Young people who opt for university education are eligible for loans at preferred rates. They qualify for tuition loans of up to £9,000 per year, and for maintenance loans which could go as high as £8,200 per year for those from low income families. Most students assume this is a good investment that will lead to higher salaries over the course of their working lives, and are cushioned by the fact that only those earning more than £21,000 per year have to start repaying those loans. But young people who do not qualify for university admission, or who decide against it, are not eligible for similar loans. In fact young people starting out in work or seeking work find there and many associated costs. They often have to face deposits for accommodation; they sometimes have to buy new clothes appropriate for their work or their job-seeking. Most have no cushion of saving since few will have yet earned any money.
If young people not at university were given access to loans on terms similar to those available to students, many would find their lives much easier. For some it would help cover the costs of moving into their first independent accommodation. For others it might help pay for a bicycle to travel to work on.
For others, loans such as these would offer the opportunity to start a small business. Paying for driving lessons to pass the test and buying a car would be a real possibility for those who wanted to become professional drivers. Others might find themselves able to rent premises to set up as independent hairdressers. A range of small business possibilities would open up. Far from the world of multi-million software businesses, there are small one-person businesses that operate as gardeners, window-cleaners, street traders, hairdressers, and the like.
To set up a one-person business such as these takes initial capital, capital that young people simply do not have. Some of the lucky ones might borrow from parents. Some might persuade a bank to loan them money, but banks are wary of lending to those without collateral, so for most the possibility is ruled out by lack of available finance. A scheme like that which provides student loans, but which made them available instead to non-university young people would open up countless opportunities for advancement. For some it would help them with their move into the city to find work and accommodation. For others it would open the possibility to start up their own small business. It would reduce unemployment and encourage ambition.