Charlotte Street Partners

VIEW FROM THE STREET

VIEW FROM THE STREET

I went viral and here’s what I learned: student finance discriminates

Written by Sabina Kadić-Mackenzie, associate partner
8 September 2020

There’s a good reason my social media musings have never gone viral before. I post excessive amounts of ‘#nontent’ for one; too many dinners and home décor ideas. I also care far too much about what others think to really let loose.
 
I’m the person that spends 20 minutes typing a detailed rant, my fingers doing their best impression of Michael Flatley, channelling the rage as I type; only to pause, re-read, reconsider and ultimately delete after an internal monologue worthy of a Shakespeare theatre production.
 
That all changed a couple of weeks ago, however, and it started with the Student Loans Company (SLC) which, admittedly, would not have been the first topic I’d have imagined would secure me more than my allotted 15 minutes of fame.
 
After a short phone call to SLC a few weeks ago, I was left speechless to discover that after 14 years of repayments, I am still nowhere near repaying my loan. As if that wasn’t enough of a shock, as I relayed this news to my husband over the dinner I’d just posted on Instagram, he casually informed me that he is due to have paid his off entirely before the end of this year.
 
How could this be so? We attended the same university. At the same time. We studied the same course and left with identical degrees. We’ve even followed very similar career paths since. So how on earth had we diverged so decidedly on this measure?
 
Then it dawned on me. The difference, of course, was obvious. Unlike him, I had given birth to our children. Two daughters meant two periods of maternity leave which totalled 24 months of not earning enough to make payments on my loan.
 
It reeked of unfairness, but it got worse.
 
Under the current system, when a woman goes on maternity leave and her pay – in the majority of cases – drops below the repayment threshold, not only does she not make any repayments but the interest on the outstanding balance is allowed to accrue, cancelling out many previous payments as it does so.
 
All of which equates to a motherhood penalty if ever there was one. I say “mother” rather than “parent” with good reason, as despite new legislation which allows for parental leave to be split, less that one per cent of new fathers have taken up the offer, leaving women literally holding the baby, as well as roughly two-thirds of the total student loan debt in the UK.
 
As academics Emily Yarrow and Julie Davies wrote last week on The Conversation, the motherhood penalty is just the start of the story. They highlight that graduate women on maternity in the UK take longer to pay off their student loans in full, and is it really any surprise? The UK government estimates that for students starting university during or after 2006, the typical student loan debt accrued on graduating would take an average of 11 years to repay for men and 16 years for women.
 
So, instead of climbing down and bottling-up my fury, this time I took a deep breath, steeled myself, and hit the blue ‘Tweet’ button. Reader, it went viral.
 
Tens of thousands of engagements, likes, comments and equally irate reactions followed, with hundreds of messages of support from men and women around the world, including influential commentators like Caroline Criado Perez and Gloria de Piero.
 
While the reaction from the Twittersphere and media alike has been wonderful and overwhelmingly supportive, the most surprising thing of all has been the surprise itself. The revelation for people who have held loans for decades, that a system that is supposed to be a safe and fair way for everyone who seeks further education to secure the funds they need, could be so blatantly discriminatory.
 
And the most disappointing? Aside from the misogyny, the sheer lack of acknowledgement from SLC and Westminster and Scottish governments alike has been staggering. Each has effectively passed the buck with anodyne statements about payments being linked to income, earning thresholds, and how the loans are written off when graduates enter retirement.
 
Each of them misses the point in different but equally frustrating ways. At its heart, this is an example of an instance in which the difference between equality and equity matters. Treating everyone the same in this situation doesn’t have the desired effect and therefore must be addressed.
 
There are solutions out there, if we are prepared to look for them. In Norway, for example, student loan repayments and interest are frozen for 12 months while a parent is on leave, which seems a much more equitable system to me.
 
We owe it to future generations – I owe it to my daughters – to ensure that if they choose to apply for student finance and also have children of their own, they won’t need to tally up the additional cost they will bear as a result.
 
Post-lockdown and post-Brexit, young people’s futures are already being disproportionately affected. In the words of Yarrow and Davies, “many young people already feel like their future has been stolen from them. Removing the motherhood penalty on student loan interest repayments would at least signal some hope.”

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