“The less well-paid you are when you enter the labour market, the more your degree costs, both relatively and absolutely – and not the other way round”, says Ron Johnston (Professor of Geography in the School of Geographical Sciences at the University of Bristol) in a LSE blog post.
“The extent of the debts students graduating from 2015 onwards will be carrying is not only often understated but in addition the repayment system is regressive according to income and not progressive, as frequently claimed”,
Paying off debt for 23 years and 4 months
Johnston does the calculation: “The smaller the amount that you earn, the less you pay in any one year, but as you continue to be charged interest on the outstanding amount (at the rate of inflation if you earn £21,000; at the rate of inflation plus up to 3% depending on your income if you earn £21-41,000; and by the rate of inflation plus 3% if you earn more than £41,000) the size of your debt continues to increase – for nine years if your starting income was £21,000. As a consequence our student whose course fees were £27,000 will take 23 years and 4 months to pay off the loan, at a total cost of £67,743.”
A societal concern
Johnston points the possible effects this regressive loan system has on the market for postgraduate masters’ degrees. He wonders why students would go to great lengths for a post-graduate education if the financial burden of the undergraduate education is that large.
Especially people that want to work in poorly-paid professions – like social work – might reconsider. Ron Johnston: “Society as a whole should share their concern – where are the next generations of entrants to many of our (under-rewarded) professions to come from given this unfair burden?”
Read the complete posting here.