The Business, Innovation and Skills Select Committee warned today that the student loan system is at tipping point. The amount that the government will not get back is apparently likely to rise - at the moment it is forecast that 45p out of every pound will not come back as opposed to an initial estimate of 28p. The Committee also questioned the efficiency of the Student Loan Company's collection process, but that is a minor issue compared to the prospect of many student loans never being paid back.
Perhaps I'm being simplistic, but it seems to me to be quite logical that the amount of unreturned loan will rise. The right wing half of this government has a vision of the economy which is at odds with the (still) stated purpose of higher education policy. Their policies over the last four years have been moving us very effectively towards a low wage, low security economy, with a relatively small managerial and technical sector (for which university level education is necessary). While we apparently have more people than ever before in full time work, it is also the case that a very large proportion of them are in low paid work. (Hence also the benefit bill is not coming down as much as the poisonous IDS wants, because hefty amounts of tax credits and housing benefit are still being paid to people in full time work whose employers ought to be paying them a decent wage.) We are producing more graduates than this type of economy needs, so many of the graduates we produce may never earn more than the threshold for repayment.
In my view it is very short sighted to aim for this kind of economy, but that is what it seems we are being stuck with, so it will be very interesting to see how far the student loan policy unravels before politicians start rethinking it. Either that, or we need a change of economic tack which neither Conservatives nor Labour seem likely to provide.
Perhaps I'm being simplistic, but it seems to me to be quite logical that the amount of unreturned loan will rise. The right wing half of this government has a vision of the economy which is at odds with the (still) stated purpose of higher education policy. Their policies over the last four years have been moving us very effectively towards a low wage, low security economy, with a relatively small managerial and technical sector (for which university level education is necessary). While we apparently have more people than ever before in full time work, it is also the case that a very large proportion of them are in low paid work. (Hence also the benefit bill is not coming down as much as the poisonous IDS wants, because hefty amounts of tax credits and housing benefit are still being paid to people in full time work whose employers ought to be paying them a decent wage.) We are producing more graduates than this type of economy needs, so many of the graduates we produce may never earn more than the threshold for repayment.
In my view it is very short sighted to aim for this kind of economy, but that is what it seems we are being stuck with, so it will be very interesting to see how far the student loan policy unravels before politicians start rethinking it. Either that, or we need a change of economic tack which neither Conservatives nor Labour seem likely to provide.
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