Lots of graduates will never pay off their loans, which is the point

Graduating into a recession is hard; at least you can not pay your loans until you earn a bit.

The Telegraph reported yesterday that "at least 40 per cent of student loans will never be repaid":

Around four in 10 graduates will have their student loans written because they will never earn enough to pay them off, researchers claim.

At least 40 per cent of the cash borrowed by students will never be repaid - a figure far higher than Government estimates have previously suggested.

Ministers had previously believed that around one third of the total students loan bill would be lost as those students fail to make enough money to pay it back.

However, leading university vice-chancellors, who carried out the study for the Institute for Public Policy Research, suggest that the total would in fact be closer to 40 per cent.

This is the second volley I've seen in what looks like a campaign to justify raising the cost of education without raising the actual tuition fees. The first came earlier this month, as the Guardian reported on moves to lower the level at which students would have to start repaying their loans.

Here's what's happening. Tuition fee loans are paid by the Government to the universities; maintenance loans are paid by the Government to the students. The students then pay the loans back, with interest – currently set at RPI plus 3 per cent – until either they have been paying for thirty years, or they have fully paid off the loan. The payments are 8 per cent of income above £21,000, a threshold which was originally planned to rise with inflation, but now looks likely to stay the same in nominal terms, thus increasing the number of graduates having to pay.

A subset of students will, therefore, not fully pay off the loan. This has always been known; the problem is that the initial calculations incorporated the same level of hopeless economic optimism as all the other Government departments (or, to put a more partisan spin on it, the initial calculations did not take into account the fact that the Government's austerity programme would smother the recovery in its cradle). Which means that, rather than a third of students not expected to pay off their loans in full, it is now four in ten – because fewer graduates are employed, and those which are are earning less.

The IPPR report which sparked the Telegraph's piece suggests that one way to deal with the problem is:

The creation of a new generation of cut-price degree courses priced at £5,000-a-year – significantly less than the current £9,000 maximum – for “stay-at-home” students to cut down on the amount of money being loaned by the Government.

The idea is that of students take these courses, then they could be barred from taking out maintenance loans, cutting the overall amount borrowed substantially. Of course, the university would still have to work out how to save £4000 on the teaching of a "stay-at-home" student.

It is clear that the complete mismanagement of the tuition fee increase by this government has left a black hole in the higher education sector's finances. But every suggestion as to how to manage that so far involves putting the burden on students and graduates – and even then, on only the graduates who started university in 2012 or later, who have already paid three times more that the students who immediately preceded them.

In the end, what's happened is that this generation of graduates is experiencing grave misfortune, with the highest levels of youth unemployment since records begin and a prolonged decline in real wages; that misfortune leads to the expectation that record numbers of them will, in essence, default; and much of the response is based around finding ways to extract more money from them anyway.

IPPR's proposal is better than most, in that it is at least looking for ways to save students money; but it still leaves them picking up the tab for the Government's incompetence.

Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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No, Jeremy Corbyn did not refuse to condemn the IRA. Please stop saying he did

Guys, seriously.

Okay, I’ll bite. Someone’s gotta say it, so really might as well be me:

No, Jeremy Corbyn did not, this weekend, refuse to condemn the IRA. And no, his choice of words was not just “and all other forms of racism” all over again.

Can’t wait to read my mentions after this one.

Let’s take the two contentions there in order. The claim that Corbyn refused to condem the IRA relates to his appearance on Sky’s Sophy Ridge on Sunday programme yesterday. (For those who haven’t had the pleasure, it’s a weekly political programme, hosted by Sophy Ridge and broadcast on a Sunday. Don’t say I never teach you anything.)

Here’s how Sky’s website reported that interview:

 

The first paragraph of that story reads:

Labour leader Jeremy Corbyn has been criticised after he refused five times to directly condemn the IRA in an interview with Sky News.

The funny thing is, though, that the third paragraph of that story is this:

He said: “I condemn all the bombing by both the loyalists and the IRA.”

Apparently Jeremy Corbyn has been so widely criticised for refusing to condemn the IRA that people didn’t notice the bit where he specifically said that he condemned the IRA.

Hasn’t he done this before, though? Corbyn’s inability to say he that opposed anti-semitism without appending “and all other forms of racism” was widely – and, to my mind, rightly – criticised. These were weasel words, people argued: an attempt to deflect from a narrow subject where the hard left has often been in the wrong, to a broader one where it wasn’t.

Well, that pissed me off too: an inability to say simply “I oppose anti-semitism” made it look like he did not really think anti-semitism was that big a problem, an impression not relieved by, well, take your pick.

But no, to my mind, this....

“I condemn all the bombing by both the loyalists and the IRA.”

...is, despite its obvious structural similarities, not the same thing.

That’s because the “all other forms of racism thing” is an attempt to distract by bringing in something un-related. It implies that you can’t possibly be soft on anti-semitism if you were tough on Islamophobia or apartheid, and experience shows that simply isn’t true.

But loyalist bombing were not unrelated to IRA ones: they’re very related indeed. There really were atrocities committed on both sides of the Troubles, and while the fatalities were not numerically balanced, neither were they orders of magnitude apart.

As a result, specifically condemning both sides as Corbyn did seems like an entirely reasonable position to take. Far creepier, indeed, is to minimise one set of atrocities to score political points about something else entirely.

The point I’m making here isn’t really about Corbyn at all. Historically, his position on Northern Ireland has been pro-Republican, rather than pro-peace, and I’d be lying if I said I was entirely comfortable with that.

No, the point I’m making is about the media, and its bias against Labour. Whatever he may have said in the past, whatever may be written on his heart, yesterday morning Jeremy Corbyn condemned IRA bombings. This was the correct thing to do. His words were nonetheless reported as “Jeremy Corbyn refuses to condemn IRA”.

I mean, I don’t generally hold with blaming the mainstream media for politicians’ failures, but it’s a bit rum isn’t it?

Jonn Elledge edits the New Statesman's sister site CityMetric, and writes for the NS about subjects including politics, history and Daniel Hannan. You can find him on Twitter or Facebook.

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