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The True Cost of Education – How Traditional Student Loans Harm the Digital Economy – FE News

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Brett Shanley, Founder and CEO of Knoma

As the world around us becomes more digital, it is becoming increasingly clear that the future of our economy lies in technology.

According to research by LinkedIn, the next five years will create 150 million new jobs in technology. The catch, however, is that 40% of the UK’s working population lacks the digital skills needed to fill these positions.

While there are many people who want to make a career in technology, some may not have a deep understanding of how to go about achieving their goals. Instead, they receive a diploma that will not prepare them to work in their chosen field and thousands of pounds of debt.

Although the government provides student loans to many – currently nearly £ 20 billion is lent to around 1.5 million students each year – it cannot give students clear and sound advice on the most appropriate technology sector courses to implement their goals. ‘s aspirations, and so people focus on areas of technology that are not related to their career aspirations, the gap in digital skills continues to widen.

Where the private sector goes wrong

Many students turn to private sector student loans because it can give them access to more flexible lending and allow them to take larger amounts. In this sense, the goal of the private sector is to offer a viable alternative to public loans, which, in addition to being provided in a uniform, almost arbitrary way, are expensive, complex and rigid in nature.

Instead of being a gateway for students looking for more affordable credit that will allow them to finance tuition, the traditional private sector acts as another barrier for borrowers given the extremely high interest rates expected by a number of providers. pay them.

This means that many people cannot access the additional education needed to get a job in technology, but there are still huge amounts of money to be returned.

Thus, it is clear that a different approach is needed, in which students not only gain fairer and more accessible access to funding, but also receive valuable and clear advice on the courses they need to enroll in to gain the skills and training needed to enter tech .

Why do we need contenders for traditional models

A new type of loan provider offers a solution that puts students ’interests first. Using real-world data, applicants guide students in choosing a course that fits their technology industry goals. The student’s career aspirations and existing skills are researched deeply to determine which courses are right for them, and it is possible to identify those courses that are likely to be just a waste of time and money.

With no hidden fees or interest rates, students then work closely with vendors to agree on a repayment plan that they are happy with and that will be within their means. In this sense, students can be given more peace of mind that they are not only continuing their studies, which will help them achieve their career goals, but also that they will not suffer from any unexpected or expensive additional fees.

Moreover, given that a more transparent, practical approach to guiding students in the process of accessing finance means that credit providers are more likely to recoup their investments, this model is just as relevant to lenders as it is. from borrowers.

People need to be encouraged to receive additional education in technology

While the cost of traditional public and private loans denies people additional education in technology, the emergence of contenders for traditional models provides incentives and confidence that people need to seek the skills and training needed to work in the industry. .

As technology is constantly evolving, it is crucial for the continued prosperity of the UK economy that people’s skills develop along with them. There is no denying that the country is facing indefinite days, and that technology and those with the digital skills needed to use them will play a key role in our economic growth. However, at present, government and private sector loans only harm the economy, and students are not given sufficient instructions on how to achieve their career goals.

Only by making funding and further education advice more accessible can we begin to close gaps in the country’s digital skills.

Well Brett Shanley, founder and CEO Knoma

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