According to new figures published this week by the Office for National Statistics, graduates earn 85 per cent more than people with only GCSE qualifications over their working lives. Extrapolated over a 40-year career lifetime, graduates are likely to earn almost £1 million more than those on current average pay of some £25,000 pa.
The latest statistics show that the differential has fallen from 95 per cent in 1993, though the level of earnings has increased substantially over those 18 years. Their publication may reopen the debate on student fees – and incite some resentment among non-graduate taxpayers that they should have to subsidise people who are going to make a million more than them.
When looked at from that end of the telescope, it does not seem too onerous for graduates to have to repay some £30,000 or so when as a result of that investment they earn many multiples of that sum. They will still be some £970,000 better off (before tax) than non-graduates by the time they retire.
It may not do anything to stem justified cries of unfairness felt about the fact that those of my generation, and later ones, enjoyed much greater levels of public subsidy, including not just fees but generous grants for subsistence and fares as well. However, few of the tiny minority who went into higher education then measured studies in terms of shillings and pence.
My concern is less about the levels of loans being accumulated; what is spent on education should be seen more as a mortgage than a debt – an investment in their career. But I do believe repayment should be spread more equitably over the life of the career, with little or no interest charges.
Much of the passion about betrayal felt by current students will have dissipated by the time we reach the next election in 2015. Hopefully, they will be in jobs with good prospects and the loan will not appear the same threat to solvency it does now.
A new wave of undergraduates may still feel sore and anxious about the much higher sums they will have to repay, but not the same anger against those Liberal Democrat MPs and candidates unwise enough to sign the tuition fees pledge.
What is much more important in higher education is to deal with those Oxbridge (and other Russell Group) colleges who do not admit any – or disproportionately few – black students. And revolutionise admission practices so that those who take the vocational route have a statutory right to continue their studies to degree or (more correctly) Levels 4 or 5.
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85 Comments
I wonder if the author of this article attended university and had it all paid for him by the state?
This knee jerk reaction that we should just forget about peoples economic backgrounds and focus on their race is just wrong. Education should be free. What next? Should we excpect cancer victims to pay for their healthcare because they are going to live for many more years if their cancer is dealt with? Many graduates also pay more tax and so benefit the community more.
Also don’t blame candidates for signing the pledge, the party encouraged them to do so.
Nice weasely use of the word “whingeing” to describe disagreement and protest. And what a distortion of the truth to call graduates millionaires because they MAY accumulate that sum over the course of a lifetime. Anyway I doubt any millionaire is whingeing when arguing against fees and or demanding our wonderful system of free higher education back: it’s not about fairness, it’s about access to education. It’s a total disgrace that Libdems have found themselves complicit in this sorry state of affairs, and getting digs in with words like ‘whingeing’ or ‘millionaries’ isn’t going to help your case.
Right and so if they earn 85% more how much more tax do they pay over their life time.? Would that figure by any chance dwarf the cost of the government funding their University education.
Oh and also who is to say their increased earnings are due to having a degree as opposed to the fact it is mostly the brighter and more able people who carry on and do A levels and then go to university.
If you look more closely at Oxford and Cambridge admissions, you’ll see that they usually accept a reasonable proportion of applications from black students, and what’s really going on is that almost no black students apply, and the ones who do are more likely to apply to oversubscribed courses.
Something’s wrong there, but it’s not obvious what, or how it could be changed.
Good comment Andrew Suffield.
Nearly all the “problems” in university demographics reflect disparities in the people applying to university, not the admissions policies of the universities. These myths get debunked year after year after year, but people still keep bringing them up again.
How it could be changed is with earlier and better educational counselling about taking appropriate A Levels and aiming for a wide range of courses rather than only the most ‘aspirational’ ones.
The only figures available for how much graduates earn over their working lives is surely from people who have had working lives. i.e. Those who were among the less than 10% who went to university in the 1960s. With many more young people having degrees now, a degree is bound to make less difference.
What a ridiculous comparison. A leap from GCSE’s to Degrees, missing out apprenterships, diploma’s, NVQ’s etc. Perhaps they are “whingeing” because the Lib Dems lied to them and with articles like this appearing to justify this duplicity appearing with such regularity from Lib Dems I would not expect them, or their parents to forget by 2015.
Of course if you can point out where the Lib Dems in advance of the election told graduates they should pay these levels then calling them whingers may have some justification. I just can’t remember Clegg talking about them having a mortgage on their education…
Now a decent look at the figures show that those with A-Levels earn 15% more, great let’s charge them. What next, fees for FE and perhaps even top set maths. It also clearly showed that as the percentage of those with degrees rises the differnetial lowers. Project this decline forward to a time when those who graduated in 2002 (after Labour started to increase numbers in HE) make up the eldest of the working population and the picture will not be as rosy.
You say that “Hopefully, they will be in jobs with good prospects and the loan will not appear the same threat to solvency it does now.” The ONS also say that the percentage of graduates in low paid jobs has risen from 9% to 17%.
We should have a referendum on this subject, but it should have a catch. Anyone who has benefitted from a free education that wants to restrict this right for future generation should cough up the 27K. Those that also had a grant for living expenses should pay these as well. If they don’t have the cash take out a mortgage. It must be fair as they won’t be paying up front.
Anyone not willing to do so is a hypocrite, after all those not willing to give over some of their 95% extra are just a bunch of whingers.
Pathetic and just when I thought the party was begining to remember what it stood for.
This is without exception the most ill thought out posting I’ve ever seen on this site.
Based on one statistic a whole tissue of idiocy is constructed….
There are a few problems with comparing lifetime graduate earnings with lifetime earnings of those that leave school with just GCSE’s. Julian raises one of these problems, but I can’t help thinking that a fairer comparison of the value of a degree, might be with those that leave school with A-levels as this is the point at which free education ends.
However, even this isn’t a particularly good measure, because those that end their education at 16 or 18 usually do so because they lacked the grades to continue further. Whilst there are a number of reasons why people fail to progress academically, the most obvious is quite simply that they are not as intelligent as the person who did progress. So what you could be measuring is (to a certain extent at least) the difference between the career earnings of smart, motivated people vs. less intelligent, unmotivated people.
And yeah, social factors, teaching standards all play a part, perhaps what we are really measuring the difference in career earnings between people who were born into middle-class families versus people who were born into poorer families. Either way, the comparison doesn’t appear to be particularly meaningful without closer more detailed analysis.
Anyone still labouring under the delusion that the Coalition aren’t destroying the HE sector for impenetrable reasons should read the HEPI report.
http://www.hepi.ac.uk/466-1987/Higher-Education–Students-at-the-Heart-of-the-System.-An-Analysis-of-the-Higher-Education-White-Paper-.html
The basic rate of income tax until the 1980s was more than 30 per cent, so a lot of 1960s graduates did pay a much higher proportion of their income to the State. If only we knew what rates of tax will apply over the next 40 years, and what personal allowances, tax relief, pension contributions, etc . But 85 per cent gives considerable leeway.
And the reduction in the differential from 95 to 85 per cent surely reflects the increased number of graduates over the last 18 years. That rate would have to speed up by 2.25 times to reach zero by 2051.
