University of Oxford Professor Danny Dorling has argued that high tuition fees and resulting student debts profit the super-rich.
Dorling argued in The Guardian that those students can, unlike their less advantaged fellow students, start their professional lives without the burden of student loan debts.
In 2016, the first graduates that paid £9,000 for their studies after the new cap of tuition fees in 2012 per year will start paying back their debts.
They will start their professional lives with an average of £40,000 in debts and most of them will continue paying them back until their fifties, a study of The University of Warwick and The Institute of Fiscal Studies has found.
“Inequality will be increased as a result of the student loan system. Very affluent students will simply pay the £27,000 three-year tuition cost upfront and accrue no interest,” Dorling said.
Dorling also criticised the privatisation of student debts. This summer, the UK Government sold student loans worth £12 billion to private investors.
Dorling said: “The hopes and fears and aspirations of the young are an opportunity to make yet more money.
“Student loans are bought and sold in the US on an open market. If we continue to become more unequal it is only a matter of time before that begins here too.”
A spokesman for the National Union of Students (NUS) told The Student: “The decision to sell off the loan book at a discount to secure a cash lump sum now makes no economic sense and, in effect, will mean that the public will be subsidising a private company to profit from government debt.”
The NUS argues that “forcing debt onto students as a way of funding universities is an experiment that has failed students and our country”.
Claire Crawford of the University of Warwick, thought differently, stating: “The effects of the changes will be quite different for different people and at different parts of their lives.
“Graduates who do less well in the labour market will actually end up paying back less than before, while middle and high earners will pay back much more.
“In that sense, the system is more progressive and looks in many ways rather like a graduate tax.”
A study conducted by the Independent Commission of Fees (ICoF) found that despite the tripling of tuition fees in 2012, applications to English universities have increased and the gap in university application rates between advantaged and disadvantaged students has narrowed.
In the academic year 2012/2013, more school-leavers from disadvantaged backgrounds than ever have entered universities.
Responding to the ICoF study, a spokesperson for the NUS said: “This increase is hardly surprising given the lack of quality information, advice and guidance given to school and college leavers.”
“With almost a million young people unemployed, it’s no wonder that they are choosing to continue in education that face a life of uncertainty.”