Will the student loan repayment threshold create legacy problems for the Tories?

By

Throughout my years in the British education system, I was comprehensively told that without a university education, I may as well consign myself to a life grunting “would you like fries with that?”. In an ever-increasingly more competitive job market, a university degree was simply a fundamental tenet of any job application. 

It was regularly suggested that the point of a degree was not to actually learn, but rather to have a ‘standard of education’ to highlight to any future employer that you were a functioning member of society. Education was about the grades you could show-off at the end, not the knowledge you’d actually gained in the process. Enjoying what you studied was irrelevant if it got you that shiny piece of paper and £60,000 debt at the end of it.

The Government’s proposal to lower the repayment threshold for student finance from £27,250 to £23,000 is a clear sign that Nadhim Zahawi amongst others have decided that vocational training and apprenticeships are the way forward.

The move towards vocational and apprenticeship-based training is something I am in favour of. However, the government is attempting to enforce it in as heavy-handed and duplicitous a way as possible. Rather than attempting to highlight the benefits of vocational training to the next generation, they are punishing those who already have a university education. 

Lowering the threshold to this level will increase what most post-2012 graduates are paying by around £400. It will also hit the lowest earners disproportionately hard, as the interest on their payments continues to rise the longer it takes them to pay it off. Higher earners, who are less affected by the repayments in the first place, will have to pay less interest as they will be paying off the loans at a far quicker rate. When the large proportion of graduates who don’t earn over £30,000 individually are still paying off their student loans in thirty years, the regular payments will be a helpful reminder of this broken contract, a basic betrayal of good will. 

The less money we have, the less we can save, and the less likely it is we ever start climbing the property ladder

Whilst a lot of people, particularly university graduates, commonly turn to the Conservative party at around the age of 30, these payments may have such a significant impact that this could no longer be the case. As Martin Lewis argued recently, the lowering of the threshold could lead to a fertility crisis. Most of our generation hold the mindset that we will wait for a basic level of life security before we choose to have children. Lower salaries due to loan repayments will mean this life security could come later, so we wait later to have children. At some point, biology could then intervene, and our generation may have waited too long.

A similar situation applies to housing. We are already part of ‘Generation Rent’ and lowering the threshold certainly will not help to change that any time soon. The less money we have, the less we can save, and the less likely it is we ever start climbing the property ladder. Data from the last few elections has demonstrated a clear Labour tendency for renters and a clear Tory tendency for homeowners. It’s not unreasonable to suggest that moving forwards, the more renters there are, the fewer Conservative voters there will be.

We are saddled with debt and useless degrees

Since student loans and paying for university education were enforced, a university education became the norm, a necessity if you’d like a decent job. However, because everyone now has a degree, and an imposingly large pile of debt behind it, both the degree, and the debt, are far more of a burden than a privilege. 

Now, we are saddled with debt and useless degrees. The next generation will be more likely to focus on apprenticeships and vocational training, until everyone the Education Secretary pushes the focus back to degrees. Put bluntly, the £2 billion the Government are rumoured to be saving by lowering the threshold means little, especially considering the time it will take to come into effect on the Government’s plan to ‘level up’ Britain, as less and less graduates can afford to live in London and move to cheaper areas in search of security. 

However, for the most part, the proposed change is ham-fisted and may well come back to bite the Conservatives. The more graduates that cannot afford to buy houses and have children, the fewer Tory voters there will be moving forwards. Something might finally stick to this Teflon-coated government.

Image: Pxfuel

Leave a Reply

Your email address will not be published.

 

This site uses Akismet to reduce spam. Learn how your comment data is processed.