By Robyn Banks
CW: mentions suicide.
Sometimes targeted adverts reveal to you more than you wanted to know. I’ve recently been experiencing facebook ads for Future Finance, a company that offers loans of up to £40,000 to students, with an interest rate of 17.45% APR for all the time that you’re studying. To put that in perspective, if you borrowed £7000 over 5 years, you’d have repaid a stonking £11,223 by the time you’ve paid it off. This eye watering example reveals both the current state of Higher Education financing and a frightening future that is increasingly intruding on the present.
It’s long been said among left wing circles that the increasing marketisation of higher education would lead to a situation where the private sector would not only take control of the education provision but also of the way that it’s financed. Future Finance represents this fear becoming a creeping reality, as they openly market themselves as a solution to funding students degrees.
On the FAQ section of the Future Finance website they state that ‘if your government student loans aren’t enough, and you don’t have the bank of mum and dad to fall back on, we believe we’re a great option to help fund your education.’ This language appeals mainly to working class students, such as myself, who can’t rely upon their family for financial help and are frequently let down by student finance. I’m fortunate enough to have a job that pays me enough to just about make up the deficit, but many students aren’t as lucky, and could find that predatory loans like these are their only option.
In some cases, students caught in this kind of cycle of debt have sadly ended their lives
If a student takes one of those £7000 loans in their first year, they’d start paying back as little as £5 a month. However, this would then rise to £232 in their second year. Such a rapid increase in repayments owed will often create a further cycle of debt, where students face the prospect of having to borrow more in order to pay off what they already owe, potentially from even more predatory loan companies.
There are times I can remember when the sheer volume of debt I was under would keep me awake at night and affected my mental health. In some cases, students caught in this kind of cycle of debt have sadly ended their lives. These stories always come as a shock, but they are symptomatic of the situation that many students find themselves in during their degree. There can be no clearer representation of why the practices of companies like Future Finance are so disgustingly immoral.
The Future Finance business model, of ladling even more debt onto students on top of their already crippling government loans, reveals the repulsive lack of ethics that exists within the current economic system and the mindset of corporations. It represents the very worst of the financial system as well as the very real reality of the funding situation in Higher Education. As students find their loans drying up quicker and quicker due to ridiculously sharp rent hikes by both private landlords and universities, as well as the ever increasing cost of living more generally, Future Finance are just the first of many companies who will offer these type of loans at ridiculous rates. We saw it when the payday loans who targeted society’s most vulnerable with interest rates of 3000% were in the news a couple of years ago. This new wave of companies seem more reasonable on the face of things, but realistically are no better.
The sad reality is that without systemic change in the entire way that Higher Education is funded, this cycle of debt will become the norm for many students. There are, however, groups that continue to fight for a better system for all students. One of the most prominent is the National Campaign Against Fees and Cuts (NCAFC), who organise regular marches and workshop weekenders to build the fight against the marketisation of education. The most recent UCU strike this year brought the concerns of academics, whose labour has become increasingly casualised in an attempt to make even more money for their institutions, to the forefront. These groups and other trade unions, as well as many more in the sector, are still fighting for a better education. We can still prevent Future Finance and the inevitable host of copycat companies getting a foothold in Higher Education and changing it into the very thing we have always feared.
Featured image credit: Jonny Goldstein
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