Monday, December 06, 2010

Research says tuition fees scheme unfeasible

If the Coalition were so convinced their new tuition fees package was so fair, why are they rushing to introduce last minute sweeteners?

In an interview published yesterday by the Independent on Sunday, Deputy PM Nick Clegg reiterated the fable that the government's plan to hike tuition fees up to £9000 are "brave and bold and [a] socially progressive thing to do".

But if it was so socially progressive - which the LibDems claimed from the off - why is the Coalition feeling the urge to announce a last minute £150m scholarship fund to cover first year's tuition fees for less well-off students?

Either way Clegg didn't explain how poorer students will manage to make it to their A-levels, let alone university, given that the Coalition is proudly scrapping the EMA (Education Maintenace Allowance) for all students aged 16 to 19.

It's also interesting how the Tories' latest recruit keeps drawing specific examples of how much better off certain students will be with the new higher education scheme, while also steering well clear of explaining that in 60-65% of the cases students will be worse off - as recently highlighted by a number of studies.

The strongest indictment of the Coalition's ineptitude, however, comes from the fiscal side of things.

After both the Higher Education Policy Institute and the Institute for Fiscal Studies raised objections to the feasibility of the Coalition's proposals, a new study by consultancy firm London Economics adds that on top of impacting "adversely on social mobility and participation", the government's plans "will have to be covered by huge increases in borrowing to fund much larger student loans".

The report reiterates the point we made last Saturday: the Coalition's plans will not save the taxpayer a single penny. Quite the opposite. The Government will have "to borrow £10.7 billion to fund student loans in 2015/16 compared to the £4.1 billion it borrowed in 2010/11. If the Government’s plans are voted through, they will add a whopping £13 billion to public sector net debt by 2015/16".

"The plans are really a case of robbing Peter to pay Paul", was the comment of Pam Tatlow, Chief Executive of university think tank Million+.

The risks of a system replicating a miniature-style financial crash within a few years' time are obvious. Researchers explain how huge chunks of future graduates will never repay the full whack, many entering the 30-year write-off period with tens of thousands of pounds still outstanding.

In the summer of 2009, it had already been noted that "out of 1.4million graduates who started university in 1998 or later, 49 per cent were earning too little to pay back their student loans".

As regards tuition fees, 43 per cent of the most recent crop of graduates had not reached the current repayment threshold of £15,000, leading to the "doubling in five years" of outstanding student debt.

With the Coalition's new regime of trebled tuition fees and a higher threshold, the implosion of the whole further education system doesn't look unlikely.

6 comments:

thepatriot said...

What a load of B.S.
We all know think tanks are on the payroll of Labour so spare us the leftie propaganda.
Im an ordinary member of the public and I dont intend to spend even a pennie on propping up students.

claude said...

In which case you're in for some disappointment, "patriot". The Tories' scheme is going to cost the taxpayer and "ordinary members of the public" even more. Way more.

Charlie said...

Think tanks are on the payrool of Labour? Good lord patriot, you're managing to get even more ludicrous.

And students are ordinary members of the public too last I checked.

thepatriot said...

No Charlie their not.
Students choose to go to university and last I checked that's not a god-given right.
And, yes, 95% of think tanks are left leaning organisations and their number multiplied during the Nu Labour regime. Thats a fact.

Stan Moss said...

That's a fact?
A fact? A fact from where, the meanders of that idiotic brain of yours?
There are more right wing think tanks than your brain cells can actually deal with. Just read and engage your brains instead of fiddling with your tadger.

Alex.Roberts said...

"No Charlie their not."

Should be "they're" surely.