Americana

americana

Average annual cost of study in the US including tuition fees and living expenses: US$36,564 [i]

Just up the road from where I live there’s an Americana festival on this weekend. There’ll be cars, cover bands and – most intriguingly – a live history encampment with shoot-out re-enactments. I may just get to fulfil my childhood dream of being a cowboy.

It seems weird to me to have a festival celebrating all things American when it feels like modern life has been eaten whole by the behemoth that is the US’s cultural output. Our food, language, music, books, films, TV, theatre and art – all invariably altered by Uncle Sam. We are life buoys on the cultural tide of America. It’s also arguable that our economic approach has spent most of the last forty odd years slowly but surely becoming a highly detailed 1:5 scale-model of theirs. We have embraced borrow and spend as our very own.

As such I don’t so much look forward to new budgets as brace myself for impact. This week was no different  – other than the fact that I think George Osborne has a more punchable face than many of his predecessors. Don’t worry, I’m not going to spend the next however many minutes of your live breaking down the budget. I’m not an economist and there are many, many places where you can pour over the intricacies whilst being guided by far more qualified by people than I. Instead, I’m going to focus on one particular aspect that caused me consternation (in fact, consternation is a serious fricking understatement but I’m trying to be family friendly so let’s stick to that).

Coming in at number 21 on the list of key points from the budget: Student Maintenance Grants will be replaced with loans. To quote precisely:

“From the 2016-17 academic year, cash support for new students will increase by £766 to £8,200 a year, the highest level ever for students from low-income households. New maintenance loan support will replace student grants. Loans will be paid back only when graduates earn above £21,000 a year.” [ii]

Okay, so first off – I’m bias. Without going into my personal history, when I went to university I received the full maintenance grant and the maximum entitlement of student loan. I wouldn’t have gone to university under the post 2012 system, let alone this new system. I’m just not the sort of person who would want to saddle themselves with £40,000 of debt whatever the repayment structure.

With that in mind, let’s run through a few figures. Under the current system you are in line to pay up to £9,000 a year in tuition fees. While some universities or individual courses do charge less in 2014 three-quarters asked for the full amount [iii]. On top of this, should you require financial support you can claim student loans up to £5740, if you live outside of London, or £8,009 if you don’t.

At least, for now, you can also get a maintenance grant of up to £3,387 if your household income is below £42,620. Under the new system this will also disappear. So, let’s put this in simple terms. For a typical student coming from a low income household the price of going to university just went up by approximately £10,000. Awesome!

If I were going to university next year – with the same financial circumstance as I had when I originally went – I would be borrowing £51,000 for my higher education. And that’s not even the worst bit. With interest rates set at RPI + up to 3%, I would stand to repay around £134,000 [iv] during my working life or about the same as a three bedroom semi in my local area. Ah, fuck it, I’m not feeling family friendly anymore.  Fuck, fuck, fuck ,fuck, FUCK!

Okay, so on the bright side, I only have thirty years to repay, and with payments at 9% of any income above £21,000, at some point I’d have to get my salary up into the £100,000 bracket in order to repay the whole thing. Which also makes me wonder how this whole thing will work.

Not that this will help when the government are taking £1,000 of your money away every year. Let’s face it: This is basically a tax in everything but name. A tax on learning that disproportionately affects poor people.  After all it’s those who need the grant who will end up paying more for their university education. It is – in modern parlance – regressive rather than progressive. Or shit rather than sensible.

So where does this leave us? Apparently it leaves us frightening young people away from university; shackling them with a lifelong tax without ever calling it that; and praying that the fall in income doesn’t have a negative effect on how people spend their money on, say, consumer goods or housing since those are the two things that our economy seems to pretty much rely on these days.

The big surprise of the budget is how easily something this toxic seems to have escaped greater public anger. The chancellor told this was a budget for working people – though it’s not clear to me who the budget was really for. The one thing we can be sure of is that it wasn’t a budget for young people. Good thing they don’t vote (and especially don’t vote Conservative), eh George:

2015 General Election (Ipsos Mori Estimates)[v]

Age Turnout

Conservative lead over Labour

18 – 24 43%

-16

25 – 34

54%

-3

35 – 44

64%

0

45 – 54

72%

3

55 – 64

77%

6

65+

78%

24

I’ll be talking about music again next week, honest. In the meantime, Skewed Quiff’s latest mix can be found here

[i] http://www.topuniversities.com/student-info/student-finance/how-much-does-it-cost-study-us

[ii] https://www.gov.uk/government/news/summer-budget-2015-key-announcements

[iii] http://www.telegraph.co.uk/education/universityeducation/11051519/More-students-charged-maximum-9000-tuition-fees.html

[iv] http://www.studentloanrepayment.co.uk/scheme/rep/repayment-calculator/sfe/

[v] https://www.ipsos-mori.com/researchpublications/researcharchive/3575/How-Britain-voted-in-2015.aspx?view=wide

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