Recent debates over the current 45% deficit in student loan repayments – said to be rapidly increasing to 48.6% where it will leave the government worse off than if it had kept fees at £3,000 – pave over the real problem facing graduates.
They can’t find graduate level jobs that pay at least the required annual salary of £21,000 to start repaying their loans. We now know that 33% of graduates are not finding, and are never going to find, a grad level job.
Acquiring a long term debt of £60,000 at age 21 or 22 and never being able to pay it off because you never earn enough money is terrible. Experts estimate that by 2042, £90bn of the total £200bn issued in student loans will remain unpaid. The student debt problem is going to eventually explode because we also have a real graduate jobs crisis that everyone is ignoring.
In fact shadow business secretary Chuka Umunna told the BBC that this is a ‘time bomb’ that has already exploded under the government.
The Guardian described the university education system as a ‘money pit’ that has descended into chaos and is now ‘haemorrhaging cash’.
National Union of Students higher education vice-president Rachel Wenstone said it was a failed experiment.
Dead-end jobs for graduates
But meanwhile, as government ministers and financial analysts play word games over the best way to disguise the problem, the Guardian hit the nail on the head when it identified the problem as being an oversupply of graduates and too many in dead end jobs earning low pay. How can graduates ever begin to repay their loans if they cannot find good jobs?
When the government tripled university fees to £9,000 it effectively dug a pit and fell into it, dragging thousands of graduates along with it too. Graduates are still being encouraged to go to university, by taking out huge loans that will start them on their working lives in debt, meanwhile very little has been put in place to ensure that they emerge at the other end equipped to deal with that debt.
Today’s graduate faces a graduate recruitment market where competition for the relatively few graduate level jobs available is tough.
It is a very different graduate system to the one in place when their parents and grandparents went to university. They were almost guaranteed a job on graduation.
Avoid the student debt pit by finding a graduate level job
Graduates who want to avoid falling into the pit the government has dug cannot depend on their degree alone.
You must do all you can before and during your time at university to build solid experience and awareness of the work environment or you will struggle to compete.
You must seek out opportunities to build a portfolio of skills, aptitudes and experiences that will set you apart from your peers, especially those who are on the same degree path as yourself.
You must be able to walk into an interview, look the interviewer in the eye and offer a firm handshake.
You must know how to sell your skills by clearly showing what you have to offer, what you have achieved and how you can deliver the same value and outcome to a potential employer.
Then, and only then, will you be able to avoid the pit where our coalition government and, sadly, thousands of ill-prepared graduates, are destined to languish until someone has the bottle to do something about the current state of graduate recruitment.