My point is that if a degree on average makes a substantial difference to individual income, then there is some justice in that person contributing towards the cost. But only when they actually earn that level of income.
They would not be repaying a debt, but making a contribution towards the help given by less well-off members of society to allow them to earn more. .
If we did hold a referendum, the large majority of the population would vote for tuition fees. Or more accurately, vote against the kind of reverse-Robin Hood redistribution that takes money from the poor to fund the better-off.
Some 31 Oxbridge colleges failed to admit a single African-Caribbean student last year, despite receiving many quality applications. It is excused on the same basis of much racism perpetuated in this country; applicants did not reach the standard required. They failed the test.
But as we all know, the real test is one of parents’ wealth, and whether they can afford to send their kids to the posh schools that appear to have a debenture on those seats of learning.
A true Liberal approach should be one based on achieving just and fair play for all, rather than in protecting the vested interests shown by many, but thankfully not all contributors.
Opposition to the policy the Coalition have enacted is not only reasonable, but is still the Lib Dem position. From the Lib Dem website, today: the Liberal Democrat party policy remains to phase out tuition fees. Doing the opposite of one’s stated intention makes people angry, and rightly so. Attempting to justify doing precisely the opposite of one’s own stated intention is liable to make matters worse. When in a hole, stop digging.
On another note, your ONS link is broken. I presume the report in question is this one?
On the face of it, the suggestion that “extrapolated over a 40-year career lifetime, graduates are likely to earn almost £1 million more than those on current average pay of some £25,000 pa” seems very dubious indeed. For evidence that this 970k number may be questionable, consider the graduate premium, the lifetime difference between non-graduate pay and graduate pay – the gross excess earned over a lifetime. Recent governments, including the Coalition, have produced statistics that flatly contradict the idea that the graduate premium is anything like a million pounds on average. In 2001, the Labour government claimed it was £400,000. Just last year, however, Willets claimed that the graduate premium was, on average, £120,000.
Yet you suggest that the gross excess earned over a lifetime, not even between graduates and non-graduates, but between someone on ‘current average pay of some 25,000pa’ and an average graduate wage, will be £970,000. As far as I can tell, your article has the honour of being the first piece on the entire internet to make this £970k claim. On the basis that extraordinary claims require extraordinary evidence, please either provide a quote from and reference to the original source for this statistic, or (if you yourself have extrapolated it from the information given), show how you arrived at this sum.
“The basic rate of income tax until the 1980s was more than 30 per cent, so a lot of 1960s graduates did pay a much higher proportion of their income to the State. ”
So then did non-graduates, the basic rate is not the area to look at. In fact as we have a progressive tax system those that earn more pay more. That’s perfectly sensible. A plumber earning 50K should not pay less than a graduate nurse earning 25K. When the plumber needs his chest drain changing he’ll probably agree. Both play crucial roles in society they just need to be trained differently.
Charging graduates more just enforces the viewpoint that a university degree is somehow better. The level of education in general is now decided by the career path that one wants to follow. We need heating engineers, builders, shop workers etc as much as we need nurses, teacher, doctors, software engineers etc. Some of these need to study to degree level, some go on to earn very good money, some earn fantastic money without going to University. My son is reading Chemistry, his earning prospects would be better, certainly in the first half of his working life, had he decided to become a policeman (the other option seriously considered) but this country needs both, neither should be penalised. He would qualify for a generous pension in the police that the private sector has no chance of matching in the current climate. If we want young people to be passionate about the careers we, in the country at large, need then don’t penalise them, and certainly don’t call them whingers.
Taxes should look not at what job you do but how much you earn. Freeing people to make a contribution to society without a further punitive tax on the method of training they need to do so is the right approach. Just the type of approach phasing tuition fees out would achieve. First we should decide what education is needed across the spectrum. And we need the correct mix to have a functioning economy. Then we fund it through taxation recouped progressively so that those that benefit from society most contribute most.
You don’t have to do to University to benefit from it, anyone treated by a Doctor has done so…
“If we did hold a referendum, the large majority of the population would vote for tuition fees. Or more accurately, vote against the kind of reverse-Robin Hood redistribution that takes money from the poor to fund the better-off. ”
Missed my point, would they pay the huge amounts we are asking current students to pay retrospectively ?
Would you?
These same people, particulalry those nearing the end of their working life have had the benefit of free education and will contribute less due to the extended working life now expected of younger workers. Younger graduates will seldom have the chance to join decent pension schemes etc, etc.
Asking someone to pay for something you would not be willing to match is pure hypocrisy….
“And revolutionise admission practices so that those who take the vocational route have a statutory right to continue their studies to degree or (more correctly) Levels 4 or 5.”
What if they’re not clever enough?
The logic behind fees is so flawed. Take an apprentice, they spend several years earning at times little money, training both in the workplace and at college and end up in a better position earning wise because of this. All good stuff and we need to embrace this.
But, employers receive funding to employ them and their college education is subsidised. You could argue that the amount of benefit to the individual is less (although take a look at the wages of a gas safe heating engineer and qualified electrician against a newly qualified teacher or nurse and the situation becomes blurred). But the logic used to penalise graduates would also work here. Younger apprentices are wholly funded by the government.
My view is that both types of continuing education need to be embraced and fully funded. People that complete either contribute massively to this country.
@daft ha’p’orth
“From the Lib Dem website, today: the Liberal Democrat party policy remains to phase out tuition fees. Doing the opposite of one’s stated intention makes people angry, and rightly so.”
Exactly. That’s why the Party needs to update its policy in this area.
I do agree with those posters who point out that comparing the earning power of those who only have GCSEs with those who are graduates doesn’t really prove anything.
However I think the key issue here is illustrated as follows::
Assume you have two people each earning (say) £40,000pa. One was state-funded to study at university and is a graduate; the other isn’t.
Isn’t it fair that the graduate should pay more in income tax (or via earnings-related student loan repayment) than the non-graduate? If not, why not?
If you think it is fair, isn’t the proposed new student finance system fairer than the old?
That will be the ONS report released on 24th August which states on page 5 that;
The earnings analysis in this article compares two estimates at different points in time and is
not aimed at showing the total return an individual may gain over their lifetime for a particular
qualification. There are a number of factors to consider when evaluating this, and more information
can be found at the following link: http://www.bis.gov.uk/assets/biscore/higher-education/docs/
r/11-973-returns-to-higher-education-qualifications.pdf
This BIS document is 119 pages long and explains just how complex a model is needed to make an accurate comparison. It shows that roughly the net benefit is in the order of £100,000 though this would be reduced if the latest ONS figures were factor in, so an order of magnitude less than that claimed. I’massuming Mr. Hunt’s degree wasn’t in mathematics or a related discipline!
What offensive nonsense in this article. As has been thoroughly established, the statistics are rubbish, comparing incomparables with each other. Just because *on average* graduates earn a certain amount, this doesn’t mean that each graduate does so, or can afford to pay back substantial mortgage-style fee amounts; those who go into caring or creative professions will not be earning as much as the average of £25,000 in many cases. (Perhaps the writer thinks it’s been a waste of time to educate these people?) On the other hand a person who without going to university has been in the right place at the right time, got a lucky break, had a popular idea, and netted a high income for themselves, is as able to pay a higher rate of tax just like a graduate on the same salary; people have different ways of getting to success. So we should have tax for the rich who can pay and not for the graduates.
