Selling off the student loans will actually cost the government more, as well as the students - but it'll be a profits bonanza for the purchaser
The sell-off of the student loan book threatens millions of current and former students with rising interest rates on top of already historic tuition fees and will transfer millions of pounds from public education into the pockets of private companies. The Student Assembly Against Austerity, now backed by the National Union of Students, has been building a campaign of resistance on campuses up and down the country. We co-ordinated a national week of action in February, with students taking action in over 50 universities, going into occupation at Exeter University and holding a protest and ‘debt-in’ in central London.
Because the sell-off threatens so many with a burden of debt they can never repay, it has the potential to mobilise a mass student movement against the government. But ultimately, its success will be contingent on its ability to reach beyond the campus and beyond student issues, to become a leading force in the national movement against the austerity which, in so many ways, is exploiting the 99% to pay for a crisis created by the 1%, and tearing up the very fabric of British society.
Why we have to #StopTheSellOff
If you borrowed money from the government between 1998 and 2012 to pay for your education, George Osborne plans to sell your debt on to banks and private companies, privatising the national student loan book. The government has already sold off all pre-1998 loans – worth around £900 million – at a massive loss to the public purse. Those loans taken out after 1998 are worth a further £40 billion.
The trebling of tuition fees left the average student over £50,000 in debt for an undergraduate degree – money they said they needed to fund education. Now they want to shovel all that extra ‘public funding’ out of education and other public services – and into the pockets of our new debtors. Really, everything you need to know about the sell-off is summed up in the fact that it took a Freedom of Information request to get any documentation about it in front of the public, and when the Guardian managed that, 90 per cent of the report was redacted.
Of course private companies are driven by profit, and according to that secret report leaked by the Guardian, they intend to make even more by hiking up the interest rates we all have to pay. Naturally, the government have made their promises that terms won’t be changed, but given their spectacular record for breaking promises to students (and everyone else), such assurances aren’t worth the paper they’re written on. If there’s one thing we’ve learned from the global economic crisis, it’s not to trust bankers with our money.
The Tory minister for universities, David Willets, told a select committee that the government reserves the right to change the terms of the loans – including the interest rate. This will mean for graduates what the tuition fee hike meant: a longer financial burden that’s harder to bear, curbs our freedom just as we graduate and makes higher education unaffordable for the majority of people, undermining social democracy as a whole.
While billed as a money-saving measure, the student loan sell off is no such thing. The Higher Education Policy Institute has concluded in its report that the policy is based on ‘highly uncertain and optimistic assumptions’ and underestimates the cost to the public because it fails to account for the fact that once in private hands, the government makes nothing on interest repayments. In fact, it would be cheaper to subsidise the entirety of tuition fees charged to UK students.
According to Andrew McGettigan, author of the Great University Gamble: money, markets & the future of higher education and a leading expert on the subject: “The ‘synthetic hedge’ may appear more acceptable than actually changing the terms for individual borrowers, but it still points to something profoundly troubling about current politics. The logic behind the sale is short-termist and contemptuous of citizens.” Ultimately, privatisation is about making a profit. The only question is when interest rates will rise and at how much the sell-off will cost taxpayers.
What is the Student Assembly?
The Student Assembly was a key initiative of the People’s Assembly Against Austerity, now the largest anti-cuts coalition in the country. It is backed by Britain’s major trade unions, numerous MPs and leading intellectuals, a broad range of groups (from UK Uncut and Disabled People Against the Cuts to Occupy and the Greens,) and with thousands of people now organising local assemblies in their communities. The People’s Assembly was called to unite them in a movement for social justice and against an austerity agenda which seeks to make the public pay for a crisis created by a rich minority. It opposes spending cuts across the board and campaigns for hospitals, schools, fire stations and libraries facing closure, and on behalf of all those struggling against unemployment, racist scapegoating, falling wages and soaring living costs.
The student loan sell-off has the potential to mobilise millions of young people who will be hit by its financial consequences. The Student Assembly has grown since our first day of action, and opposition has grown roughly at the rate we’ve been able to raise awareness about the sell-off that Osborne’s trying to pull off mostly under the table: meaning students that know about the issue are almost universally opposed to it. (As are 75 MPs now signed up to our early day motion, thanks to dedicated campaigning by students.)
But ultimately, graduating as we do into Austerity Britain, our remit must be as broad as that of the People’s Assembly – something we’ve made clear since our launching conference in November last year. As well as taking action in solidarity with striking academic staff, who have suffered a 13% cut in real wages since 2009, moving forwards we will continue to support the industrial action of workers on campus and beyond.
