Government in terrible debt? Let’s pass it on to the students.

There’s something bitterly ironic about the tripling of tuition fees that will mean that most students will start their adult life with a £30,000 debt hanging round their neck.  The coalition government has criticised Labour for its easy-spending, saying the UK has been ‘living beyond its means’. We all know that the economic crisis was caused primarily by bad loans, and spiralling personal debt.  So, how is forcing our next generations to head straight into serious debt before they even have their first job a good idea?

It also directly contradicts last month’s announcement that the government will be officially measuring well-being as of 2011, and Cameron’s pledge that sometimes decisions will be made that aim to improve well-being even if that comes at the cost of economic growth.

One of the key findings of well-being research has been that debt is heavily detrimental to mental health and, by implication, to well-being. Indeed, Professor Rachel Jenkins, at the Institute of Psychiatry, has found that the correlation between mental health problems and low income is almost entirely due to debt – in other words it is people on low incomes who have debts who are more likely to have mental health problems.  Those on low incomes who don’t have debts are not particularly at risk.  This finding shouldn’t be new to the government, and particularly not BIS – there was a whole section on debt and mental health in the Foresight Review on Mental Capital and Well-Being conducted by BIS (then BERR) only two years ago.

In other words, even if the job market picks up, we can soon look forward to brigades of depressed graduates.

But the low well-being will probably even start before that. Psychologist Tim Kasser has carried out much work highlighting the importance motivations have on people’s well-being.  Why you do what you do makes a difference to how you feel as a result.  In particular, having intrinsic motivations (i.e. doing something because you enjoy it in and of itself, or because you want to improve your abilities), leads to better outcomes than extrinsic motivations (i.e. doing something to look cool or to make money).  There is a huge risk that the commodification of education, the implication that its only purpose is to secure a higher-paid job, and the huge cost associated with it, will destroy any intrinsic motivations left in university.  No potential student (except those with very rich parents, of course), will be able to start studying without having thought: “is this worth it financially?” or “how can I make sure I can pay this back?”  Is it possible that this decision will lead to a more a materialistic generation of students – who pursue their education only to get high–paid jobs in banks and law-firms and shirk away from anything that doesn’t pay quite as high (for example, working in the public sector or the third sector)?

I have heard it said that the only reason that this will affect poorer families more than wealthier ones is that the poor are ‘debt-averse’ and that, if only they could understand that the new student loans are actually more like a tax, then they would be fine.  Well, to be honest, I think it’s great that someone is still debt averse in this society. Whoever pays for degrees under the new system, either the student or the government when the debts are written off in 30 years, the basic premise is that we pay later. We carry on consuming as much as possible now, and pay later – but this is exactly the problem we’ve already run up against. If we want to pay for education, and I believe we do, then we should make sure we have the money to do so up-front as much as possible. Why is it that a country like Poland, much ‘poorer’ than the UK, is able to provide free education when we can’t?  Of course, as a nation, we have the money. It’s just a question of priorities.  And it doesn’t seem that well-being is up on the list of priorities yet, as much as Cameron says it is.

According to nef’s National Accounts of Well-Being, young people in the UK have the third lowest levels of well-being in Europe, behind poorer countries such as Estonia and Bulgaria.  According to Unicef, children in the UK have the lowest well-being of all OECD countries. With the new tuition fees, I can’t help thinking that maybe our government has got it in for those younger than them.

(picture published with permission from photographer, Marios Hadjianastasis)