The ‘you each pay for yourself’ attitude is the beginning of an entirely capitalistic society with no state provision for the highest good. What about hospitals? why should the well pay for the sick eh? If you need an expensive heart operation, take out a large debt for that, and pay it back gradually. Oh except those people aren’t likely to live long enough for you to grab the money back, hmm. Or you could pass the debt on to your family or sell your house or else if you can’t pay you can’t have the operation. Is that the kind of society you want to live in??
What this is really about is greedy baby-boomer generation who got everything provided and now don’t see why they should put anything back in; they want to keep their post-Thatcher high income sold-my-houses-at-a-profit lifestyle into their retirement, and whilst previous generations saved up for their old age, this lot have spent it all on trips round the world and consumer look-at-me goods. They don’t care that the next generation will be crippled by these student debts and by house mortgages that are 7x their salary not the 3x they were when they got in on the market. So the property goes to the rich and that’s an end to social mobility. Nice. If they were sincere about paying up for education, we should start it now with all the people who have gone to university; a graduate tax of everyone over 21 with a degree starting now I would accept and we could really raise some money quickly. But watch the middle-class baby-boomers recoil from this one!
At the same time I don’t blame the Liberal Democrats for this; it was not their policy, and I still feel they are muzzling the Tories pretty effectively in power. This is just one that they lost out on. There is no need to justify it now as if we were behind it really, we didn’t lose this one, honest!!
Mate, join the Tories yourself, have done with it, and stop embarrassing us.
@Simon Shaw
“Exactly. That’s why the Party needs to update its policy in this area.”
Hasn’t it only recently been re-affirmed, one of the reasons I’ve voted Lib Dem recently is that fact that the party sets policy not the executive. Watching Blair / Brown run roughshod over their own activists is a good lesson in why this is crucial. If the leader wants to change the policy there is a mechanism to follow, until then isn’t the true problem that many MP’s need to remind themselves of the Party rather than the Coalition policy in this area. Some MP’s, for example Julian Huppert, have reaffirmed their commitment to party policy, in fact he re-signed the pledge……
“Isn’t it fair that the graduate should pay more in income tax (or via earnings-related student loan repayment) than the non-graduate? If not, why not?”
1. The non-graduate benefits through society from graduates. For example health care professionals, CPS lawers, building surveyors, pharmacists etc.
2. We need the mix of career types for our economy to work. Could the non-graduate earn 40K without the graduates, society is too linked for this to be true in most cases. Most people on 40K need a decent level of education or further training. Their teachers were mainly graduates, without the base in life provided by them how many really achieve this level of earnings ?
3. If we make non graduate career pathways more attractive than graduate ones we will lose the chance to help students follow the best options. If all decided to follow a non degree route society would breakdown.
4. Non-graduate professions can also receive state help in the form of subsidies and help directly to employers.
5. A decent progressive tax system would already be taking a fair percentage of their wages. The system should be based on income not qualifications.
6. Where is the allowance for time spent not earning? I did a 4 year degree so had 4 years less to less to contribute to both my state and private pensions. Had I gone to University straight from school (I did my further education in the armed forces) I would have had a further 2 years for the 6th form element. Students potentially give up earnings as well as taking funding.
7. If students in my position left school at 16 and went straight into employment then there would also be the potential for another 16 year old to miss out on a job (you easily could make the assumption that the student deciding not to go to University would be more attractive GCSE grades wise than the student not academically capable of doing so). As there are a finite number of jobs then the 16 year old missing out on a job, whether the one who could have gone to Uni or the one unable to meet the academic requirements, would add to the youth unemployment problem. An 18 year old deciding not to go to University next year will be less likely to find a job than at any time in recent years. They then require help from the state, with no potential benefit to wider society.
@Steve Way
“Hasn’t it only recently been re-affirmed, one of the reasons I’ve voted Lib Dem recently is that fact that the party sets policy not the executive.”
I wasn’t aware that it had. Certainly no-one asked me whether I wanted it re-affirmed.
And sorry, I don’t find your 7-point response convincing. For example:
“1. The non-graduate benefits through society from graduates.”
But similarly, surely the graduate benefits through society from non-graduates.
So what?
@Simon Shaw
Glad to see you give such a detailed response, you want to punish those that undertake careers that require a degree, because your example is for 2 people earning the same amount. Not just those that earn the fictional 970K extra that the poor maths of the article claims (Mark Inskip give a more accurate estimate) but those that earn the same. That will be the lower end of graduate earnings, Nurses, Teacher etc.
I hope you’re honest about that on the doorstep.
@Steve Way
I really don’t understand what you are saying, Steve.
“you want to punish those that undertake careers that require a degree, because your example is for 2 people earning the same amount.”
In what way is it punishing? If someone undertakes a degree and earns substantially more than average earnings then why shouldn’t they pay back some of the cost?
Not just those that earn the fictional 970K extra that the poor maths of the article claims (Mark Inskip give a more accurate estimate) but those that earn the same.
Might have helped if you had read my first post – was it too detailed for you?
That will be the lower end of graduate earnings, Nurses, Teacher etc.
What’s the “lower end of graduate earnings”? £40,000pa? I would have thought that was close to the median, but I could be way out. What does it matter anyway?
I hope you’re honest about that on the doorstep.
Honest about what?
Simon
A levels are post-compulsary education, and confer an employment premium for those who have them over those who do not.
How much do you think A-level students should therefore be charged? They’re getting an earnings benefit courtesy of State training.
When your party finally gets a coherent system of apprenticeships and vocational training going as you claim to be trying to do (we in post-compulsary education are not holding our breath, but you never know), how much do you propose that students on these schemes should pay? They’ll be getting a careers boost courtesy of taxpayer funding, after all.
If the answer to these questions is ‘no, students should not pay’, can you explain – coherently – why it is that university students should pay a great deal of money and other people in State-funded post-compulsary education should not?
Simon, when, in 2015, the Liberal Democrats campaign, as they claim they will, for this policy to be overturned, what will you say? Will you argue that, actually, no student fees should remain, or will you stick to what I take to be your principles and continue to argue that university students (and nobody else) should pay fees for being educated?
Oh, and the median graduate salary was calculated by the ONS and released on April 6th (annoyingly the ONS have changed their site and I no longer have my link to the paper). It is currently £29,900 for graduates aged 22 to 64, and the highest paid industry is in finance where the median is £37,300.
Some of the figures cited on this thread betray a lack of understanding of this complex issue.
@Simon Shaw
You really are rude aren’t you. You seem to insult any that do not agree with you rather than debate.
Your first post was not too difficult and neither did it address the level of benefit a graduate could expect. What it did was to compare two people with EQUAL earnings, one a graduate. Had you used an example of a graduate on 40K and someone else on 30K there could have been some logic.
Therefore your more recent comment “In what way is it punishing? If someone undertakes a degree and earns substantially more than average earnings then why shouldn’t they pay back some of the cost?” does not relate to your own example.
