Student Loans Agreement

Ruth Cadbury Excerpts

Monday 18th July 2016 Westminster Hall

[Helen Jones]

My hon. Friend is right. This system is flawed all the way through. Trying to fix it by making it more flawed is not going to work. Today’s students do not have the assurance, which we had in the past, that they will get a decent job. Many graduates are doing low-paid, low-skilled jobs that are perfectly useful but not commensurate with their qualifications. They often move from job to job, with nothing that could be described as a career. The doors of their chosen professions are frequently closed to them because they cannot afford to do the unpaid internships that are currently the way into many jobs.

[Ruth Cadbury (Brentford and Isleworth) (Lab)]

I congratulate my hon. Friend on introducing this debate. I declare an interest: I have two sons, both of whom will have to pay loans back at the higher rate, and both of them have paid fees of more than £9,000 a year. My hon. Friend might also have mentioned graduates like my elder son. He has chosen to work abroad for two years, on a low wage, to get an interesting experience of the world. He is not fully aware of the implications for what he is going to have to pay or how the repayment rates are rolling up year after year.

[Helen Jones]

I am grateful for that intervention. My hon. Friend is right. When students took out loans at the start of university—this was as true under the old system as it is under the new one—many were not really aware of the full implications: when they would have to start to pay them back, how interest accumulates and so on. We would be foolish to expect many of them to be aware of those things at the age of 18. I do not think I or many other Members would have been.

The problems faced by many young graduates are simple. They have little hope of getting into decent jobs and no hope of getting on the housing ladder. Many of them are stuck in rented accommodation, with rents rising every year, meaning that they cannot save for a deposit on a house. Recently released statistics show that this will be the first generation to earn less than the one before. The assumption we always made, certainly when I was growing up, was that each generation would do better than the one before, but that no longer holds good. That is a real betrayal of our young people. What the Government have done with student loans adds to that betrayal. They have failed to understand the implications for young people and to get a grip on the system.

As in so many other matters these days, the Government are making young people pay the price for their failure. The Minister should really think again. With a new Chancellor in place, there is a chance to revisit this matter and get the student loans system on a sensible and sustainable footing. I urge the Minister to take this chance, because what is happening at the moment is totally wrong.