Time is a great healer; all those injustices you felt in the past fade in importance in your life. But what happens when you see a bigger injustice as time passes? That future generations seem to have it even worse?
Intergenerational unfairness is a hot topic. We discuss and debate regularly the concept regularly in the press and social media. The key question is: are we being fair and treating people from different generations the same? Everyone seems to have an opinion on this topic. Moreover, people tend to share how hard *their* generation had it – highlighting sufferings and sacrifices. But I want to move away from that and look at it more holistically.
Today I’m going to look at education – specifically higher education. Let’s look at how the costs have skyrocketed alongside the increasing demand for a highly educated workforce.
No universities charged UK students tuition fees – higher education was free at the point of delivery. Hence Baby Boomer and Gen X’ers all received free higher education, supported by generous maintenance grants. Higher education was seen as public good paid for by the government.
The government decided to introduce tuition fees for higher education in the UK in 1998. I identify as a Xennial: I started uni in 1998. As my intake was the first impacted – we were angry. In a why us type way, and we developed a healthy distrust of the government. Moreover, the Labour party certainly alienated a lot of students in our year, who should have been key supporters of the party.
£1000 a year tuition fees were born and allowed to increase with inflation. As the generations before had enjoyed free higher education and grants to support themselves, this felt unfair. And I think that is a correct statement – that the Xennial population had it worse than Gen X and Boomers in regards to education costs.
However, as fees were now the norm, increasing them was not a big stretch. And it did not take long for the costs to increase. A mere 8 years later in 2006, fees were increased to £3000. Now during this time inflation was not exactly rampant and the £1000 1998 tuition fees would be equivalent to £1218 in 2006. So in reality, after accounting for inflation the fees more than doubled. So the millennials then got it worse than my Xennial generation.
And that regime lasted a mere 6 years before, you guessed it – they rose again. Tuition fees were raised this time to £9000 (vs the £1491 inflation-adjusted 1998 fees). Which is a six-fold increase above inflation. From what I’ve heard the quality and resources of the universities have not changed at all to justify these increases. Therefore younger millennials and Gen Z’ers have it even worse.
Intergenerational Unfairness seems clear
The tuition fee landscape has been changing dramatically over the last 20 years. Accusations of intergenerational unfairness seem to be substantiated. Baby Boomers and Gen X’ers got a free higher education and generous grants. Xennials had to pay a bit, Millenials even more and as for Gen Z? With the precedent being set, I can see fees continuing to rise above inflation.
For more details and a full history of tuition fees see the Wiki article: Tuition fees in the UK.
Now we have established that fees are increasing exponentially, how do students actually fund university? Enter student loans. These are government backed loans that all UK students are eligible for – no credit check takes place. UK student loans are repaid like a graduate tax, as a percentage of your income over a threshold – currently 9% of your income over £25k. And they are written off 30 years after graduation.
Student loans have obviously been increasing in line with tuition fees – they are designed to cover both the fees and living expenses. I finished uni with around £15k of student loan debt. This felt manageable and as I did not earn much in my twenties, I was well into my thirties before I paid off my student loan. At the time, this felt like the norm – lots of people had student loan debt. Students in the generations after me will have larger balances – with today’s students expecting to hold £50k of student loans upon graduation. However, as the debt is wiped away after 30 years, graduates earning less than £35k are expected to never have to pay it all back.
Again, that is a humungous raise from £15k to £50k in student debt over twenty years – and the intergenerational unfairness radar pops up again. Does the prospect of £50k debt worry you? Would it deter you from going to university? UK Student Loan debt is now over £100bn. Which is a massive number now rivalling US student loan indebtedness.
I do believe student loans are good debt. As they are debt used to increase earning potential. However, we are encouraging future generations to see debt as the norm, which is something I have concerns with. If people have £50k of debt already, what harm can adding a few £ks more do?
If you want more factual details on the latest student loans from MSE here is a great guide: Student Loan Mythbusting.
Impact of Increasing Fees
Unsurprisingly, research has found that students from lower income families are more concerned about taking on this debt burden. They are put off attending university more than better off students, due to the costs. These families typically have not been to university themselves and may not fully understand the benefits. Hence these students grow up with a negative perception of a university education and fixated on the immediate financial cost.
On the other hand, the wealthy are able to easily subsidise their children, give them another leg up and remove any money concerns. The middle class can perhaps help out a bit financially. But more importantly, they can articulate the benefit of attending university and set that as a key aspiration for their children. And then help them understand the often complex student loans process.
Ever increasing tuition fees are thus causing those from disadvantaged backgrounds to avoid university. Those who don’t have the aspirations to attend and don’t have parents able to coach and guide them through the process are at risk of missing out. I am the first person from my Dad’s side of the family to go to uni. And I saw first hand how alien they thought the process was, alongside comments on getting above one’s station.
But I was lucky – my Mum has been the first in her family to go, making me the second on that side. And the difference was stark. For kids that only get the no uni perspective, I can easily see how they chose to not attend. It’s easy to get pressured into starting work and making an immediate financial contribution vs accumulating debt. The full long-term benefits can be hard to comprehend when you have not seen them in action.
Increasing Student Numbers
You may have heard someone joke that all office jobs need a degree nowadays. And it’s not far off the truth – lots of non-traditional graduate jobs today require a degree. You routinely see roles in the admin field such as receptionist advertised as needing a degree. These roles have existed for years and been expertly filled by people with the ideal training and skillset and no degree. So why do you suddenly need a higher education to do these jobs?
It’s simple supply and demand economics. We produce more graduates than there are traditional graduate occupations. Hence we have an abundance of graduates. Once employers realise there are more graduates around they are free to raise the bar for roles. So some non-traditional graduate jobs now need a degree. In my parents’ generations degrees were for the educational elite, less than 10% of the population. Now we are approaching 50%.
Is a Masters the new norm?
Which leads to how do the academical elite differentiation themselves today? A trend that’s been increasing over the last few decades is for a master’s degree, once seen as an academic badge of honour, to become essential criteria for traditional graduate jobs. Which then involves more tuition fees and student loans, increasing students debt burden.
And yes – this is a very middle-class perspective and first world problems. But they are important problems as they impact social mobility and deny people equal opportunities. Our education system used to be one of the great equalisers – allowing everyone equal opportunity of access based on personal academic ability rather than family wealth. Now that is under threat and we are in danger of not getting the most out of children who were born into disadvantaged families.
What is the way forward?
Hopefully, we can all agree that an educated population is a good thing. And raising the bar all round will benefit society as a whole. But do we want to explore different learning models? Is a traditional degree, with the high and increasing costs, in itself really necessary?
Personally, I am a fan of MOOC’s and using new technology to educate. I feel EdTech has the potential to bring new flexible and lower cost solutions. And this is one area where I feel the intergenerational unfairness is in favour of Gen Z and millennials. In the history of the world, there has never been so much material readily available as there is today on the internet.
Over to you
- What are your thoughts?
- Do you think we have issues with intergenerational unfairness?
- How do your tuition fees/student loans compare with other generations?