You will most likely be aware of the problems in the mortgage market as of late. With the credit crunch making it harder for everybody to manage anyway, those trying to get onto the property ladder have to get at the back of a very long queue to start climbing.
As the majority of the public struggle within this industry, it is even harder for the students. While racking up huge debts to enable them to study to achieve that dream job, with wages which they intend to one day pay for that dream house, they can’t even leave their bedroom in mum and dads house because they have no money.
Last year 40% of women, and 60% of men, ages between 20 and 24 were still living with their parents while they wanted to get their own place. They have been dubbed “Kippers” “kids in parents’ pockets eroding retirement savings”.
While many young people wish to leave their parents abode, they simply can’t afford to. The average graduate debt after leaving university last year was in excess of £13,000. This is set to get even worse due to the controversial decision by the Labour party to introduce tuition fees (which rack up to £3,000 a year!). With these added up for three years, and including the current charges, it comes to a whopping £22,000 of debt before they have even begun working.
Things are set to get worse before they will even begin to get better, however. The UK is rapidly heading towards a US university model which will mean future graduates may have to pay £7, 000 or more a year in fees. The average debt for a three year course may be £21, 000 for fees alone. Coupled with student loans, a student may leave university owing upwards of £35,000.
It is true that most student loan companies to not demand a penny back until the ex-student begins to earn a decent amount, but it is not that easy. Years ago, it was virtually unheard of that somebody would start their adult life in serious debt. Now it seems to be the norm. The sad thing is, these youngsters are only in debt because they wish to better themselves and get a decent job.
Solutions
So what can be done to resolve the crisis? Resolving the crisis in the short term may be a difficult thing to do because of the impact of the turmoil created by the credit crunch. Whilst the government may able to provide assistance to those wishing to get on the property ladder, this will not be enough. It will take several years before house prices reach a realistic (and affordable) level. Carrying tens of thousands of pounds’ worth of debt will not help matters and the government may need to rethink its strategy of burdening students with debt. We may need to return to the days of free university education in order to move forward in the long tem. Either that or watch our children move out in the fifties, something none of us would like to endure.
