Join the Socialist Party Join us today!

Printable version Printable version

Facebook   Twitter

Link to this page: https://secure.socialistparty.org.uk/issue/804/18369

From The Socialist newspaper, 26 March 2014

Defaults reveal student debt madness

Students on the last NUS national demonstration on 12 November 2012 against the government attacks on university education, photo Paul Mattsson

Students on the last NUS national demonstration on 12 November 2012 against the government attacks on university education, photo Paul Mattsson   (Click to enlarge)

Dan Celardi, Sheffield Socialist Students

Universities minister David Willetts has been forced to admit that student debt defaults are currently at about 45%.

He also estimates that once the figure reaches about 48.6%, then the money saved from the fee rises in 2010 is counterbalanced by unpaid loans.

This clearly exposes the myth that fee rises were about economic efficiency in austerity Britain. It shows the fundamental motive was a further marketisation of higher education.

It demonstrates that it was about trying to scrap any notion of education as a public good.

When the Con-Dems forced through the tripling of tuition fees to a maximum 9,000 a year, they were faced with demonstrations and occupations involving hundreds of thousands of students.

Supposedly the system was unaffordable and students were going to have to cough up more towards the cost of university.

Earnings threshold

But the vast majority of students still financed fees through student loans - which have always been paid back only when earning over a certain amount.

While the amount of debt went up, the amount of money coming in actually went down because this threshold was increased from 15,000 to 21,000 (undoubtedly a concession to the pressure of the movement against the fee rise).

No surprise

After 30 years any remaining debt is written off - in fact the government always accounted for 30% of the loans never being repaid.

It is no surprise that estimates suggest today's students are likely to default on their debts. Coming out of university, students are faced with the grim reality of unemployment, zero-hour contracts and low pay.

Capitalism offers no hope for graduates and little chance of being able to pay their loans back. As all three main parties are committed to cuts and privatisations, this figure will no doubt keep on rising.

It is unlikely that this startling revelation will change the minds of the Coalition on the issue of fees however.

Universities can expect to have further cuts to their already dwindling budgets from central government.

There is a widening layer of university management that seems to think that un-capped fees are the solution.

There are those who think that lowering the level at which graduates begin to pay their loan back is the answer.

The crisis in higher education funding proves fees and loans are simply not working and need to be scrapped with the introduction of free education and living grants.


The potential sell-off of the Student Loan Book (SLB) is a further sign of what the government's motivation for all these changes is.

The sell-off will allow private debt firms to make a profit on student loans. The sale of the mortgage-style loans at the end of last year shows the trajectory the SLB is heading in. These loans, dating from 1990 to 1998 have very low repayment rates, of around 14%.

Although that loan book was worth nearly 900 million, it was sold off for a meagre 160 million. The debt firm will be looking to make a mark-up on this and the government is clearly using private enterprise to re-structure loan repayments while turning the blame away from themselves.

Donate to the Socialist Party

Coronavirus crisis - Finance appeal

The coronavirus crisis has laid bare the class character of society in numerous ways. It is making clear to many that it is the working class that keeps society running, not the CEOs of major corporations.

The results of austerity have been graphically demonstrated as public services strain to cope with the crisis.

The government has now ripped up its 'austerity' mantra and turned to policies that not long ago were denounced as socialist. But after the corona crisis, it will try to make the working class pay for it, by trying to claw back what has been given.

  • The Socialist Party's material is more vital than ever, so we can continue to report from workers who are fighting for better health and safety measures, against layoffs, for adequate staffing levels, etc.
  • Our 'fighting coronavirus workers' charter', outlines a programme to combat the virus and protect workers' living conditions.
  • When the health crisis subsides, we must be ready for the stormy events ahead and the need to arm workers' movements with a socialist programme - one which puts the health and needs of humanity before the profits of a few.
Inevitably, during the crisis we have not been able to sell the Socialist and raise funds in the ways we normally would.
We therefore urgently appeal to all our viewers to donate to our special coronavirus appeal.

Please donate here.

All payments are made through a secure server.

