We must reshape the debate around student debt

By Luca Mattinson

In our political and media landscape, the truth is distorted and manipulated so that it is difficult to decipher fact from fiction.  Armchair activism and social media have allowed clickbait headlines to quickly enrage millions.  But amidst this smokescreen of daily of politics, we have allowed a falsity to pass without scrutiny and become normalised: student debt.

The idea that graduates leave university with crushing levels of debt, and so university is only affordable to those with parental support is commonly held.  Indeed, the idea is so pervasive that Jeremy Corbyn’s Labour manifesto promises to eradicate fees altogether.

This is not only a wrong and hollow sop to the middle classes, its consequences are also dangerously regressive.  Parents, believing that they are helping their children avoid burdensome debt are remortgaging, or even selling, their houses.

Perhaps even worse is that consequently many young people do not even consider university because they fear they cannot afford it.  These attitudes have to be changed and the progressive case for student finance must be made.

Student loans do not operate like standard debt. Firstly, they do not affect your credit rating, as with other forms of debt.  Moreover, if you do not earn over the £25,000 threshold then you won’t repay anything, and after thirty years any outstanding student loan is written off by the government.

Student finance is better viewed as a graduate tax. Those citizens who have a university degree pay an additional tax rate of 9% on any income over £25,000.  This is a progressive taxation instrument, designed to balance against the extra lifetime salary that a graduate receives compared to a non-graduate, know as a ‘graduate premium’.

It also means that an individual who does not attend university is not subsidising the tuition of the beneficiary of a degree.  The myth that student finance creates an insurmountable debt burden is exactly that, and it is time for this narrative to be properly challenged.

Everyone who wants to can attend university — this must be made crystal clear. A means-tested maintenance loan ensures that low household income does not act as a barrier to attendance. The idea that only the wealthy can access university is untrue and only tells poorer students that a degree is unobtainable to them.

The highest earners pay the largest amount back, and those that do not earn over the threshold do not repay until they do so.  In fact, evidence from Scotland clearly shows how the absence of fees has led to a decline in the number of poorer students attending university since 2011.  In England, the opposite is true: universities are better funded and can offer more places to those from poorer backgrounds.

The ideas mentioned above have not been created and promoted in isolation. They are propagated by those with an ideological agenda opposed to the individual taking responsibility for their own university education.

We are now in a position where a generation of students may deny themselves a university education for fear of both not being able to afford it and amassing vast amounts of ‘debt’.  This is not only fundamentally irresponsible, but it is also morally unacceptable.  The fallacy of student debt must be exposed for the chimera it really is.