If universities buy the debt of their graduates, would this change the university experience?

Ex Universities Minister David Willetts has recent called for universities to buy the debt of their graduates? Would such a radical change in the university system alter the whole university experience such as university course selected, student accommodation and graduate employment levels?
This is an interesting proposal which comes after recent revelations that forty five pence in every pound loaned is not paid back which resulted in MPs calling for an immediate review of the graduate loan system.

The rationale behind suggestion is quite simple if the university has a financial interest it will incentivise them to provide good quality courses and that these universities will be motivated “ in ensuring their graduates secure well-paid jobs that enable them to pay back more of their debt sooner.”

One concern is that the wealthier universities who would have the ability and confidence to take up such a scheme would focus their student recruitment on high achieving students, from wealthy backgrounds on the theory that they may on to be the highest earners and therefore be more likely to and quicker in repaying the loan.

It is interesting therefore to look at graduate tables for employment that show the percentage of students that are working to studying further 6 months after graduation. The ranking in these tables can be surprising with Oxford and Cambridge not achieving the top three spots in the 2013 Guardian report. Will these universities that core highly become more popular with graduates keen to gain employment but also keen to pay off their student debt something which may be more evident when student numbers are uncapped

There a number of tables produced each that cover subjects, student satisfaction etc. and these tables may be of use to those considering buying a student property as an investment. The university’s current rankings are just one factor that should be considered it may be that the university has just received a new research grant added to its facilities or the courses it offers which indicate that the ranking may change. Looking at student satisfaction, a point to consider is whether the quality of accommodation that the students stay in during their time at university would affect their thoughts of the satisfaction regarding the university experience

Investment Property Consults has expertise in this area of UK property investment and is happy to provide guidance to those looking at buying a student property

Categories: Students

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