Tag Archives: tuition fees

The economic consequences of tuition fees 

 

Volumes have been written on this site and elsewhere about the political, moral and social impacts of the coalition government increasing tuition fees in the last parliament.

I do not propose to rekindle that debate, but rather to examine the emerging, and potentially very long-term economic consequences of tuition fees.

Whilst the UK economic recovery started to gain a genuine depth, public policy makers and private sector market participants alike commented on both the narrowness of the recovery (the rate of growth being pedestrian for an economy exiting recession), the lack of wage growth, the subdued level of capital investment and lack of productivity growth.

Some of those metrics, notably wages, have shown improvement more recently, whilst demographic changes and the impact of quantitative easing on asset prices carry much of the blame for some of the other structural ills that have haunted this economic recovery.

But it is the contention of this article that the tuition fee rise has had a direct impact on the progress of the UK economy in recent years and will continue to do so in two distinct ways.

Posted in Op-eds | Also tagged | 86 Comments

Liberal Youth members fight NUS Liar Liar campaign by donating to Liberal Democrat campaigns to #trollNUS

The National Union of Students has spent £40,000 of its money on billboards urging people to vote against MPs who broke its pledge on tuition fees in 2010. This, it should be noted, was a pledge in which they did not believe themselves. When the Browne Review came out, they were calling for a Graduate Tax. The system implemented by the Coalition is not a million miles away from that.

It should also be noted that NUS is not endorsing those Liberal Democrat MPs who actually kept the pledge, either.

The whole point of a liberal youth organisation is to stand up against unfair, collectivist nonsense wherever it may be found. Liberal Youth’s response to the NUS is very creative. It’s encouraging people to donate to Liberal Democrat candidates to troll NUS. Some of them have been making a special point of donating to Nick Clegg’s campaign to annoy NUS to the max.

This is not to say that they totally endorse what the Liberal Democrats did on tuition fees. They know we made a big mistake, but they see the nakedly partisan NUS campaign for what it is. Where was their campaign against Labour MPs who introduced tuition fees and top-up fees when they said they wouldn’t?

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The Independent View: A new report from CentreForum highlights the problems with Labour’s tuition fees policy

A new report entitled “A Labour of Love?”, released today by CentreForum and written by Tom Frostick and Chris Thoung, weighs up the pros and cons of Labour’s recently announced policy on tuition fees, one which revolves mostly around the fees being cut from their current £9k maximum to a £6k ceiling. The report can be read here.

On the plus side, the policy does acknowledge the importance of maintenance grants. It also reopens the discussion that needs to be had regarding the balance between state and individual investment in undergraduate education by lowering the percentage of loans the government estimates will not be repaid. It would also apply to all undergrads, including those currently studying, so would be fair in that regard.

But there is a lot to say about the policy that is negative. If introduced, it would have little to no impact on a staggering lowest 60% of graduate earners and would mostly benefit higher earning graduates only (and even then, up to twenty-eight years after they’ve left university). It is also costed in such a way that could discourage pension saving, and its higher interest rate scheme for wealthier graduates contributes only modestly to the intended progressiveness of the policy. 

Posted in Op-eds and The Independent View | Also tagged | 61 Comments

IFS: Labour fees plan will not make any difference to repayments by the poorer half of graduates

Interviewed by Mark Mardell on the BBC’s World at One yesterday, Paul Johnson, Director of the Institute of Fiscal Studies made these comments about Labour’s tuition fee plans:

photo by: schwglr
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Money saving expert Martin Lewis on Labour’s fees policy: ‘Poorer students will subsidise city investment bankers’

Here’s part of what Martin Lewis, the Money Saving Expert, said on the BBC’s World at One today:

This is the worse type of politics for me. It is the politics that may appeal to people on the surface but it is financially illiterate…If any other party was launching a policy that effectively meant that poorer students would be subsidising city investment banking graduates, which is what this does, there would be protests in the streets and it would be led by the Labour party. I simply don’t understand how they’ve launched this.

Posted in News | Also tagged and | 66 Comments

Institute of Fiscal studies: Labour’s tuition fees plan would “benefit higher income graduates”

In a detailed report, funded by the Nuffield Foundation, on Labour’s higher education funding plans, the Institute of Fiscal Studies concludes:

The reform to HE funding announced by Labour on 27th February would:

Posted in News | Also tagged | 40 Comments

Vince Cable: Labour’s tuition fee plan is “financially illiterate”

Commenting on today’s announcement from Labour, Vince Cable has said:

Labour’s policy is based on a soundbite, and as a result, is completely financially illiterate. It will do great harm to universities and create a costly black hole in the national budget.

Posted in News | 33 Comments
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Recent Comments

  • User AvatarWilliam Hobhouse 7th Feb - 10:29am
    Ian, thanks for comment. I look forward to the debate in York. We will probably be on different sides of the argument. We will disagree...
  • User AvatarTim13 7th Feb - 9:58am
    Again, attrition rates of all candidates are not good, for a variety of reasons. Certainly family reasons are one. Money (should I say, lack of...
  • User AvatarRuth Bright 7th Feb - 9:42am
    I suppose the key Ian is whether those women come back to stand again. In my experience the attrition rate for female candidates is terrible....
  • User AvatarManfarang 7th Feb - 7:47am
    The dark storm clouds are again forming on the horizon. Who knows maybe there will be another full blown financial crisis next year. One with...
  • User AvatarEddie Sammon 7th Feb - 7:38am
    Hillary Clinton has lost Twitter. Now, this wouldn't usually be a problem, but for a candidate pitching for votes on the left it is bad...
  • User AvatarIan Swales 7th Feb - 12:32am
    William. I guess you and are having a heated agreement. The important thing that few people are mentioning is that a high proportion of our...