University building - a fake economy?

[Cyclone]

Nobody wants to eliminate art. But there's nothing wrong with prioritising.

 

Did you not read the post I quoted?

 

---------- Post added 30-11-2016 at 07:30 ----------

 

The original post title was a question, not a statement. I know some people are prone to masking statements as questions but mine was a genuine question. I am wondering whether the system of student finance will implode because so many of the loans won't be paid back, and that the buildings will turn out to have been built on the back of unsustainable debt. Like commercial property before the 2008 crash.

 

I think it's pretty unlikely that the government will somehow go bust due to student loans.

They might revise the system at some point, they keep tinkering with it as it is, they do that to lots of things, that doesn't mean that the system has imploded though.

By "built on unsustainable debt" do you mean the student loans? Those may be indirectly paying for the accommodation, but ultimately the buildings will be built and they can just as easily be let out to people other than students.

There doesn't seem to be anything that resembles a bubble here, and the accommodation you're worried about is mostly built privately. The university is also building, but I presume they make a business case for each building, a fall in student numbers would have an impact, but they own a lot of property, some of which could be sold.

 

---------- Post added 30-11-2016 at 07:31 ----------

 

It seems that the bulk of new buildings going up in Sheffield are either being built by universities or for university students to live in. This is not so surprising given that universities can now charge £9000 per year in fees, and now that accommodation costs are funded almost entirely by borrowing, removing some of the incentive to keep costs down since it's all on the never-never.

 

What concerns me about this is that there is a big shortfall between what the government expected to collect in repayments of student loans and what they are actually getting back. This is not helped by Britain's low wage economy which seems destined to keep many below the threshold for paying the loans back.

 

So it looks like another bubble that will burst a few years down the line, with the only winners being the owners of the accommodation blocks.

 

This OP is full of statements by the way. The only question is the title of the thread.