Deconstructing debt

Higher fees will lead to greater student indebtedness, so we need new ways to 'sell' this fact, argues Kathryn Jones

July 14, 2011

When it comes to higher education marketing, the quest has always been to find that elusive "unique selling point" to enable institutions to stand out from the crowd. Marketing directors in the UK have spent considerable time, energy and money (often hiring expensive consultants) on identifying the USPs that would persuade students of the benefits and value of their university over and above any other.

When tuition fees were first introduced, students started to question their post-18 options a little more; they began to exhibit the decision-making and post-purchase traits of consumers (although most of us wouldn't dare use that term internally). They wanted more information and their expectations about the student experience rose, along with the number of complaints: this was dubbed the "marketisation" of the sector.

Our focus shifted to include increased communication of the general benefits of a university education - the transferable skills, individual development, enhanced job prospects, additional earnings of £100,000 or more over a career and so on.

But today is a different world from the one we can expect next September. Nobody really knows how the market will react to higher fees from 2012-13, but only the foolish would assume that the heady days when demand exceeded regulated supply will continue.

The focus now is on the cost of degrees. Research from insurers ING Direct found that one in eight parents has started a university fund for their children and of those already saving, about 10 per cent have increased the amount as a result of the fees hike.

It doesn't take a genius to work out that the biggest obstacle to overcome if we are to maintain demand for higher education is the attitude to debt. Parents (like me) are now frantically trying to save because while we recognise the value of higher education, we can't stomach the idea of sending our offspring into the world with a huge debt hanging over them, which we probably never had ourselves.

I was brought up to avoid debt - only mortgages were acceptable. The majority of us would happily choose to invest in our future by buying a home and taking out a long-term loan to do so, paid off with interest over 25 to 30 years. Sounds familiar, doesn't it?

We're now asking people to invest in their future by educating themselves to a higher level and to commit to long-term loans that they will pay off with interest over a period of up to 30 years. Unlike mortgages, the payments against income are fractional. There is no risk of students having their degrees taken away if they fail to pay. If their income falls below a certain level, they will stop repaying without penalty (other than accruing interest) and the debt is written off after 30 years. It sounds so simple.

So I'm with Martin Lewis, founder of, on this one. At the launch of Universities Week earlier this month, he described it as a "national shame" that for 20 years our youth have got into debt by going to university, but we've never educated them about debt.

The real job for university marketers is to educate prospective students and their families about debt. I believe the value of higher education is well evidenced, but its value as an acceptable debt less so. We need to make "study debt" as palatable as mortgage debt. Perhaps we need to come up with a term like "mortgage" that doesn't directly reference cost, fees or loans (which are negative and frightening); a term that in future will become an accepted norm for those who wish to take this option. I'm not convinced that "student loan" is cutting it.

In future, we will no doubt continue to market our universities, but the priority - for as long as it takes to change the culture - will be selling the debt that comes with higher education. And while there are lots of good communicators of the benefits and value of university education, financial services are probably not our natural area of expertise. I look forward to the "toolkit" of plain-speaking messages that Lewis is currently creating for the sector.

As for me, until I get over my own issues with debt, I'll keep topping up the college funds.

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