Why we should abolish graduate debt

Three months after New Labour came to power in 1997, Tony Blair announced the abolition of student grants and the introduction of student loans. The days of free higher education were over.

In the context of the dying days of the 20th Century this was all well and good. The Conservative governments of the 80s and 90s created our service based economy, our world-leading financial centre in London, and paved the way for the decadent orgy of prosperity of the late nineties and early noughties. Everyone was better off, everyone was encouraged by the state to go to uni, and everyone had more money to spend. The state couldn’t possibly pay for 50% of the population to attend university, so tuition fees and student loans were the logical way forward. John Major’s government suggested it with the Dearing Report and New Labour introduced it. Both parties were equally guilty.

But this isn’t about party politics. This is about an entire generation – the baby boomers, and children of the 60s – screwing up the system for all of us. Over the last twenty years we’ve seen an explosion of greed in the city, with hedge fund managers making up algorithms that no one understands that deposit billions of pounds in their and their old school chums’ bank accounts each month. We’ve watched the banking system – a giant Ponzi scheme, borrowing money to lend money – grow bloated and collapse under the weight of its architects’ gluttony. We’ve sat by and watched people "get rich" because they bought a house ten years ago, and then sat in it spending money on the internet that they borrowed from Direct Line. This generation that’s currently in charge thought it was OK for every second advert on telly to be for free money. Because they were watching their houses go up in value, and failed spectacularly to realise that their wallets were being puffed up by a new form of inflation; house price inflation. It’s inflation, duh. It’s bad. But no one spotted it.

People with no shoes on bought sofas from DFS for 999 pounds, walking out of the shop with nothing to pay for a year. We all went on holiday. Gordon Brown announced the end of Boom and Bust.

The rich-poor divide grew more and more extreme. Executives were (and still are!) taking home forty or fifty times what their shop-floor workers were earning. But no one in power vomited and tried to stop it. Even a Labour government! A Labour government let this happen.

Elsewhere in the world people starved. But no one thought to take out a low-interest loan to eradicate poverty, or educate every child in the world. People had Thomson holidays to book.

All the while my generation was growing up. We went to school. In 1997 we got told we couldn’t have a grant to go to university and that we’d have to pay tuition fees. We accepted this. This was two successive governments from each end of the political spectrum, and our parents, and our teachers all telling us this was fine; we could pay it back when we graduated and started making lots of money. "Fair enough", we thought,"they obviously know what’s best for us, they’re older and wiser and they make up the rules. Fair enough."

No! Not fair enough! My generation is the victim of the brainless greed and economic incompetence of the generation above. All those talking heads on the news getting stiff over the value of their houses, all those economy wonks who failed to spot the blindingly obvious because it contradicted their bank balance.

The average house price was ten times the average salary! What planet were you living on?

Now, thanks to the legislation and advice that’s been forced onto my generation by our olders and wisers, we’re all lumped with around £14, 000 of debt, and there’s no jobs. So cheers. Nice one. Thanks a lot.

I have no hope of paying that money off. I’ve got two overdrafts; much more pressing than the student loan that’s ticking away out of earshot. And there are thousands like me, who have a rising debt (they charge interest at a rate fixed before interest rates went down – once again, cheers), with no prospect of ever paying it off.

My generation is the future. We’re the ones who are going to lift the world out of this recession that our parents’ generation started. But they’ve shackled us with a paralysing debt.

When Tony Blair introduced those changes in 1997, everyone was rich, a degree got you a job, so tuition fees and student loans were fair enough. But now it’s 2009, everyone’s poor, a degree is worth shit, and tuition fees and student loans are unjustifiable. The state needs to invest in its own future. A student is an investment. The graduate is the return. If the government is genuinely serious about getting us out of this crisis, they need to make sure graduates provide that return, because we’re not at the moment, and we’re not going to at this rate of interest.

And graduates are doubly screwed. The joke’s on us. Not only has the investment failed, but it was our money (our imaginary money from the future) that we’ve lost. The government can fix this gross injustice by cancelling our debt, and showing that they’re serious about solving the financial crisis.

At the moment the Labour Government is employing quantitative easing. It’s a concept that allows you to print money without calling it printing money. How much would it cost to write off all the student loans in the country? 1 billion? 2 billion? 10 billion? 30 billion? I have no idea. However much it is is irrelevant. The government can guarantee it – it would barely dent the national debt, and suddenly a generation of entrepreneurs would emerge, unshackled from debt, able to make money and generate money, and suddenly we’d see that national debt start to dwindle.

You all got a free education. If there’s any hope for my generation (which there doesn’t seem to be at the moment), you need to cancel the debt you gave us.