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Tuesday, August 14, 2007

Inevitable debt burden

The Independent reports that first-year university students are totting up record debt levels of nearly £6,000 a year and face leaving university owing more than £17,500. This is a 25.5% increase on the debt levels incurred by first year students in previous years.

For some reason the University of Glamorgan has the second highest level of first-year student debt in the country with an average of £7,942. Two of the three universities where students have the least debt are in Scotland - Robert Gordon with £1,103 and Abertay Dundee with £1,123 - where they do not have top-up fees.

The paper tells us that the publication of these figures coincide with a study by financial experts that shows student debt has risen by 167 per cent in the past decade - from £1.2 bn to £3.2bn. The study, by uSwitch.com, says it will take the average student 11 years to clear their debts.

A third study shows that youngsters who opt to go on vocational courses will be as much as £70,000 ahead of their graduate counterparts by the time they have completed their degree at the age of 21.

The Association of Accounting Technicians says that figure is the amount that vocationally trained students will have earned on average by the time university graduates are looking for work with average debts of £13,000 a year (at present).

The Government continue to contend that debt levels are not putting youngsters off going into higher education and that application levels are up again. Surely though we are getting to the point where the advantages of a degree are outweighed by the financial consequences. Furthermore, those who are most debt-adverse, often people from the poorest backgrounds and single-parent familes, will be deterred from fulfilling their potential by going on to higher education. If we are to continue to produce the managers, scientists, and entrepreneurs of the future then this is a problem that needs addressing.


There is no evidence that those from poorer backgrounds are being put off by fees - not least because univs have to offer them large grants by law.

That said, few people from poorer backgrounds went to univ now or when it was free. Sadly few people from very poor backgrounds stay on after 16.

Tim Leunig, London School of Economics
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