You wish to make a person who required a degree to reach the 40K income level contribute more than one who did not require a degree but earns the same. So referring to your example you should pay more to be a graduate without actually earning more. You wish to recoup the money the state has spent enabling one person to earn 40K without considering how much the state invested to enable the other to do so.
The same theory could be applied to an apprentice. If a qualified electrician earns more than someone who didn’t benefit from a subsidised training course should they pay back some of the cost ?
If you earn substantially more than someone else you already pay proportionately more in income tax. In fact the excellent move towards a 10K base means that this is not a linear relationship but rightly increases in percentage of income terms even as a standard rate tax payer.
As to “Honest about what”, people should know when those who claim to represent a party actually disagree with its stated policy.
@Simon Shaw
Debt plus loan repayment is not a ‘tax’. If the Lib Dems had pushed through a simple, clear tax, not a system of loans and debt repayments, on ALL graduates, I would see the argument that it is, at least to some extent, ‘fair’. But they did not.
If someone undertakes a degree and earns substantially more than average earnings then why shouldn’t they pay back some of the cost?
Those who undertake degrees in the vast majority of subjects should no longer expect to earn substantially more than they would have done, had they chosen another path in life. This ‘but they benefit substantially from it’ nonsense is just that: nonsense. The substantial graduate premium is rapidly fading into history.
You claim that it is ‘fair’ for two individuals to pay different amounts of tax, based on whether or not their chosen career required them to complete a particular set of formal qualifications. I’d avoid words like ‘fair’, on the basis that fairness is a matter of personal judgement. However, I do think that it is even-handed for two individuals employed in this country to pay the same amount of tax on the same amount of income, no matter what their pathway to qualification may have been, no matter which country they studied in or whether they studied at all. The non-graduate is not paying for the graduate’s education; he is paying for the availability of a university system (both research and teaching). If he wants to make use of it, and study something at university level, he can always choose to do so later. If he does not, he still benefits from the effect that R&D has on the economy, the availability of trained professionals – doctors, lawyers, etc. – and so forth.
So:
* Why would any difference in the taxation of your two earners of £40k be ‘fair’?
* Why is the precise system put in place by the Coalition ‘fair’?
Every time I start to get enthusiastic about politics again, someone ruins it by making excuses for the 28 MPs who broke their pledge, sent us all into despair, and lost us the referendum and 100s of seats across the country last May. So yes, I’m whingeing, even though I don’t have any tuition fees to pay . Indeed the Government actually paid me to go to university.
Oh, but for all those lucky graduates who are supposedly going to make an extra million, we already have a graduate tax – it’s called higher rate income tax – and it’ll catch older, Scottish and foreign graduates, and barrow boys like Alan Sugar who certainly ought to be paying more as well. So Jonathan is right: the proposed rate of repayment for new students is unfair: that’s why the policy of our party (if not our leaders) is still to scrap it.
@Chris Riley
“If the answer to these questions is ‘no, students should not pay’, can you explain – coherently – why it is that university students should pay a great deal of money and other people in State-funded post-compulsary education should not?”
Maybe because university tuition costs more? Maybe because the financial benefits of a university degree are greater? Maybe because many of those receiving “State-funded post-compulsary education” are legally children? Maybe all three reasons – you tell me.
“Simon, when, in 2015, the Liberal Democrats campaign, as they claim they will, for this policy to be overturned, what will you say?”
I would have hoped that Lib Dem policy would be resolved by then – I’m not really sure that I understand what you mean.
“Oh, and the median graduate salary was calculated by the ONS and released on April 6th (annoyingly the ONS have changed their site and I no longer have my link to the paper). It is currently £29,900 for graduates aged 22 to 64, and the highest paid industry is in finance where the median is £37,300.”
Rather a good argument for the new student finance system over the old, I would have thought.
@daft ha’p’orth
“Those who undertake degrees in the vast majority of subjects should no longer expect to earn substantially more than they would have done, had they chosen another path in life. This ‘but they benefit substantially from it’ nonsense is just that: nonsense. The substantial graduate premium is rapidly fading into history.”
Exactly, I completely agree with you. That to me is the main reason why the new student finance system is an improvement over the old..
“You claim that it is ‘fair’ for two individuals to pay different amounts of tax”
It would have been more helpful (and fairer) if you had quoted more fully what I said which was: “Isn’t it fair that the graduate should pay more in income tax (or via earnings-related student loan repayment) than the non-graduate?”
I included reference to “income tax” because you could have a graduate tax (which I would support, and I think the NUS does, doesn’t it?), but of course we don’t have that. – although the new student finance system is obviously a lot closer to it than the old. That’s why I referred to “earnings-related student loan repayment”.
In order to earn a million more over their career a graduate would have to earn an average of 50k. A wage of 50K puts you in the top 2% of earners. Given that 25% of the population has a degree the premise of the article is clearly absurd.
One of the main problems with this botched system – and the publicity over its botched introduction – is that it deters some people from applying. Admittedly, there are some who really shouldn’t apply and some courses which shouldn’t exist – but destroying Connexions etc will hardly assist young people to make the right choices.
And when will action be taken to drag HE into the real world, offering value for money with courses completed in 2 years where approprate, instead of 3 or 4 years which are only HALF years? I read recently that the private University of Buckingham, which has always done this, is now rated very highly in comparison with bloated public sector institutions.
@Old Codger Chris
I read recently that the private University of Buckingham, which has always done this, is now rated very highly in comparison with bloated public sector institutions.
Where did you read that?
@Alistair
It was in The Independent dated 29th July.
http://www.independent.co.uk/news/education/higher/university-challenge-does-a-twoyear-degree-make-more-economic-sense-2037887.html
The irony here is that the system is actually pretty sound, and it’s the publicity which is all screwed up. Some simple facts:
1. It’s a graduate tax. Exactly what the NUS was campaigning for.
2. Poor students pay less under the new system than they did under the old.
3. All students pay less on a monthly basis, deferring more of the cost to when they are older, better paid, and better able to afford it.
4. Only rich people will ever pay £9,000. Graduates who do a 3-year degree and go on to earn a median income (by today’s standards) will pay no more than £7300. For a 4-year degree that goes down to £5,500 (that is, total repayment would be no more than £22k regardless of the length of the course, paid over a 30-year span).
As a system, it is an unambiguous and substantial improvement over the old one. Increasing the total amount paid out of the graduate tax instead of general income tax sucks, but that’s what happens when people vote for Tories – but despite the Tories, poor students sill pay less, and more people get free tuition. Lib Dem policy is still to move more of the amount to general income tax and to reduce the amount paid as graduate tax – but since Labour and the Tories are opposed to this, it’s not likely to happen when people keep voting for them. I don’t love every aspect of the new system, but I’ll settle for it as an improvement, with more still to be done in the future.
Anybody who uses this as an excuse to discourage people from going to university should be ashamed of themselves, especially if they only did it to score in a political rant.
@Andrew Suffield
“Anybody who uses this as an excuse to discourage people from going to university should be ashamed of themselves, especially if they only did it to score in a political rant”.
