There is an interesting article Sunk before they’ve even begun in the July/August issue of Real Business magazine regarding the effect of student debt on entrepreneurship. The article, was interesting because it touched on a seldom visited area, a number of articles have already been written to the effect that fewer students are going to go forward to caring professions, creative sectors or push the boundaries of knowledge because of the weight of the debt compared to their likely earning potential. According to the article, little research has been done in the area but empirical evidence would tend to indicate that student debt (which has risen considerably) has produced graduates who are less likely to innovate or take risks. One of the key reasons why this is occurring is that while UK universities are wanting to become like their generously private funded US counterparts, the universities are not holding up their side of the bargain. In the US, universities provide a wide and deep network of contacts for students and have close relationships with sources of venture funding. Something that UK academics provide a sketchy infrastructure that is a shadow of the facilities available to American students.
In addition, the UK has nothing equivalent to the veterans programme where the poorest members of society can go to college after a minimum amount of time spent in military service. If I was going to college now instead of ten years ago (after I had been made redundant in the downstream oil industry), I would not have been able to afford it and would be pushing boxes around a warehouse.
The UK stock exchange already underperforms the US stock exchanges because we have so few young entrepreneurs coming through like Michael Dell, Jerry Yang and David Filo or Larry Page. By giving into the free market demands of the further education sector Labour may have sown the seeds for further underperformance of the UK economy in the long term.