The average student debt now tops £13,500. For many it’s far higher; for those pursuing post-graduate education it’s scary.
Surely we’ve reached the point where we’re going to start pricing people out of education? That has a huge impact on skills of course but putting that massive issue aside, we’re almost certainly also handcuffing our next generation of innovators and entrepreneurs.
Even if we weren’t in the middle of a credit squeeze, if you’d already got going on £20,000 worth of debt in your name would you not think twice about taking on more to start a business?
Would the risk seem too high? Would the bank think you’re too high risk?
The 12 or so avid readers of this blog will have guessed this stream of thought was prompted by Newspepper founder Hermione Way’s reply to my comments last week on the need to move beyond the ‘hand-out culture’ of people wanting business grants to start-up and my claims that borrowing ensures a company is profit-focussed.
I stand by those claims, but Hermione’s certainly got a point that students’ financial predicament is uncatered for by the government’s enterprise support and the wider financial sector.
Hermione needs investment. The Prince’s Trust have rejected her application and now she’s caught in the trap of plundering further down the debt trap to get her start-up established.
Of course, there’s an argument that starting a business is all about risk and thousands of millionaires once gambled on bankruptcy before making their fortunes, but surely anything that discourages enterprise and potentially our brightest future stars needs addressing?
There’s been a lot of talk about an equity gap for growing small companies; something that’s been largely disproved by Doug Richard’s excellent work at Library House and diluted by an increase in the number of commercial and government funds focussed on this area.
With grant funding targeted largely at disadvantaged areas and R&D, are students now the new equity gap? And is the government's job to plug that gap? Over to you...