We can certainly agree on that. And yes – the new system will be better for some, including part-time students of course. But the hotchpotch of arrangements which universities will be required to offer students from poorer backgrounds will add a whole new dimension to the tricky business of deciding which institutions to apply for – another version of needlessly complicated means-tested Benefits.
As for English students studying in Scotland, here’s a piece from The Times Higher Education Supplement – An English student from Newcastle travelling 100 miles to study in Edinburgh could be charged £9,000 a year, whereas a Romanian student who has flown 14 times that distance will be charged the same as a Scot – that is, nothing.
And let’s not forget the massive cuts being imposed on HE institutions. The message to students and the world is that the UK – or England anyway – no longer values Higher Education. I thought we were promoting a knowledge based economy?
I wonder what the average pay differential is between people living in the south-east is compared with those living in the rest of the uk? On the basis of this logic, there should be a southerner tax, since southerners benefit financially over their lifetime from living there! Or if men earn more over their lifetimes on average than women then on this logic there should be a penis tax. Similar logic could be used to justify a suit tax or a whiteness tax or a childlessness tax…
@Andrew Suffield
My sentiments exactly.
I do think that the main thing we need to do is sort out our (Lib Dem Party) policy in this area.
Someone above said that “the Liberal Democrat party policy remains to phase out tuition fees”.
We would clearly be a complete laughing stock if we were to try to fight the next General Election with that as our policy.
“Much of the passion about betrayal felt by current students will be dissipated by……..2015”. This has to be a wildly optimistic assertion.
A new voting generation is growing up for whom two memories – of police standing by and watching looters, and LibDem betrayal over Tuition fees – will influence their voting allegiances for the next 50 years.
Jonathan, you’ve got the right idea but your implementation is wrong. Applying the statistics you found properly shows that the graduate premium is more like £100-£150k. That’s pretty much what every study on the subject has found. Nowhere near £1 million. http://anthonycooper.blogspot.com/2011/08/graduate-earnings.html
I’d like to thank Steve Way for his robust and well thought through contribution. More specifically intruiging was something Steve said earlier in the thread.
‘Anyone who has benefitted from a free education that wants to restrict this right for future generation should cough up the 27K.’
If we marry this with Jonathan Hunt’s Assertion that:
‘When looked at from that end of the telescope, it does not seem too onerous for graduates to have to repay some £30,000 or so when as a result of that investment they earn many multiples of that sum. They will still be some £970,000 better off (before tax) than non-graduates by the time they retire.’
Between these two statements we have an excellent basis for a policy idea.
Jonathan Hunt is right. It is not too onerous for a graduate that has been better off to the tune of £ 970,000 to be expected to have to repay some £30,000. But why stop at future graduates.
Why not devise a Liberal Democrat policy of something that might be called a ‘Graduate Death Duty’ (GDD). The policy should thus declare that anyone that graduated between (say) 1950 and 2005 should have to pay a death duty of £30,000 over and above any other death duty taxes.
How could they complain given the £970,000 they have enjoyed? Would it not also sweeten the blow to current students?
After all it’s a policy that would prove to future graduates that “We’re all in this together”
@John Oakes
“A new voting generation is growing up for whom two memories – of police standing by and watching looters, and LibDem betrayal over Tuition fees – will influence their voting allegiances for the next 50 years.”
Tell me, does that work with Labour as well? Are they suffering for their betrayal over Tuition Fees, and will they do so for the remaining 40 years or so – or will it be longer for them as their betrayal was greater?
Hypothecated taxation is not a good idea – as a liberal, it places too much power and financial authority in the hands of either a government, or official, or system. The only solution therefore is to either a) not hypothecate tax, and recognise the interdependency of those benefits to and from society or b) hypothecate everything, with either an authority or – in the case of degrees – an ill-informed market, determining the value of everything.
The suggestion that the degree only benefits the student is also not a good suggestion. And solvency is not the only reason to be concerned about the cost. And I presume the article should be pre-cursored by ‘assuming all other factors remain constant’. And I also presume that your older generation, those with the free degrees should now start paying more as well, as it is this generation, not the future one, that has earned so much over the course of their lives?
Oh, and finally, the excusing of lying, then going back on a pledge on the basis that ‘in 2015 everyone may have forgotten about it’ is a weak justification for lying in the first place.
I’m in favour of changing our policy.
I never had a problem with student fees, even when Tony Blair first brought them in.
Admittedly, I was first put off by the idea of being in debt, but then a fellow came in and explained how the loan system worked, how I’d only have to pay a small slice of my wage each month, and only then if I was earning a decent amount. The money to fund HE has to come from somewhere, and I think successful students can afford to make a small contribution out of their wages.
I agree that the students themselves aren’t the only ones benefiting from their education, and I think paying the full costs of up to £9,000 is steeper than ideal. I remember on Question Time once Sadiq Khan mentioned an idea where the costs are split three ways between the Government, the student and business. I personally thought that struck a reasonable balance. Not sure how it would work in practice though – what businesses would pay and how would they be made/encouraged to pay…
Thanks. Yes. We have a system in which nobody pays tuition fees when they study. However, after graduation, if their income rises above a certain level, then some people (not all people) become eligible to start paying back the cost of their tuition, at an artificially low rate of interest, not necessarily having to pay the whole sum off, and with some people never being asked to pay in the first place. I am coming round to the view that this might, after all, not necessarily be the worst possible way to fund university education.
You make a very valid point about those institutions (Oxbridge colleges, etc) that do not admit many black and minority ethnic (BME) students. We do need to make great efforts to ensure that all universities and colleges are admitting the best students, not merely the best-schooled students, and that includes efforts to ensure that BME students have the same access to opportunities as do other students.
This is a complicated challenge. At Oxford, for example, academics decide who to admit as undergraduate students. They do this after interviewing students and deciding which of the interviewees they want to spend the next three or four years teaching one-on-one in tutorials. I have never – literally never – met an Oxford academic who is racist. I cannot imagine any Oxford don of my acquaintance discriminating against BME applicants on account of their ethnicity; indeed, I would argue that many, if not most, Oxford dons are liberal academics who are less racist than is our society as a whole. This suggests that the causes of the problem are are more complex than that, meaning that solving the problem will also be complicated.
I have blogged about this at: http://www.huffingtonpost.co.uk/matthew-harris/why-we-need-more-white-ox_b_894432.html
why not make this the official lib dem party line at the next election??? the aftermath of fees will remain for years to come as it symbolises the betrayal of values that many (including myself) feel the liberal democrats have undertaken
This is probably the most unhelpful post I’ve seen at LDV – deceitful, in its derisory attempt to make graduates out to be millionaires, and self-defeating too because, having broken the party, really, over the fees issue, now some of us are trying to make graduates into some sort of greedy enemy within. Okay, well, we’ll find out soon enough how the party fares having betrayed one of its core elements.
The idea that Buckingham (first Chancellor: one Margaret Thatcher) is able to do things which apparently public universities can’t would be simply disabused were anyone to care to look at the most recent views of the Quality Assurance Agency for Higher Education on the place.
Finally, Old Codger, where’s the evidence for your views that public universities are ‘bloated’ please?
