However, when you take in to account the substantial costs of living in the UK (particularly in the South) it is clear to see how the amount soon tots up. Many students rely on maintenance loans to help with living costs, averaging at £5,000 each year. Students in London can take annual loans of up to £7,000, pushing them further into debt.
Under the new structure, students beginning courses in 2012 and thereafter are expected to be faced with debts in excess of £80,000 if attending the top institutions. As universities begin to reveal their fee increases for next year, most students can expect to pay £6,000 a year, leaving students with debts of £70,000 after a five year course.
The argument is that graduates are expected to take on higher paid jobs after completing such courses, but as we know full well, graduates are finding it harder and harder to find work in the current economic climate. But what about those taking on standard three year degrees, leaving university £33, 000 in debt with no guarantee of employment? According to a leading accountant, students borrowing £39,000 for a three-year course could end up paying over double that back in cash terms.
Many students will be deterred from attending a higher education institution as they are priced out of the equation. Students from poorer families could be eligible for Government funded scholarships, but this will only be for the highest achieving students. The UK could well see the number of new graduates decrease over the coming years, which would even out the proportion of jobs to graduates, but only time will tell. Only the top earners will be able to get themselves out of debt after university, leaving everyone else firmly within its grasp.