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Higher Education: A three-year course in debt management: George Low worries about how his son, who is studying at Loughborough University, will repay his student loans

'NEITHER a borrower nor a lender be' was Polonius's advice to his son when he went off to study in France. His point was that lending lost you friends and borrowing 'dulled the edge of husbandry'. Polonius would not be giving that advice today: survival in higher education depends on rich parents or loans. Debts are now an essential ingredient in the system.

During the late Eighties, Robert Jackson, then higher education minister, and John Major, then Chief Secretary to the Treasury, decided that students must be forced to borrow - in order to learn the disciplines of the market. The idea of a state subsidy had to be replaced with the idea of higher education as a commodity to be hire-purchased and paid for later from well-paid jobs.

The new philosophy was flourishing at Loughborough University last weekend. All the high street banks had opened branches on campus. They were offering free umbrellas, T-shirts, filofaxes and tapes to any fresher opening an account. Drunk or sober, they were being signed up for three years of low-cost overdrafts. The banks did not say what would happen when the spending spree ended, but by then they would have the customers in their thrall.

It was not long before my wife and I were heading off to a bank ourselves to meet immediate student needs. Deposits on rooms, registration fees and phone cards had left our ready stocks depleted. Not to mention the odd tenner to ensure our youngest son, Jake, did not starve on his first weekend in a hall of residence.

Loughborough still calls itself a 'university of technology' and expects its students to come armed with tools. Unfortunately, the tools, some of which are highprecision instruments, do not come cheap. As an industrial design student, my son was also told by his tutor to brush up on his maths. A book list was appended. That was pounds 200 on the parental slate even before term started.

Board and lodging will cost pounds 1,000 a term. Since Loughborough is strong on sport, kit such as rugby shirts and tracksuit tops will have to be purchased on the never-never. Lab coats and overalls are another part of the uniform to be provided at the student's expense. But because Jake had not been able to get a job during the summer, his budget started at zero. Fortunately, one of his brothers has handed him down a suit and his father lent him a tie.

He does not expect a state subsidy but he does not like the idea of 10 years of debt. He certainly does not like sponging off his parents when many of his former classmates are earning good money in jobs. He hopes to design environmentally friendly products for British industry. But he reads in the press that A-levels have been devalued and that universities are scraping the barrel by taking in people like him at the taxpayer's expense. Gillian Shephard, the Secretary of State for Education, has just set up a review to find out what higher education is doing for the British economy. How will that help my son? He will have to work his way through university and try to keep his borrowing down, but it won't be easy.

Although the prospects of a job at the end of his course are high, the rewards are low and sometimes precarious. He is aware he could be caught in the 'poverty trap' now ensnaring people who have taken out a student loan and then been caught on repayments. He notices that the engineers and science teachers are being given grants and bursaries to assist them with their studies. If the Government can intervene in the market for them, then why not for industrial designers, he wonders.

Mrs Shephard asks what students should be learning to 'underpin a modern, competitive economy'. Does she really mean that - or should it be 'underpinning the banks and student loans business'?

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