UK Students are graduating with loan debts of around £50,000
Students in England now leave university with higher debts than almost anywhere else in the developed world. The interest rate on loans is currently 6.1% which, when typical maintenance loans are added in, will push up average student debt on graduation to more than £50,000. These figures could go even higher. Interest rates are linked to inflation and if that begins to rise, then so will the amount charged for repayments. Interest charges on loans begin to accumulate as soon as students begin their course. This means that they will have run up around £5,800 in interest charges before they have even left university. Maintenance grants in England have now been replaced with maintenance loans. Because the poorest students tend to make the most use of maintenance loans, they are now likely to leave university with loan debts in excess of £57,000. Graduates can also be penalised for ‘non-compliance’ with SLC rules; graduates are required to pay off their loan debts, whether they complete their course or not.
The Institute for Fiscal Studies (IFS) has conducted research which shows that the overall amount of student debt has doubled in four years. However, the research also says that around eight in ten graduates will never pay back their student loan in full before the 30-year limit when the loans are written off. This will leave the government with a bill for £5.9 billion per year in unpaid student loans. It also says that of the graduates that do repay, most will still be paying off their loans when they are in their 50s.
Students are less convinced that their courses represent value for money
Students are now less convinced that they’re getting value for money, with the quality of teaching being a key factor in their perceptions of value. Five years ago, 53% of students across the UK thought university was ‘good’ or ‘very good’ value but this has now slumped to 35%. Universities Minister for England, Jo Johnson says that the newly established Office for Students (OfS) should consider introducing contracts for students, to give them ‘some form of redress’ for poor quality provision, which could include ‘legal remedies’.
There are alternative pathways to gaining a University Honours Degree significantly lower than the usual £9K per year university tuition fees and in some cases within 2 not 3 years of study. Please see the Qualifi pathways open to an alternative route: http://qualifi.net/university-pathways/