In amongst the usual reports of Mickey Mouse degrees (which I’ve covered in the past), student costs and debts are now also in the spotlight.
One survey, for the NUS, has revealed that some degree courses involve massive hidden costs.
Maths and Computer Science students have been found to spend the most ‘hidden’ money. They spend, on average, £1,430 a year on books, trips, equipment, extra coursework/exam fees and so on. Least hit are those studying a degree in Education, whose average yearly spend is said to be £432.48.
It’s no surprise that some outlay is needed to buy books and fund the odd trip, but would prospective students realise just how much money was involved in order to earmark for study-related purchases?
There is no way students can currently tell how much they need to spend on these extras. This doesn’t help when many students are only just getting to grips with financial planning and may not have enough funds to cover the cost of these necessary purchases.
Better mechanism needs to be in place to ensure students are aware of various costs, so they don’t receive surprises further down the line.
Worse still, the NUS survey also found that, as students became more strapped for cash as time went on, half of all final year students needed paid employment or a different source of loans in order to cope. All this at a time when study is so crucial, not just at that moment, but also for the future. If a student cannot put their full attention to their degree, how can they get the most from it? And how upsetting must that be when it’s costing a great deal to them in the first place?
Talking of this massive cost, another survey has revealed that student debts are rising fast. So fast, that the average rise is over 10% higher on last year, with students reaching an average £6,626 debt during the year.
The Push Debt Survey found that by the end of a degree, the average student would have a debt of around £23,500.
This morning, Radio 4’s Today programme spoke to Nick Barr from LSE (who helped design the student loans system), and NUS President, Wes Streeting, to discuss the debt report.
Barr compared credit card debt with student loan debt, arguing that “£23,000 of credit card debt would give parents sleepless nights. This shouldn’t.”
Streeting went on to say that in the forthcoming tuition fees review:
“[Barr] and others may well be arguing for a higher rate of interest for some or all students on their student loans. There is a push at the moment…for commercial rates of interest or real rates of interest on student loans and I’m glad he fully supports the current system at present.”
Barr brushed aside this comment, saying that nobody in their right mind would suggest credit card levels of interest.
Two things on my mind:
- Commercial/real rates of interest may not be as scary as credit card rates, but they’re a scary enough prospect. With the tuition fees review, they have the potential to be as scary as personal loan interest rates. And if rates do increase to reflect something higher than inflation, I imagine the loans may start to be taken into account as a true source of debt. At least in the current system, student debts are generally kept to one side. If this changes, loan applications such as taking out a mortgage could become even more difficult for new graduates.
- Massive student debts may or may not give parents sleepless nights. But isn’t this about the people who actually HAVE the debt!?
Nick Barr later said on Radio 5 Live, “this debate about student debt is very largely a red herring.”
I totally disagree. Yes, people still go to uni. Yes, applications are still rife. Yes, National Student Survey results are mainly positive. But…
No, that doesn’t mean fees are way forward. Especially if the fees could soon increase.
If the cap on student fees is raised or, worse, completely removed, it will cause more debt woes. Let’s get behind a different method of funding Higher Education!
I met the love of my life in a year out before uni. But you know what? Most of my year out was spent hanging around…a university. And I took a liking to one of the students there. So, in a way, I still found love after meeting someone at university. It just wasn’t at the uni I attended!