Friday, 22 February 2013

Government loan sharks target the over-60s


Headline on front page of The Telegraph, 20 February 2013: Over-60s are told: go back to university and retrain.  

This latest government off-the-wall idea comes from just-returned-from-India David Willetts, Minister of State for Universities and Science and has its roots in the lifting of the age limit on student loans. He claims this makes a degree course “great value” for older people. But who would actually benefit from such a plan? The Over-60s? Employers? Universities? The Treasury?

Mr Willetts says: Higher education has an economic benefit in that if you stay up to date with knowledge and skills you are more employable. But in reality, he is saying: 'take a substantial loan and pay it back to us with lots of lovely interest just when you are about to stop earning and retire and on a pension'. Brilliant advice to increase personal debt in your 60s with no guarantee that a degree would improve your employment chances in any way.

there is high and growing youth unemployment among graduates, why would acquiring a university degree be any more advantageous to those over 60 already in a job or who need to be out there finding a job?

Perhaps Willetts missed The Telegraph article in January when they reported: "
One in five are in the red on the day they retire, with debts averaging £31,000. Many still owe hundreds of thousands of pounds on interest-only mortgages, caught between endowments that failed to deliver and lenders demanding repayment."

Then the government is also suggesting that the over-60s take three years out of the workplace when they have only a few more years left to work.  "Older workers who take courses to keep their skills up to date will be more likely to keep their jobs", claims Willetts. That rule surely applies to workers of all ages, especially keeping pace with technological developments, and this does not call for a university degree. 

And is the government anticipating that an employer will happily hold a job open for three years for an employee to return with a degree but three years behind in the relevant developments that have occurred within the job?

The Treasury and universities would be the greatest beneficiaries. By extending student loans to the over-60s, the government is increasing the number of potential contributors to make up the fees shortfall caused  by a drop in applications from UK students since fees have risen.  This is another case of rises pricing themselves out of the market rather than increasing revenue. The Treasury and universities need the money. A recent Evening Standard headline was misleading: "Applications by English students to UK universities have risen slightly this year, official figures show." (21 Oct 2011).  The rise for this year is up on the very big drop last year, but remains below the pre-fee rise numbers.

The government is not offering grants to older people, working or retired, to go to university to study what they missed out on in their younger days. That would be good but unlikely. But as a former university teacher myself who is still a member of my Oxford college, I shouldn't have to tell the University Minister of State that universities are not there to "retrain" people for jobs.  They are academic institutions intended for post-school development of learning and reasoning. They offer three-year degree courses that are not usually directly linked to any specific job.

Access to university study is attained with high grades at A level. Other criteria can be applied to mature students who are streaks ahead on life and work experience, but may often be required to take some kind of access course to bring certain relevant skills up to scratch.  So exams have to be taken before the three-year course begins. But then, how many over-60s want to immerse themselves in academic study? And everyone has their own strengths and abilities. Not everyone is suitable for academic study and why should they be?

David Willetts is going to be 57 on 9 March, so he is approaching his proposed retraining age. I don't expect he feels he needs it. He has a 1st class honours degree in PPE from Oxford.  Apart from his government duties, he is currently a visiting professor at the Cass Business School, a board member of the Institute for Fiscal Studies and a visiting fellow at Nuffield College, Oxford. At any rate, he won't need a student loan because though he is MP for Havant, he Has personal wealth valued by both the Tory and Labour press at £1.9 million. So he is arrogantly assuming that others will not be as qualified as himself, or not up to coping with the work they may have been doing for decades, updating as they go. Those who work the longest are there either because they love their jobs, don't need "retraining" and don't want to stop working, or there those who can't afford to stop working. Willetts' comments may go down well at a dinner party of people with like minds, but it seems to be yet another case of the government having a complete lack of understanding of the real world.

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