I’m going to write more on the UK welfare problem later this week, but amid all the talk about the removal of universal benefits from well-off pensioners and so on, I want to point you briefly towards an article in the Sunday Telegraph this week.
It tells the story of a nice-sounding lady called Christine Armstrong. Armstrong is 66. She has just completed a BA in English at Oxford and is now doing a Master’s degree. She loves it. The “beauty of doing a degree in your 60s”, she says, “ is that you really want to do it.” So, all the reading, which might be a chore for the young is a “great pleasure.”
Your first thought, I dare say, will be that you are impressed. You will think it makes sense for the retired to keep themselves active of mind and body and you will know that those with a goal of some kind tend to live longer and be healthier than those who do not. But what if I told you that you are paying for Armstrong to keep herself busy?
Under the new student loans system (I think of it as more of a progressive tax – see my blog on it here – but we’ll call it a loan because everyone else does), no one on an income of under £21,000 has to pay back their student loans to the taxpayer. Armstrong has taken out a student loan to cover her tuition fees (the maximum is £9,000 a year).
She has also received a maintenance grant (£3,354 if your household income is under £25,000). Armstrong’s pension income is under £21,000. The result? Her loans aren’t actually loans. They are gifts from us to her. And rather large gifts too – if she has taken the maximum every year, she is costing us over £12,000 a year. I’d love to live in an economy where this kind of thing was OK. Sadly we don’t. We just can’t afford this stuff.
You can read the original article here: ‘I’ll never have to repay my student loan’.