Since online media will loom large in the 2015 election all Labour will need to do is post the You Tube videos of Clegg’s pledges on fees and his “we’re different from the other parties, you can trust us” 2010 election line. I wouldn’t be surprised if the Tories do the same – they had the nerve to make a dig at Clegg and Tuition Fees in their anti-AV campaign where it wasn’t (or shouldn’t have been) of any relavance.
But the much more serious question is the future for young people leaving school now and in the next few years. Unemployment, NEETS, cutting back on advice and help available – and all that amidst the number of what we used to call Broken Homes. It’s hard to be optimistic.
@Matthew Harris
We have a system in which nobody pays tuition fees when they study.
Like the original post’s £970000 claim and Vince Cable’s ‘nobody will pay upfront fees’, your assertion is simply untrue. To pick an example – have you never heard the expression ‘ELQ’, or is it just that you don’t think ELQ students should exist, and can therefore be safely ignored? Are you aware that about a quarter of the Open University’s student population are ELQs, and that due to the Coalition’s oh-so-thoughtful reforms, the Open University has just hiked its fees from approximately £700 to £2500 per 60-point module?
Of the UK’s ELQ students, very few are eligible for the loan system. Graduate entry medicine/dentistry is a rare exception, and even they pay a proportion of fees up front. The vast majority of ELQs receive no financial support from their employers. Both Labour and Coalition policy is to spit on ELQ students from a great height, but it is the Coalition who have finally wrested the Open University out of the reach of the average ELQ student, whilst having the gall to claim that it is doing the student body a favour.
Now, putting aside the issue of ELQs:
@Old Codger Chris
the new system will be better for some, including part-time students of course.
The new system will be better for some, including some part-time students, and there is no ‘of course’ about it.
Keep in mind that part-time students are very often mature students, with family, mortgage, and debts. They are very often mid-career. There is a good chance that they will already be earning far more than £21000 in 2016 money. Their study takes an average of six years, yet they have to begin repayments after three years – half way through their undergraduate course. Oh dear… another demographic who will be paying tuition fees while they study!
Consider three imaginary first-time OU undergraduate students:
Mr Below Average Salary, single father with one child, will be paying nothing, but then, he likely wasn’t paying anything in 2011 either – he received a grant for fees, plus a modest course grant, none of which he would’ve had to repay later. He’s worse off under the new system. Mr Average Mid-Career Salary would previously have paid course fees yearly through OUSBA, but can no longer afford to do so. Depending on what happens to RPI, he may well now pay approximately the 2011 cost for an OU course, every year, for the rest of his working life. When he discusses this with his partner, they agree that as the kids grow up, they will need the money more than he needs his degree. Mr Slightly Above Average Mid-Career Salary does the maths, and finds that he would be making yearly repayments of easily twice the 2011 cost for an OU course for about a decade and a half, RPI permitting. Being a cautious man, he opts to pay the £2500/year via OUSBA, instead of using the SLC. So: which of these demographics ought to believe that the Coalition has done them a favour?
Like the parent posting of this thread, assertions about the superiority and fairness of the new system tend to be either untested, or based on what one might politely refer to as insufficient data about the sector. These glib statements (‘nobody will pay upfront fees’) are at best ill-informed and at worst, falsehoods.
(Fixed directgov link: Here)
Thanks daft ha’p’orth I stand corrected. Serves me right for swallowing the line pedalled about improved arrangements for part-timers.
Incidentally I notice that the Higher Education Policy Institute believes that the new tuition fees regime will be hugely damaging to students, the HE sector and possibly future taxpayers! http://www.timeshighereducation.co.uk/story.asp?sectioncode=26&storycode=417154&c=1
Presumably Mr Osborne (and Mr Cable) should be making university education free and encouraging more to go to university on this basis as the £930,000 extra adds up to a tidy sum for the exchequer!
The ‘industry’ (at least, Michael Arthur, head of the Russell Group) is using £100,000 as the average lifetime graduate premium (over someone leaving education at 18), taking into account the new fee levels. That’s about two grand a year if you are an average graduate. Quite a fine judgement call if you think you might be average or below…
I’m not sure what this figure is based on but as someone else here has pointed out it must either be calculated on the basis of assumptions about what has happened in the past or on the basis of assumptions about the shape of the economy over the next 50 years. I am not sure I would be hugely confident about either approach proving accurate. It is not as simple as more graduates increasing competition for the same number of graduate jobs – the economy is evolving in a way that is increasing the number of graduate jobs. The labour market is also becoming more globalised which means more UK graduate jobs are going to foreign graduates and UK graduates have more opportunities overseas.
Of course, exactly the same assumptions would have to underpin any justification for the state paying instead (in order to equip the UK labour force with the right skills for the future economy). Unless of course we think free education to the age of 21 should be universally available without worrying about why it should be so.
One other thing that I dont think anyone else picked up on: Jonathan suggests it would be fairer if the repayments were spread over a longer period. While it is true that an additional 9% tax on income over £21k is a fair old whack it is also the case that the write off period is one of the things that actually makes it fairer. If you extend the repayment period you risk lower earners having to repay more than they would if the unpaid balance is written off after 25 or 30 years.
Also, Henry, while I take your point about hypothecation the government could go a long way to solving that problem if it had the balls to liberalise the supply side, thereby making it much more like a payment for a service than a hypothecated tax.
If universities are given a monopoly over the provision of higher education and funded entirely from grants then they need pay no attention to the needs of students – instead they chase research funding because that’s how they can increase income and it has the added benefit of allowing academics to entertain themselves with research projects rather than teaching.
With fees they are partly incentivised to pay attention to students but as long as they retain that cartel and government funding is so generous that demand massively exceeds supply, many of them can still largely deprioritise teaching (look at the scores some ‘top’ universities get in the NSS for things like feedback on essays).
Target government funding better (limit it to funding foundation degress, say) and allow more competition for the provision of degrees and both students and taxpayers would get better value for their money.
Mathematics and me have lived largely separate lives for many years. But it seems to be a simple enough sum.
40 (years) X £25,000 (average earnings) totals £1,000,000. Plus 85% comes to £1.85 million.
The difficult bit is forecasting what proportion of the workforce graduates will comprise over what period, But we should deduct a modest amount for the graduates whose earnings form part of the £25,000 average wage (most non-graduates must earn much less than average wages). If we do so, the differential totals more than £1 million.
I took the lowest rate. It could be a lot higher. But made no allowance for tax and allowances, or pensions and other tax relief.
Is government really trying to suggest that intelligent people go through three years of hard, unpaid study (and now incur large bills as well) just to earn an additional £100,000 — or fifty quid a week on average over 40 years?
The last figure I saw comparing career salaries of graduates against those obtaining just A level passes (the end of free education) are more than a dozen years old. But then they showed a career lifetime differential of some £600,000.
It emerged at the same time as a serious study showing that most of the jobs taken by the new wave of graduates had previously been done by those with A levels only. But it said the work was probably of greater complexity.
Perhaps those more numerate colleagues can tell me where I went wrong.
If I am correct, I can see no reason why students should not, in the course of time when their earning power is much higher, make a modest contribution through higher income tax or repayments, or taxing their mansions. But I have no great desire to punish them for the sake of it.
