Student debt: the £40k question for Lord Browne

How would you like to begin your adult life with debts in excess of £40k? Well this appears to be the reality that former chief executive of BP, Lord Browne, who has been charged with a review of university funding and student finance will recommend.

According to leaks from his report, students starting university in 2012 would face a doubling of the current level of tuition, recommending that fees should rise to a minimum of £7k per year. But not content with just doubling graduate debt he also plans to slap on an additional rate of interest onto all graduates, on a sliding scale that will increase with earnings.

Their parents may have just lost their child benefit for these very same children, but this is a generation that will now be asked to start their adult life already owing as much as £40k. Aaron Porter

At a time when graduate employment is so bleak, what does this mean for the generation currently in school and perhaps starting to think about going to university? Their parents may have just lost their child benefit for these very same children, but this is a generation that will now be asked to start their adult life already owing as much as £40k, struggling to get onto the housing ladder, possibly working into their seventies with little prospect of a state pension.

How can it be, that we are all in this together when the suggestion will be that those yet to go to university are already being asked to start life in massive debt and to shoulder the burden for upcoming government cuts to universities?

Universities Minister David Willetts recently published a book called The Pinch looking at inter-generational unfairness and how the baby boomers have stolen the financial future of their children. He would be well served to practice what he preaches in government.

Who knows Lord Browne?

'It will be fundamentally wrong for poor families to have the biggest debts', former Liberal Democrat MP Evan Harris tells Channel 4 News
The main issue is that the policy is wrong because wealthy families will pay the fees themselves and those kids when they are older, in well paid jobs, will face no interest rates, let alone high ones, because they won't have debt. 

The people who will have the debt are the people who don't have the family support to provide them the cash. They are the ones who will have to take out these very high loans and have these very high levels of debt. 

That's fundamentally unfair, it deters people from applying to university and it distorts career choices on graduation. That's why all of us as Liberal Democrats stood on a platform that if we won the election we'd abolish fees and that's why when we didn't win the election we did not commit ourselves as Liberal Democrats backbenchers to vote for a fee regime.

The coalition agreement made clear that my former colleagues will not have to vote for a continuation of the fee regime. And, if the package is as described in the papers, I think many of them won't vote for that because it will be fundamentally wrong to have poorer families having the biggest debts and the richer families having no debts because the "bank of dad" will step in.

It is worth remembering that just four years ago, tuition fees trebled to the current level of £3,000 a year. But in that time there has been no improvement in student satisfaction, no improvement in graduate prospects, no noticeable improvement in staff/student ratio, and 60 per cent of student fees have been spent on staff salaries.

If universities have been unable to demonstrate how they are improving the quality of what students receive after a trebling of fees in the last few years, I can have no faith that a further increase will have any positive impact for those being asked to pay yet more, landing graduates in yet more debt.

I can have no faith that a further increase will have any positive impact for those being asked to pay yet more. Aaron Porter

So what might this mean when it comes to the crunch? For students from the poorest backgrounds I fear that debts of this level will mean that they are priced out of a university education and for many in the increasingly-squeezed middle students and their parents will now be asked to take on even greater levels of debt.

When Lord Browne, who himself came from a humble background, managed to secure a place at Cambridge University in the 1960s, he didn’t just get it for free he was also given a state grant to study there. His life was transformed by this experience, and he went on to lead BP and become a millionaire with a six-figure pension. It would be a tragedy if a man who himself managed to transform his life by going to university is now suggesting that children currently in schools from similar backgrounds to him would be denied that same life-changing opportunity.

Aaron Porter is President of the National Union of Students. You can contact him on Twitter @AaronPorter

Statement from the Department for Business, Innovation and Skills
"We cannot speculate on the spending review while the process continues. While it is good to have wide public debate about future funding options for higher education it is also important to be clear that the current system is no longer fit for purpose. We need a new funding settlement which promotes world class competitiveness in teaching and research, with better quality for students.

"Lord Browne is currently undertaking a review of university funding and student finance and we will judge its proposals against the need to take into account the impact on student debt, ensure a properly funded university sector, improve the quality of teaching, advance scholarship, increase social mobility and attract a higher proportion of students from disadvantaged backgrounds."