Saturday, 11 October 2008

Education, education, stagflation

Tony Blair in his 1996 conference speech to the party faithful, declared:

"Ask me my three main priorities for government, and I tell you: education, education, education."

Twelve years on and we're staring a scary and potentially prolonged spell of stagflation in the face.

"Credit crunch" is the cosy term for it.

I'm not an economist, but in layman's terms even I can understand the basic arithmatic of an extended period of easy credit + rising prices of global commodities = stagflation.

Pushing 50 per cent of youngsters into university is partly to blame for my generation's credit habit.

Without planning or budgeting for it families and 18-year-olds found themselves being thrust into higher education.

Which wouldn't be a national disaster, except that these days an undergraduate degree from a decent university will set you back anywhere in the region of £8,000 to £20,000.

For many people of my generation, adulthood was marked by the taking on of debt, so it's small wonder we're a credit card comfortable lot - personal debt is all we've ever know.

We learnt to borrow before we learnt to earn.

But it wasn't always like that, within recent memory the grant system still operated.

My friend Sarah and her brother James perfectly illustrate how quickly things changed, and how mums and dads had no time to plan, budget, or save for their kids' future.

Sarah is 24, her brother James is 30: He was given a grant and so was effectively paid to go to university, as a result he now owns a flat in London.

On the other hand Sarah was hit for tuition fees, then top up fees and without a grant she had to take out a student loan. Having graduated two years ago she is still paying her debts off and has no hope of owning property in the foreseeable future.

With the benefit of hindsight it is obvious that this change happened too quickly.

We are now approaching a higher education system similar to that of America, which is not inherently a bad thing, unless you introduced it overnight and did nothing to counter the culture of easy lending it created.

What difference does a bit more debt make if you already owe the bank £15k? When you don't earn it and money comes for free and you're 18 it's all fine - right?

Who was regulating the massively lucrative student banking sector?

With education offered up as an answer to all society's ills, not enough of us questioned the validity of our higher education choices.

Which must be painfully obvious now to those who took puppetry, complimentary medicine and media studies degrees and are labouring away in unrelated careers to shift those debts.

Expensive, inapropriate higher education didn't open doors, it shut them.

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