Having recently attended graduation ceremonies at three universities, IF Co-Founder Angus Hanton has been struck by a streak of very British reserve that ran through all of them and that is the willingness of higher education institutions to take large sums of money from students without a single mention of money, fees, pay or student debt.
On the “take”?
As I watched a group of 250 students, all excitedly waiting to have their names announced and doff their mortar boards, I totted up that their three or four years of study represented almost £8 million of personal investment which most of them will be paying off for the next 30 years, and soon to be increased to 40 years for 2023/24 university starters.
Student debt
Most of these students will never repay their debt. Instead, they will be on a treadmill of interest payments. Meanwhile, nowhere within the speeches to the new graduates, nor in the fancy programmes, was there any reference to the financial burden these graduates have been forced to take on; whilst there was plenty of warm praise for the parents there was also no reference to the financial contributions they too will have made.
No mention of 43% tax rates
Graduation ceremonies are all very English and polite, but below the surface lies an implicit assumption that someone else should be worrying about the mountain of money involved. We know that on average half the students at these graduation ceremonies will go on to undertake non-graduate jobs as their first employment, and even a couple of years out, over 30% of them will still be doing a job for which a degree is not necessary.
Whether or not they actually get a graduate job, as soon as their salary reaches the repayment threshold (soon to be reduced to £25,000 a year) they will be paying 9% of their extra income in student loan payments for the bulk of their working lives. This takes an average young graduate’s tax rate up to 42.25% if you include Income Tax and National Insurance contributions.
VC Pay
Graduation ceremonies are usually officiated by Vice Chancellors (VCs) who are highly paid at universities. Take Sheffield University’s VC, as an example. His pay – at £450,000 a year – is equivalent to all the annual tuition fees of 50 students. One “graduand” waiting for their turn on the stage muttered to me that although the main VC speech was good, all the students had heard it word-for-word at an earlier university event.
They were also acutely aware that Scottish students in Scotland do not pay tuition fees at all and that the older generation of graduates that the VCs represent also did not pay any tuition fees, and indeed these baby-boomers often received grants to go to university to cover their living expenses.
COVID-19
Most of the young graduates at these degree ceremonies had missed more than half their time at university because of COVID-19 measures largely instigated to protect the older generation. Graduates told me that while many of their departments had given lots of online support, some tutors had been virtually absent without leave. It remains the case that whatever level of teaching students received during the pandemic, their university never suggested any refunds on tuition fees or the paid-for accommodation that had to be left empty.
David Willetts endorses extra tax on young people
The man most responsible for high English tuition fees, by tripling them from £3,000 a year to £9,000 a year, David Willetts, is now Chancellor of the University of Leicester. While higher education institutions prospered from the river of cash he let loose, his legacy is a lifetime of financial burden for young graduates.
The irony is that having tripled university tuition fees David Willetts, himself a baby-boomer, made a career out of arguing that young people have suffered intergenerational unfairness at the hands of the baby boomers. The high cost of university education is not a topic that comes up at graduation ceremonies, especially at Leicester University where an unsuccessful petition was signed by thousands of students to try to stop Lord Willetts becoming their Chancellor.
Worries for the future
Several of the parents I spoke to after these degree ceremonies said that they were worried for their children because: they would get worse pensions; they will face higher housing costs; and they will find it harder to work in Europe post-Brexit. Some of them said they expected their children to stay at home with them for quite a few years, unable to afford to start an independent life.
Perhaps the heart of the problem is that these young people are being “dissed” – disrespected – by the establishment. Some of them feel their interests are being sacrificed to those of the older generations and they will surely, at some point, protest that intergenerational fairness is being ignored.
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