Some people seem to be suggesting they should be subsidised by those earning much less. That would indicate Tory infiltration of the Lib Dems has gone too far.
However we remain a party that believes in redistribution of wealth as well as power, taking from those who have and giving to them wot haven’t.
That could mean you.
But I still believe there are good arguments for saying the State should invest in the brains and talents of its people, both those taking academic and vocational routes, if we are to narrow the skills gap and compete in the knowledge economy. The question remains how much.
http://www.civitas.org.uk/wordpress/2011/05/12/the-value-of-a-university-education-it%E2%80%99s-a-question-of-degree/
“Is government really trying to suggest that intelligent people go through three years of hard, unpaid study (and now incur large bills as well) just to earn an additional £100,000 — or fifty quid a week on average over 40 years?”
In short, Yes. There is a document linked to above from Vince Cables department that shows the mean figure to be £108,000. Obviously some will earn more (and some less) but that is the current figure calculated by the Government. I’ve repeated the link below, look at key finding at the bottom of page 12.
http://www.bis.gov.uk/assets/biscore/higher-education/docs/r/11-973-returns-to-higher-education-qualifications.pdf
“Some people seem to be suggesting they should be subsidised by those earning much less. That would indicate Tory infiltration of the Lib Dems has gone too far.”
Not true, if you earn more you pay more tax, higher earners therefore subsidise the needs of the less well off and rightly so. Also how would someone on a lower income be subsidising a student? That is pure Liebour and Tory propaganda to justify their ideological approach to fees. The link below (OK from the Torygraph so there is bias in their editorial slant but not the facts) show that the level of government expenditure last year was £8,588 per head in England.
http://www.telegraph.co.uk/news/politics/8730055/Government-spending-gap-between-England-and-Scotland-widens.html
Using last years tax figures someone on 20K with no special allowances or pension deductions would pay £4275.80 in tax and national insurance. They are also more likely to benefit (rightly so) from tax credits and other allowances. Even taking account Blair and Browns stealth taxes you need to be earning a decent wage before you start to pay more than 8.5K to the government.
OK I’ve vastly simplified the complexity of our tax system, fuel, VAT etc will play a part but the figures still mean that only the better off are subsidising society. I’m a higher rate tax payer and am quite content that the amount I pay is linked not to the services I use (or have used) but how much I earn.
“However we remain a party that believes in redistribution of wealth as well as power, taking from those who have and giving to them wot haven’t. ”
Then stick to income tax, and pursue the other wealth tax measures the Tories are so scared of. Society benefits from Universities, let society pay with a progressive tax policy that takes more from those that have more wealth whatever their education, not proportionately more from those that have a degree and are moderately paid.
Education should be funded, in my opinion and the official line of the party, up to the end of the first degree. After the last manifesto and the disaster of the pledge, if the leadership state within this parliament that the deviation from that is for ideological rather than financial / coalition reasons they will rightly assume the mantel of hypocrites.
@Steve Way
Very well said.
The ‘argument’ that low-paid non-graduates subsidise graduates is a disgraceful lie (as the opposite is the actually the case).
@Steve Way
“let society pay with a progressive tax policy that takes more from those that have more wealth whatever their education, not proportionately more from those that have a degree and are moderately paid.”
But the point is that those “that have a degree and are moderately paid” do not pay proportionately more. That’s why the new system is better than the old.
“Education should be funded, in my opinion and the official line of the party, up to the end of the first degree.”
Of course it’s still part funded, but assuming you mean 100% funded then If that still is the official line of the Party, it clearly needs to be amended before the next General Election.
@Simon Shaw
“But the point is that those “that have a degree and are moderately paid” do not pay proportionately more. That’s why the new system is better than the old.”
They pay proportionately more than those who earn the same without a degree, therefore it is a tax based not on earnings or wealth but on the services used.
“If that still is the official line of the Party, it clearly needs to be amended before the next General Election.”
Why ? The leadership have stated that had they won outright power they would still have scraped fees and that the inability to do so is purely due to the coalition. They are yet to say they ideologically believe in fees, to do so would make a mockery of just about every major speech and contribution commons debate on the issue since Labour first broke their pledge. They can and should note what they would do in a coalition and they certainly should never again make personal pledges that turn them into liars.
However, we are told that the economic situation will be better at the next election than the last. We are also assured that the policies presented at the last were fully costed so surely the need for change in the policies to be persued in the (sadly) unlikely event of an outright victory is not apparent.
@Steve Way
“They pay proportionately more than those who earn the same without a degree, therefore it is a tax based not on earnings or wealth but on the services used.”
Depends what you mean by “moderately paid” – obviously you mean something different to what I and most people mean.
“”If that still is the official line of the Party, it clearly needs to be amended before the next General Election.”
Why ?”
Simple – because to do anything else would leave the Party as a complete laughing stock.
It would probably cost upwards of £10billion a year to completely scrap tuition fees, that is to give middle class kids 3 years free at a university. I agree it would be a farce to go into the next election with that as a spending priority.
Breaking the NUS pledge was a mind-blowing act of political suicide by the Lib Dems. The lesson to take from it is not to make promises to the electorate that you dont intend to keep. The lesson is not that you should resurect a bad policy.
@Simon Shaw
“Depends what you mean by “moderately paid” – obviously you mean something different to what I and most people mean.”
21K is a moderate wage in my opinion and that’s where they start to pay more than a non graduate.
“Simple – because to do anything else would leave the Party as a complete laughing stock.”
As opposed to saying that the ideological opposition to tuition fees that the party has held since they were introduced was wrong?
@Ed Maxfield
It would probably cost upwards of £10billion a year to completely scrap tuition fees, that is to give middle class kids 3 years free at a university.
Is this now about class, I grew up in a council house and my parents were a painter and a cleaner. I’m not sure that that would qualify me for middle class. How about thinking about £10 Billion pounds to educate the next generation of surgeons, engineers, nurses etc. Some of whom will go on to pay more tax than most of us, but some will have a moderate income but provide absolutely essential services.
Whilst I agree it may not be a priority it must be at least an aspiration. After all LibDems are in a coalition that will be spending much more ensuring we still have the capability to destroy millions of lives at the touch of a button…..
@Ed Maxfield
“It would probably cost upwards of £10billion a year to completely scrap tuition fees, that is to give middle class kids 3 years free at a university.”
Steve Way has already eloquently shown your argument up for what it is, so I’ll just point out, in addition, that the number of votes lost (from those that aspire to go to university, believe in meritocracy, believe in our future wealth prospects) is far greater than the number of economically illiterate knee-jerk right-wingers with a chip on their shoulder about anyone that tries to better themselves that will now chose to vote Lib Dem on the basis of such vindictiveness.
(The increase in) tuition fees is a way of kicking a portion of the national debt down the road and placing the burden of payment on to future generations; future generations that work hard in order to aspire to a better life and who give more back to society.
It’s not about class, Steve, its about priorities. I would rather the party had a more targeted approach that helped people who couldnt afford to pay get the education they need from the most appropriate supplier.
@Steve Way
““Simple – because to do anything else would leave the Party as a complete laughing stock.”
