One of my children had a problem with a student loans company. So I said to him well child where’s your loan document. I’ll have a look at it. Absolutely no loan document whatsoever because there aren’t any loan agreements. This piqued my interest so and as a former lawyer. Obviously, you’re not going to have 30000 pounds or 60000 pounds worth of debt without a document telling you what you’re take on and the terms that you’re taking it on. But students have to. They just get some sort of vague terms and conditions which doesn’t explain things. They’re not told how the costs are racking up, they’re enormous amounts of money and there should be tables and there should be explanations.
Do you think I’m being too cynical when I say that there are financial interests out there who know about the allure of university, the group think that goes on and the excitement that goes on amongst friends because people are going, it’s the first time away from home that actually it’s quite an easy sell. You could say it’s an easy mis-sell, couldn’t you? They’re being sold the idea that they’re not ever going to have to pay back their debt, that it’s not really a loan. The reality is that it is a loan and it is something that matters in your life It counts against you when you’re trying to get a mortgage but also you don’t make payments for your student loan while you’re at university so you don’t feel the pain you don’t feel the extraction from your income.
But then after university when you’re earning you do start making payments and the more you earn the more payments you make and graduates who are earning decent money are suffering deductions from their earnings and that is impacting them. But there’s also this human element to it as well and the human element is the concept of how it impacts people’s mental health. It affects how you can obtain a mortgage or if you can obtain a mortgage or the amount of money that you can borrow. Are you sure about that? Yes. You’re assessed on the basis of your affordability. If you can afford to make large payments then you’ll get a bigger mortgage. But if you’re paying a lot of money to the student’s loan company because you’re repaying your student loan then you can afford less. So that means that the amount of mortgage that you get the size of capital the size is less. Your argument there is that impacts in physical terms in real terms of someone’s living standards.
Let’s say you’ve got two graduates. They’re living together, they’re maybe married maybe not but they’re together. They’re both suffering deductions to their income because they’re both repaying their loans the property that they can live in is that much smaller and they’ve also at that time got a lot of responsibilities, they might have children or they might have wider family members that they’re providing for and just at that point in time when they really need money. You’ve got these deductions coming out of their earnings. That’s an additional stress and I think that one of the reasons that the present system has been allowed to continue for as long as it has continued is because we haven’t yet had a cohort of graduates that have reached that point but they’re beginning to.