More than half of Britain’s graduates would walk away from a student loan if they had the chance to decide again, according to one of the largest public responses ever received by a parliamentary inquiry, a finding that should rattle ministers, universities and employers in equal measure.
The Treasury select committee, which scrutinises financial policy, launched its probe into student loans earlier this year amid mounting evidence that high interest rates and ballooning balances are weighing heavily on a generation of workers. Its call for evidence drew more than 52,000 responses inside a month, among the biggest hauls the committee has ever logged, and the verdict from the field is uncomfortable reading.
Of the 49,000-plus respondents who hold a loan, 57 per cent said they did not understand the terms and conditions of their repayments at the point of signing, and 51 per cent said they would not take one out again. Yet 91 per cent admitted, with equal candour, that they could not have gone to university without one, a tension that lies at the heart of the policy headache now facing the Treasury.
The milestones being put on hold
For a magazine that speaks to small business owners every day, the most striking finding is not the headline figure but the behavioural fallout. Respondent after respondent told the committee that the monthly drag of repayments was forcing them to defer the very life decisions that drive consumer demand and entrepreneurial risk-taking: buying a first home, starting a family, even accepting a promotion that nudges them into a higher repayment band.
That dovetails with a separate review by Sir Alan Milburn, the government’s jobs tsar, which found that one in ten so-called NEETs, young people not in education, employment or training, now holds a degree. Sir Alan told the Financial Times that “employers are demanding skilled labour, but the education system is not providing it,” a complaint that will resonate with SME owners who have watched the NEET total edge towards one million while vacancies in skilled trades remain stubbornly unfilled.
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