Average student UK debt for undergraduates who started their courses in 2012 is likely to exceed £50,000. For students in England the debt will be nearer to £60,000.
Tough times ahead, then, for many of our younger generation. Tough times, too, for the Treasury.
The Guardian has revealed a fatal flaw in the whole strategy of student loans: 45 per cent of the £10bn paid out in loans each year will not be repaid according to a new official forecast.
The chairman of the Commons business committee has described the shortfall as a “fiscal time bomb’.
If the percentage of un-repaid loans reaches 48.6 per cent, the Treasury would have been better off not increasing the annual tuition fees to a maximum £9000, in the first place.
It seems that the plan to save money may well end up costing more.
It was Tony Blair who set the target of getting 50 per cent of school leavers into university. “Education, education, education!” was his mantra.
As ‘pass’ rates at GCSE and A-Level approached 100% the expansion of undergraduate numbers was the logical next step in the great march forward towards a truly knowledge-based economy.
How obvious it all seemed at the time, how necessary and how worthwhile.
By 2013, 38 per cent of the 17 to 30 age group held degrees. This compares with around 5 per cent in 1960 and 15 per cent in 1988.
And, interestingly, our increase in graduates has actually lagged behind many other developed countries. According to the OECD, between 1995 and 2008 we slipped from 3rd to 15th place.
Has this worldwide expansion of higher education been for the greater good of the youngsters concerned?
The answer may not be quite as obvious as it seems. It really does depend on the higher education course being undertaken. Almost half of recent UK graduates are in non-graduate jobs and 9 per cent are unemployed.
Saddled with a large debt many may regret their decision to follow the university pathway. They might have preferred the vocational courses available, for example, in Switzerland.
Most Swiss students reject the free university education on offer in favour of ‘on the job’ training from the age of 16. Its unemployment rate amongst young people is a mere 3 per cent.
The problem of expanding graduate numbers being accompanied by higher graduate unemployment and underemployment is not confined to the UK. It is an international issue.
Matters are slightly worse, for example, in the US. More surprising is that in China’s high growth economy almost half of the 2013 graduates were unable to find graduate level jobs last summer.
This follows a massive increase in higher education provision.
UK universities provide some of the best courses available in the world. However, too many are providing youngsters with inappropriate courses that lead, at best, to under-employment and a huge burden of debt that they will never repay.
This is damaging, not only to youngsters concerned but also to our economy. Vocational education and training is starting to expand in this country but it has a very, very long way to go if we are to match countries such as Switzerland.