For ever in their debt (1 of 2)

Replacing direct grants to universities with tuition fees backed by loans cuts the government's annual deficit. Borrowing to award grants to universities is counted as public borrowing, but doing so to make loans to students does not count: it is treated as capital spending, which takes it out of the annual deficit figures. However, the increased borrowing needed to fund higher fees (and the resulting higher loans) will add £5 billion a year to public sector net debt, far more than the £3 billion a year saved by cuts to the grants.

The government expects most of this borrowing to be repaid by graduates, but the debt will be paid down only if annual repayments match and exceed annual outlay. The Office for Budget Responsibility thinks this will happen some time around 2032.

However, the number of graduates unemployed six months post-graduation has doubled in the past five years, according to the Higher Education Statistics Agency. And the Office for National Statistics' March 2012 survey Graduates in the Labour Market found that 35.9 per cent of those graduating in the previous six years had low or unskilled jobs, up from 26.7 per cent in 2001.

At present rates of job destruction, who knows what the figure will be in 2032?

In the US, the total amount of non-dischargeable student loan debt is now more than $1 trillion (£625 billion), more than the country's credit card and auto loan debt combined. A quarter of all student loan payers are delinquent. Much of this debt will remain a permanent burden, reducing millions to long-term peonage. Is this an example to follow?

Will Podmore, British School of Osteopathy