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Poorest students will leave university £57,000 in debt

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In a new study conducted by the Institute for Fiscal Studies (IFS), it is apparent that students from the poorest 40% of households in the UK will graduate with around £57,000 of debt, compared to those from the richest 30% left with £43,000 left to repay. It also finds that 45% of all student debt will never be paid off.

A spokesman for the IFS claimed that the changes made in the past few years to student finance have been “heavily focused on further reducing the cost to central government” and that in turn, they had made the system far more unequal.

“Replacing maintenance grants with loans reduces the government deficit but results in students from low-income families graduating with the highest debt levels.”

Labour’s shadow higher education spokesman, Gordon Marsden, welcomed the study’s findings as they prove the effect the government has had on student debt and blew holes in its defence of actions.

“From scrapping the maintenance grant to freezing the repayment threshold [at which students start repaying their loans], this government has focused on increasing the debt burden of students from disadvantaged backgrounds.”

“Under the Tories, student debt continues to rise with no end in sight, and students will now graduate with a shocking average of over £50,000 in debt. The government must decide if they believe a lifetime of debt and a tax on aspiration are the best way to fund our higher education system.”

The total value of student debt rose to over £100bn for the first time earlier in the year, with remaining debt on loans rising by 16.6% to £100.5bn at the end of March – this was a rise from £86.2bn the year previous. Added to this, there has been an inflation rate surge, with students now paying 6.1% interest on their loans: “Students from the poorest 40% of families now accrue around £6,500 in interest during study”.

Universities minister Jo Johnson claimed that the government being likely to scrap the current student finance system was “misguided speculation” when writing for The Guardian this week. In his article he also stated that “abolishing fees would be mind-bogglingly expensive, requiring over £100bn additional spending between now and 2015”, essentially tackling the Labour party’s view to cut higher education fees in their entirety.

In response to the IFS report, NUS Vice President for Higher Education, Amatey Doku, stated: "Today's IFS report is the latest piece of damning evidence that confirms the government's current higher education funding system is failing. This research reinforces what NUS has always said: saddling students with high debts, high interest rates and low repayment thresholds is a recipe for disaster for students, graduates, and for the taxpayer.

"In the past week we have seen discontent within the government about their current approach to education funding. Now they must listen to the evidence before them and create a funding system that recognises education as a public good, makes sense for the taxpayer and doesn’t shut people out of education”.




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