Student Debt

1 September 2022

Student Debt

Joe Biden’s initiative.

By Robert Kilconner

$330 billion is a lot of money and it is also the price tag on President Biden’s proposal to reduce outstanding student debt. American students typically leave university owing around $25,000 and the proposals involve the write off of much of this. Ex-students earning less than $125,000 will be let off up to $10,000 while those on Pell hardship grants can be forgiven twice as much, with the balance, if any, being completely written off after 20 years.

Needless to say the proposals have been criticised on a number of grounds. Does their announcement two months before the mid-term elections mean that they are a bribe designed to secure the votes of those affected? Is it right that those with university degrees should be being subsidised by their compatriots who have not had that opportunity? How is this fair to those who have already paid off their debts and so will not benefit? They are all perfectly fair questions but they are also all a little beside the point because they focus on the individuals concerned at the expense of the bigger picture; that is a picture which is relevant to the UK just it is to the US.

Back in the 1970s, when your correspondent was at a British university, there were no tuition fees at all. Living costs were funded by a system of grants, varying from £50 a year to those with well-heeled parents to much greater amounts for those who needed it. In effect then the state simply paid for university education on the basis that it was for the public benefit to have as many educated people as possible. That things have changed is not so much due to a revision of that judgement but rather due to financial pressures. John Major’s dream of university education for all greatly increased the number of students and the cost of providing for them. The introduction of tuition fees encouraged spending increases in the academic sector and that in turn pushed those fees to their current level of £9000 a year.

It is all very understandable no doubt but the consequences for society at large are unfortunate. In a fast changing world we need to push up levels of education so that people can adapt to different requirements as their careers progress. More of those decisions currently made on a box ticked basis need to be under the control of people capable of exercising discretion if we are to humanise public services; the current tilt of resources towards the elderly and away from the young needs to be addressed if social stability is to be preserved.

In the end it simply cannot be right that so many of our young people see student debt as a major burden with the potential to overhang their careers. As they look at the older generation who bought houses or flats in the days when they were affordable, who benefit from the triple lock state pension and whose transport and entertainment are heavily subsidised, they must just wonder just why they and their friends have been left out. It isn’t healthy that the generation on which we rely to take our civilisation forward should have grounds for this sort of resentment. The table needs to be gradually tilted back in their favour and a reduction in the University debt burden would be a sensible place to start. You will often hear people complaining that what starts in America comes over here. Hopefully Biden’s proposals will start a trend of reducing education costs for students and that it is a trend which we in Britain will ultimately follow.

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