Student protests against privatisation and staff exploitation have prompted an escalation of the campaign by management and police to criminalise protest, which climaxed with indiscriminate mass arrests of student protesters and journalists in central London in December. As Lewis Nielsen, one of the ‘Sussex 5’ students suspended for peaceful protest against privatisation, said at SOAS’ Student Assembly rally: “The Sussex 5 were arrested because we were organising solidarity action on the picket lines. That’s what management are most afraid of: student and staff standing together to defend education.”
The privatisation of student loans, like the attack on higher education unions, are onslaughts against the very principle of public education. Neoliberalising the British education system, which has always been one of the most stratified in the world, will turn education from a right into a privilege. It will end up costing the government more in financial terms, while the social cost is incalculable.
The government is now calling for ‘permanent austerity’ – not to pay back the deficit, but to normalise for the next generation a system in which fundamental rights, to education, healthcare and security, are reserved for those who can afford it. This creeping privatisation, mirrored in the NHS and elsewhere, must be met with united resistance from across British society. This is not just about what kind of education system we want, but what kind of society we want for those that come after us.
99% of us are in it together, but the other 1% make the rules
While the government congratulates itself on GDP growth, 30 million Britons – including 1/6 children and 1/3 disabled people – live below the poverty line and someone loses their home every fifteen minutes. People are being confronted with a historic cost of living crisis as rents and energy bills soar. The fact that just 3 per cent of the welfare budget is spent on the unemployed illustrates that many people in work still can’t make ends meet between rising living costs and falling real wages.
Still, in 2010 the government spent tens of billions to bail out the banks whose reckless and fraudulent practices had caused the financial crash. The so-called recovery is a recovery of the 1% at the cost of the 99%. While they privatise public services, they are nationalising their private debts and scapegoating the most vulnerable members of our society: pensioners, single mothers, disabled people, migrant workers, students and the unemployed.
A callous economist with one eye on the greater good might argue that it’s all worth it, in the long run, to ‘save the British economy’. Only, it’s not saving the economy – not for most of us. The figures say consumer spending might be up, but it’s the rich who are doing the consuming while for the rest of us, real wages have been falling since 2010. Job creation is overwhelmingly in low-paid, insecure sectors and almost non-existent outside of London.
When they say cut back – we say fight back
This unprecedented transfer of wealth to the top of society is generating resistance up and down the country. That the Metropolitan Police is threatening to introduce water cannon for the first time on the streets of London explicitly to ‘control protest against on-going and potential future austerity measures’ shows that they know what we know: that the potential is there for a mass movement of people in this country who will not stand for the trashing of public education any more than the dismantling of the NHS or the abolition of the welfare state. The Student Assembly will be playing a central role in these campaigns moving forward while we continue to fight the student loan sell off. We will not be intimidated by police brutality, or draconian injunctions against peaceful protest.
On Budget Day, Peoples Assembly student and community groups staged actions from Dundee to Dorset to demand a People’s Budget, recently passed through our first democratic re-call conference. In 48 hours the petition gathered over 2000 signatures before we handed it in to Downing Street. We’ll be bringing it back on 21 June, which will be first national demonstration called by the People’s Assembly and already backed by the National Union of Teachers. We plan to assemble from BBC headquarters to make it harder for them to pretend we’re not there and to highlight their failure to present a balanced discussion of the austerity and the alternative. We’ll be marching to Parliament Square for a festival of resistance with live music and arts and a show of defiance as we bring back our People’s Budget. And as the cuts bite harder, services deteriorate, wages keep falling and living costs keep rising we will keep coming back. For as long as it takes.
In 2010 over 75,000 students lit the flame and hit the streets to battle against tuition fees and lead the charge against austerity. For the past four years we’ve lived the consequences of defeat. The privatisation of our student loans amounts to another attack of the same magnitude but this time there is a national anti-austerity movement emerging beyond the university. It’s time for our whole generation to pick up where they left off. This time we have the collective potential to take on the government – and win.
What you can do
- Contact the Student Assembly to link up with student campaigners on your campus – and follow us on twitter @TheStudentAssem
- Check out the People’s Assembly website to find out more about us, join the mailing list or find a community group near you
- Sign + share our petition for a Peoples’ Budget – and join the demo on 21 June!
From Our Kingdom
Marienna is a socialist writer and campaigner who studied Politics & International Development at the School of Oriental and African Studies in London. She is a leading organiser of the Student Assembly Against Austerity. She currently works as a filmmaker for the Islam Channel.
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