4. Loans: long-term costs
The outstanding balance of loans owed to the UK government by graduates currently totals £35 billion. But with tuition fees rising to £9,000 a year in many cases, that figure is going to rise in the coming decades. By 2046, the government estimates it will peak at £191bn in today’s prices. This perhaps optimistically low estimate, based on fees averaging £7,500 a year, is nonetheless a truly enormous sum—equal to a fifth of today’s bloated, national debt.
For the next generation of students, this huge number just reflects what they already know—that they will end up owing far more than their parents’ generation ever did. But for the government, the picture is reversed. The student loan book is set to become one of the UK state’s biggest assets.