There's nothing worse than being conned, than being scammed, particularly when it's a version of a Ponzi scheme.
And I need to talk to you this Sunday about a huge Ponzi scheme in plain sight here in the UK that is affecting hugely our young people. Yes, it's the student loan system, the numbers, the scale of it, completely unbelievable. I'm going to let you into a few secrets.
So we've got a situation where the taxpayers being ripped off, the students are being ripped off,but there's always a beneficiary of a Ponzi scheme.
Yes, the academics and the universities, they're doing rather nicely, thank you. But their big salaries, their huge generous pension schemes, their brand new buildings.
But at what cost? Well, I'm going to tell you, just imagine what's the size of the outstanding face value of all of the student loan book on the government, the government's loan book. It's absolutely enormous. You might think it's a few tens of billions.
No, no. It's £205 billion.
That's the face value of the outstanding student debt and within the next 10 to 15 years that is forecast to rise to over £400 billion. These numbers are hard to know what they mean. Here's the first scam though. The government's written down half of that 205 debt, the the face value, so it actually sits in the government's books at just over £100 billion.
But guess what they're doing? They're charging interest to all of the students on the student loan schemes, in many cases over 7% a year. Now they're charging interest not on what It's still in their books. Act, the 100 plus billion? No, no, they're charging interest on the £205 billion.
Does that sound to you like being fair? Really, the impact of that on people is absolutely huge and this debt is racking up every year. The government's writing off 12 to £15 billion a year.
Someone close to me left university three years ago with about 40 grand on his student loan. He's had a good job. He's been starting to pay it off because you pay off about 9% over earnings of above about £27,000. So he's been paying into the student loan system. But guess what his debt now is 3 years ago, It's 40 grand. It's now £47,000. How does that happen? I'll tell you why.
Because the interest is so high, most students can't even get on top of the interest, let alone eat into the capital.
In fact, you now need to earn at least £60,000 a year in order to pay not only the interest on the average student loan, but also to start paying in to the capital. Start paying down the actual capital loan that you borrowed, £60,000. That's twice the average national salary.
How's a nurse going to achieve that? How's a junior doctor going to achieve that? How depressing is that? That every year you're paying interest and you're into, you're paying money into your loan account, and yet the loan account goes up and up. It's like a form of a loan shark, the sort of egregious thing you see on the in some dirty backstreet off the High Street, for heaven's sake. The sort of thing we thought we'd got rid of. Now this is in plain sight. Loan sharks. A Ponzi scheme on our young people.
It's a damn outrage.
Here's another example.
Young lady I met on the train the other day. She fell for another part of this great Ponzi scheme. She she was told yes, if you go to university, fantastic. You'll get ahead. It'll give you extra job chances, you'll learn more money. She gets to the end of the three-year course and the people at university say, oh there's so many people with degrees like you, you need to get a headboard by doing a masters. Well that's another year of learning.
So she did her masters another 20 grand or so on her debt, which for her was then up to £60,000.
And yet the truth was so many people are doing these degrees and masters, it hasn't helped her at all. She's got an absolute mountain of debt that she can't get on top of, can't even get on top of the interest, and it's going to be a burden around her neck for decades to come. She's fuming, I'm fuming, and I think hundreds and hundreds of thousands of young people feel that they have been conned.
It really is an absolute outrage where you get promised that if you do this degree, you learn more, you'll get ahead. You don't get told the truth that almost 50% of all young people are going to university.
The quality of some of the courses, frankly, is woeful.
It's quite often the fact of life, isn't it? When the quantity goes up, the quality goes down. And that's what's happening at universities. Many of these courses, frankly, they don't need to take three years. They could be done in 18 months, 24 months.
They're just not good enough.
Many get less than 10 hours lectures a week, about 2223 weeks a year. I'm pretty sure last time I looked there's 52 weeks a year. So why can't you do some of these degrees in two years?
Our young people are being ripped off. The taxpayer is being ripped off.
This is a Ponzi scheme that is growing and growing. I first started talking about this 4 1/2 years ago in 2019 when I spotted what was going on.
We've got to change this. Our young people are being saddled. They're being conned.
You know they're being conned because Tony Blair's son Ewan has made an all credit to him. He's made 10s of millions of pounds profits by telling young people to do exactly the opposite of what his father said. His father said, I want 50% of young people to go to university. You and Blair is saying, don't go to university, do apprenticeships get a job, get out there, get learning from the moment you leave school.
And actually he's on the right path.
Here's what we need to do, and we need to do it urgently.
We scrap and we get rid of this Ponzi scheme by having zero interest on all student loans from now so that all repayments immediately
start repaying the capital that you've borrowed. And instead of doing that over a 40 year. You could do it over a 45 year. At least then students, graduates, they'll feel they're making progress in reducing that loan.
Postgrads as well if they've done a master's and got a bit more debt. That's the first thing you need to do. The second thing we've got to do is we've got to have many, many more courses that are optional to do in two years, not three years at the choice of the student. So if you want to get on, if you want to save 15 to 20 grand, you work a bit harder, You do it in two years, you're off to work, happy days. The third thing we need to do, and this is important, is that there are far too many people, frankly, whose academic qualifications should say to them go and do some vocational training, get an apprenticeship, get into work. Don't waste your time doing a dodgy degree at a dodgy university and racking up a pile of student debt. So we actually need to limit and reduce significantly the number of degrees, actually, basically what you and Blair are saying, possibly by 15 to 20%. Get rid of the dodgy, useless, worthless degrees, stop wasting people's time.
And if you do these three things, that's how you fund having zero interest on all the Student Loans. That way our young people are not being shafted, not being conned, and actually we'll have more money to start saving for a deposit, for example, to buy their first home.
That's the right and fair thing to do in society.
We know it's right. We also are shocked to hear that students in the UK have the highest levels on average, of student debt across the developed world.
That because of the huge levels of interest, they can almost never get on top of a simple three-step solution to stop the con, to stop the Ponzi scheme.