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Comment by naithemilkman | Hacker News Reader

The problem is systemic.

1. Startups can't recruit overseas students or highly skilled workers anymore without applying for a tier 2 sponsorship license. Talking about lead time of 1 1/2 months and jumping through admin hoops for approval.

2. Local students are starting school with a bigger debt due to increases in tuition fees. Now if I was a young talented programmer with a big debt (average debt of a student now is around £18K. I estimate this to increase to about £24K), the glowing lights of the city looks very attractive.

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There's always going to be a huge salary differential, a startup might pay a graduate £20k/year while an investment bank could pay the same graduate £40k/year.

So I'm not sure if higher debt is going to sway people's career choices (especially given the way the debt is structured means you can make lower payments if you're earning less). Although it is one of the major arguments in favour of a graduate tax as opposed to higher tuition fees.

I guess we'll have to wait and see what impact it has in practice.

True that. But I suppose the lure of the city has always been in place for a student with a debt of £1k or £10k.

Is it really so bad? 18k is a lot of money, but it isn't that large a run for a good university graduate, and it is very little compared to what US graduates can expect to pay; yet they start plenty of companies.

Might the reason not be that the difference lies with the people and not the environment?

Student fees should not put someone off starting a start-up in the UK because you don't have to pay anything back until you're earning > £21k, so a founder wouldn't have to pay anything until the business could afford to pay them.

However, there are other reasons that deter people from launching start-ups in the UK, 1) it's expensive - London is very expensive, general living costs are higher than the US 2) The City is a disproportionately large draw for UK graduates, finance is a larger percent of the economy, compared to say the US.

> Might the reason not be that the difference lies with the people and not the environment?

There probably is an element of that; British people tend to be less entrepreneurial than Americans.

> (average debt of a student now is around £18K. I estimate this to increase to about £24K)

I think the increase will be more than that. Tuition fees are due to rise from the current £3000 to a maximum of £9000 pa. This is on top of a loan for living expenses of £4000. So a typical student debt may rise to £39k. Furthermore the government is increasing the interest rates on loans.

All this together will make a well-paying job more attractive to a programmer having just left university than a startup.

yeah thats a max figure for sure. scary isnt it? i was trying to be conservative :P

>average debt of a student now is around £18K. I estimate this to increase to about £24K)

Fees are trebeling to £9000 a year add in maitenance loan costs and you're looking nearer to £50k. How do you calculate that the average debt will only increase to £24k.

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