My donation

 

Your message: 

 


In The Socialist 26 March 2014:


Socialist Party news and analysis

No to junk jobs

Fight for a 10 an hour minimum wage

2014 Budget: More misery for the majority

Killed asylum seeker - victim of racism and privatisation

Pensions: Osborne's 'counter-revolution'

Them & Us


International socialist news and analysis

Turkey: new wave of protests


Socialist Party youth and students

Defaults reveal student debt madness

Jobmatch: yet another fiasco of privatisation

Leeds protest: stop the student loan sell-off

Young people: alienated, not apathetic


Socialist Party workplace news

Probation workers' action can defeat privatisation

Teachers must fight on to stop Gove

Doncaster care workers determined to win

Workplace news in brief


Readers' comments

The great miners' strike 1984-85

Adventures in bedroom tax land


Socialist Party reports and campaigns

A socialist alternative to the austerity parties

Bristol council: Voting for cuts, voting for careers

It's the system that's ill

'Optimistic' Bluebirds protest

Marching against racism

May Day greetings with the Socialist


 

Home   |   The Socialist 26 March 2014   |   Join the Socialist Party

Subscribe   |   Donate   |   PDF  |   ebook






Related links:

Higher Education:

triangleReject the university employers' offer on pay, workload and casualisation

trianglePay full fees for virtual courses? - No way!

triangleStudents and workers out together on Budget Day, 11 March

triangleRoyal Mail workers in the Communication Workers' Union (CWU) supporting a 'yes' vote in a reballot for strike action, Leicester Meridian, 25.2.20, photo by Steve Score

triangle14 more days of university strikes over pensions, pay and conditions

Student:

triangle"As a working-class student, I already faced struggles"

triangleStudent protests force government retreat

triangleStudents 2 : 0 Tories - Protests work!

triangleSouthampton: University workers win full pay for casual staff

Debt:

triangleAct now to cancel Covid crisis rents and debt

triangleLebanon - mass protests cut across sectarian division

triangleNHS debt so high it can't be repaid - so don't pay it!

Students:

triangleSocialist Students & Young Socialists national zoom rally

Fees:

triangleNorth London Socialist Party: How can Corbyn's policies be implemented?

University:

triangleAfter Scottish government U-turn, Young Socialists fight for a future on A-Level results day

Universities:

triangleWhat would socialist universities look like?

Reports and campaigns

Reports and campaigns

16/9/20

The Socialist

Selling the Socialist

16/9/20

Socialist Party

Why I joined the Socialist Party: Tories and Blairites only care about corporate greed

16/9/20

Young people

Covid generation says 'fund our future'

16/9/20

Coventry

Coventry: scrap 'profit before people' hospital parking charges

16/9/20

NHS

Angry health workers demand 15% now!

16/9/20

Usdaw

Reinstate Richie Venton

16/9/20

Hull

Reinstate Tony Smith

16/9/20

Strike

Tate workers on indefinite strike hold march and rally

16/9/20

London

London bus drivers begin strike ballot over remote sign-on dispute

16/9/20

Ireland

Ireland: Debenham's occupier speaks out

16/9/20

PCS

PCS members in DWP reject unsafe extension of hours

16/9/20

National Shop Stewards Network

National Shop Stewards Network lobbying for a lead from the TUC

16/9/20

Socialist Party

Two weeks to donate: we need your help

9/9/20

Black Lives Matter

BLM: Socialist alternative to racist capitalism

9/9/20

Amazon

Fight Amazon's anti-union spies

triangleMore Reports and campaigns articles...


Join the Socialist Party
Subscribe to Socialist Party publications
Donate to the Socialist Party
Socialist Party Facebook page
Socialist Party on Twitter
Visit us on Youtube

LATEST POSTS

CONTACT US

Phone our national office on 020 8988 8777

Email: info@socialistparty.org.uk

Locate your nearest Socialist Party branch Text your name and postcode to 07761 818 206

Regional Socialist Party organisers:

Eastern: 079 8202 1969

East Mids: 077 3797 8057

London: 075 4018 9052

North East: 078 4114 4890

North West 079 5437 6096

South West: 077 5979 6478

Southern: 078 3368 1910

Wales: 079 3539 1947

West Mids: 024 7655 5620

Yorkshire: 077 0671 0041

ABOUT US

ARCHIVE

Alphabetical listing


September 2020

August 2020

July 2020

June 2020

May 2020

April 2020

March 2020

February 2020

January 2020

2019

2018

2017

2016

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999