Student Tuition Fees: The Weird Thing

When tuition fees were introduced in Labour’s first year in office I actually marched on Parliament in protest.  At the time I had just completed my Masters and was clinging on for one last year as my University’s Student Union President (still the most fun ‘job’ I have ever had).

Every press release I sent out, every letter of protest that was written, every person who gave me the opportunity to bend-their-ear got the same message.  It seemed to me to be self-evident that the introduction of student fees could only:

  • Lead to lower take-up of Higher Ed across the board
  • More worryingly – lead to even greater social exclusion for those from poorer backgrounds
  • Lead to University closures and a diminishing of Britain’s academic standing

The only crumbs of comfort I could think of was that if students were paying they would become far more fussy and demanding which would drive up the standard of tuition.

Here’s the weird thing:  I’ve never been more wrong with a set of predictions in my life.  The take up of higher education went up and up.  This includes an increase in take-up from people from disadvantaged backgrounds.  Far from closures the number of higher education institutions and overall capacity increased.  I was wrong on every count.  The anecdotal evidence I have is that even my certainty that tuition standards and one-on-one teaching time would improve was  off.  I still find just how wrong I was quite sobering.

I obviously mention this now, because with today’s announcement that fees will increase to between £6,ooo and £9,000 per year the current crop of Student Union Presidents up and down the land are making the very same points as the once fresher-faced me.

Despite being proved spectacularly wrong on this issue in the ‘90s, to be honest I am still as nervous this time around.  I can’t sit here all smug that I got through the system with fees paid for and a maintenance grant because  I now have to worry about how my own two kids will afford the opportunities I had.  At some point we surely must hit the tipping point?  There has to be a cost that will put people off?  The headline £27k for a degree before living costs does sound overwhelming.

This prompted me to dig a little deeper into the detail of what is proposed.  As is so often the case the reality of the detail isn’t quite as alarming as the screaming headline – but it is still scary.  The proposals have students only repaying their loans at 9% of their income at a real rate of interest when they earn £21,000, up to inflation plus 3% for those earning £41,000 or more.   Any outstanding loans are written off after 30 years.  If you don’t end up in employment, you don’t pay anything back.  In terms of the technicalities of repayment and pressure to repay these proposals are actually a step forward from the current arrangements – though of course the overall amount to be repaid is much higher – but a step forward nonetheless.  A kind of ‘no-win, no fee’ arrangement.

It is still a whopping burden though.  I really do pity the kids who start life with that kind of debt, on top of already silly marginal tax rates to pay for the excesses of their parents’ generation.

Of course, Labour will oppose these moves.  That’s the nature and job of opposition.  There is no need to put forward an alternative, you can just yell ‘nay’.  The media will ignore that it was the Labour Government (actually Mandelson) who commissioned the Browne Report in 2009 that led to these changes.  In many ways this is history repeating itself.   In 1996 the then Conservative Government appointed Ron Dearing to do an ‘independent’ report knowing full well the recommendations that Blair and Blunkett would inherit and which led to the first tuition fees.  This time Mandelson and G. Brown knew full well what would be recommended by Lord Browne and that whoever won would have to go with it.  One silver lining for the loser of this last election was always going to be not having to catch and deal with being lobbed this particular ticking grenade.

The Coalition have actually watered down Browne’s recommendations a bit.  There is a cap on fees (albeit a quite high one), and there is more money for bursaries for the poor and early repayment levies so that the richer folk can’t get out of paying their share by paying off their loan early.

It is what it is.  The choice was always either to revisit student funding or cut back on HE provision.  Access to Higher Ed benefits the whole of society and so it was the right choice to revisit funding.

The changes are necessary but still depressing.  All I can do is hope that the weird thing happens again and that effects of student financing policy continue to be subject to counter-intuitive economic freakery that prove me, and all those earnest fresh-faced student union presidents, totally wrong.

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7 Comments

Filed under Centre Right, Economy, Education, Uncategorized

7 responses to “Student Tuition Fees: The Weird Thing

  1. so, simply; who declares if a graduate is earning and by how much?

    And, does such admin encourage people & those around to falsify statements under duress?

    • I would assume this is done under the tax-code – exactly the same as with the current variable tax rates. It would then be done under PAYE for the vast majority of people, and self-assessment for those higher earners as is the case now for everything else you are compelled to pay? (this is an assumption – I hope they’re not going down the old student loans company route – that was a failure for the old regime)

  2. As a student I was in favour of student loans ( shows how long ago that was ! ). So there’s been three waves of moving the costs of the general tax payer and onto the beneficiary of tertiary education ( but with a risk free element ).

    What alarms me most is there appears to be little competition in higher education – except to dumb down and provide higher exams results without the corresponding improvement in quality. ( My brother is a University lecturer and can easily cite the evidence for this ).

    Why is no one offering University courses for less money ? I bet all the major Universities will charge £9k as soon as they can figure out how to jump through the Coalitions hoops for appeasing dumb Liberal Democrats who don’t understand the world.

    When you consider this question you start realising that reform of higher education needs to go with reform of how it is paid for. Rather than the sticking plaster of artificial help for newsworthy minorities – we need an education system that is genuinely competitive in terms of quality and cost, rather than one that works by restriction of access to institutions that guarantee access to the best careers by virtue of their ancient reputation and alumni in blue chip recruitment.

    • The point about competition is interesting. I’m there are all sorts of weird economics going on (hence why all my original predictions went so wrong) – one that strikes me now you have said that is that on reflection Uni’s have organised into groups like the Russell Group or the 94 Group or whatever and in any other industry you might call this out as ‘Cartel Behaviour’ and legislate against it for skewing the market and stopping proper competition. I’ll leave someone with a better grasp of economics than me to try and unpick if there is anything in that….

  3. max

    Something that gets my goat about this Is that the university I went to (and dropped out of) was shit. The standard of teaching and the facilities in general were atrocious. I though the pre-top-up fees.I paid were too much. I think with higher fees should come demands of higher standards of teaching, and stricter regulations on what glorified 6th form college can call itself a university.

  4. Also, has ANYONE considered whether or not Universaties have the ability to tier costs according to means-tested students?

  5. Pingback: Tuition Fees D-Day: Final Thoughts |

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