Debt May Now Have Made Going To University Pointless

By : Ben Hayward |


student2 Debt May Now Have Made Going To University PointlessWikipedia

Remember when you were told it was definitely worth diving into a stinking cesspool of student debt because you would easily make that money back with your whopping great graduate wages? 

It turns out that’s a load of old bollocks.

A new report from pressure group, the Intergenerational Foundation (IF), has focused on how successive governments have justified tuition fee rises in England – currently capped at £9,000 a year – using the graduate ‘pay premium’.

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This ‘premium’ is the amount of extra money it is estimated a degree can help graduates to earn over the course of a lifetime.

The IF has revealed that, in fact, having to pay back student debts will wipe out any extra earnings for graduates in most professions, reports the BBC.

Although there are huge variations related to your gender, subject and institution, the report argues:


The increasing number of graduates is undermining the value of a degree.

Our research proves that the current £100,000 graduate earnings premium so often touted equates to an ‘annual bonus’ of just £2,222 over 45 years of work and is wiped out once National Insurance and income tax are taken into account.

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What is more, the IF report says the ‘premium’ doesn’t even cover the interest on the average student loan.

A graduate who borrowed the maximum for tuition fees and maintenance could – if bank rates follow predicted patterns – find themselves with an eye-watering £282,420 of debt 30 years down the line.

Also – unlike most loan agreements – the terms and conditions of student loans can be changed ‘at any moment, without debate and without notice’ – a pretty ominous sounding clause…

A government spokesman said:


All of our reports have shown that a degree continues to give graduates a big earnings boost.

That may be true, but the very nature of tuition fees simply serves to widen the earnings gap between rich and poor.

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Students from wealthy families won’t have to take out loans to pay fees and will emerge from university both highly qualified and debt free. Their earnings will be unaffected by student loan repayments.

It’s important to note that there are of course reasons other than financial gain for going to university.

An exposure to academic thinking and cultural diversity are – in my opinion – invaluable assets which stick with you for the rest of your life.

However, the rise in tuition fees remains yet another example of those worse off in society being hindered in their progress.