As opposed to saying that the ideological opposition to tuition fees that the party has held since they were introduced was wrong?”
I don’t follow you. There could clearly be more than one reason.
Or are you suggesting the Party wouldn’t be a laughing stock if it kept to the previous policy? Is that what you want?
@Ed Maxfield
Sorry to be picky but it was you that mentioned class when clearly the benefits of free education are not linked to the middle class. Targeting income groups within the fees system is another myth I’m afraid. If repayments are linked to the students future earnings then their current circumstances should not matter. Otherwise the council house kid who ends up as a consultant surgeon on £150K + will pay less than the kid from a more afluent background who becomes a junior sister on £32K.
The help for those less well off should be loaded earlier in the education system and at University level should be in the provision of maintenance support not fees. For example I am able to support my son at University by paying towards his rent, less fortunate parents would struggle to do so. If fees are to apply and are to be repaid according to earnings there is no justification for allowances.
@Simon Shaw
“I don’t follow you. There could clearly be more than one reason.”
Where they would be a laughing stock is if they suddenly start agreeing with the principle of fees and stating (as some here have) that it is fair for students to have to repay them. The party position consistently has been fees are unfair and that the state should look to fund education. At every chance Lib Dem cabinet ministers have informed us that they would have preferred to phase fees out but the realities of coalition have made it impossible. They became liars over the pledge, nothing can change that, it was stupid to sign it but once done they should have kept to it. Their one defence was that breaking it was a reality of coalition not a principled position in favour of fees.
Labour were rightly derided by senior Lib Dems when they introduced and then extended fees, the arguments used then are no different from the ones I have used on this thread. Earlier you asked whether Labour will also be punished, I believe that for some people fees would have been the issue that drove them away from Labour, for others it was Iraq or the authoritarian stance to security more still the scandals that wracked them.
The Lib Dems will be punished for tuition fees by some who will withhold their vote or worse vote for another party. Others are bitterly disappointed but willing to see the betrayal as a necessary requirement of a coalition that was in the best interests of the country. If the principle of fees is accepted rather than the necessity of them then the second group of voters will also be potentially lost.
@Steve Way
I actually asked “Or are you suggesting the Party wouldn’t be a laughing stock if it kept to the previous policy?”
You haven’t really answered that question. Are you saying you think there are greater dangers in the Party deciding the policy needs changing, rather than fighting the next General Election on a student tuition policy which:
1. We used to be in favour of, but
2. We (are seen to have) voted against when our votes in Parliament “could have swung the vote”, but
3. We are now back in favour of (in 2015)?
I was using middle class as short-hand. Apologies if that wasnt clear.
I agree it is important to target the money at education before 18 which is precisely one of the reasons why I think paying 10bn or whatever to scrap fees would be a huge waste of money.
Targetted maintenance to cover living costs is also potentially a reasonable priority but it does lead on to the other concern that I have tried to set out here: the danger that ‘going to university’ is treated as the same thing as ‘getting a higher education qualification’. Too much of the structure of current policy (and even more of the old system) is built around that confusion. Policies that enable people to obtain the right education for their needs should be the priority, not shoe horning a mass education system into a medaeival delivery system.
@Simon Shaw
The answer to your question involves a question in itself, will the party win a majority at the next election?
That question is, does the party believe in fees or not ?
Surely the policies of the manifesto can only be based upon a Lib Dem majority. Personally I believe parties should also be clear about their red lines in any future coalition, like many I expected a coalition but felt that a personally signed pledges by every Lib Dem candidate pretty much made fees a red line.
If you’re a realist and believe the best possible result at the next election is another coalition with either of the other main parties then this matters not so much on the practical level as the ideological one. The manifesto in 2015 should not contain only those policies that can be achieved in coalition, it should also show what could be achieved in a majority government.
Coalitions may be horribly practical most of the time but people need to know the convictions of those they vote for. I supported the coalition, it was the only realistic choice for a stable government and I have never expected Lib Dems to get all their policies through in any coalition. I have disagreed with many of the policies that have been inacted but totally supported others. That is the reality of coalition.
The cardinal sin of the fees issue is not the payroll vote allowing the bill to pass, but the fact that they broke personal pledges to do so. People who voted for those MP’s should have been able to expect those promises to be kept. This has led to us not blaming the Tories for the fees issue but in blaming those who broke their pledge.
We all wanted (I assume) a bigger rise in capital gains tax than was in the budget. We don’t blame the Lib Dem MP’s for that, without their pressure there would have been no rise. The Lib Dem’s forced the Tories to accept this and whilst we wanted more we accept it as a small victory. It was a reality of coalition, and it doesn’t mean the Party policy needs to change to reflect the modest rise obtained. At the next election I hope to see a manifesto call for a bigger rise. We all wanted a mansion tax, we don’t blame the Lib Dems for not getting one (and that battle is not over yet). Future policies do not have to be dictated by coalition compromises.
If what you allude to is that the party should accept that an outright victory is unlikely but state that it will work to reduce fees / make the repayment systems fairer in the result of a coalition then that is not inconsistent with wanting to scrap them. If however you mean that the party should wholeheartedly support the current system, I think that is where ridicule lies.
I believe in free education to first degre level for all academically suited to undertake it. It was a factor in voting Lib Dem as it was for many others. It wasn’t the only or even the major factor for me, but if the party decides ideologically it no longer supports this than it will be one less reason to put my x in the box in 2015.
Sorry thes econd para should start the next quesiton is…
So Jonathan Hunt thinks my degree was an automatic passport to a million and therefore I shouldn’t complain about student loans?
In 22 years as a senior engineer working for an multinational in a cutting edge industry, my salary was never higher than the national average. And at 22 years it stopped dead, because disability means I’m now considered too unfit to work. For 20 of those 22 years disability impacted negatively on my earning potential, before destroying it entirely.
Maybe a little more thought before being quite so sweeping in the assumptions? A lot of people get through university with disabilities that will significantly limit their earning potential throughout their working life, more will develop disabilities after graduation that means their earning potential is compromised in ways they never imagined, and all will face rampant discrimination in the recruitment market.
And next April, unless Lib-Dems vote to stop it (there’s a motion before conference), my ESA, the benefit that recognises I am too disabled to work, no matter that I will still be too disabled to work, will be stopped by time-limiting until such time as what little pension and savings I’ve built up have been swallowed by forcing me to survive on them without entitlement to any benefit, a prospect DWP expects to affect 700,000 disabled people between April 2012 and 2016. Chris Grayling admits this is a cut for cuttings sake, and it will be something the Lib Dems are smeared with, because Grayling is already using Steve Webb to take the flak directed at DWP over ESA by the Work and Pensions Select Committee, and which Dame Anne Begg promises to have her committee readdress during the new term, see: http://www.candocango.com/minister’s-response-on-work-test-figures-unsatisfactory-says-dame-anne/
@Steve Way
“The answer to your question involves a question in itself, will the party win a majority at the next election?”
No it doesn’t! I’ve made it very clear that what I am talking about is the policy on which the Party campaigns at the next General Election – so that’s before any party “wins a majority at the next election”.
Just to repeat my question (which I thought was fairly straightforward):
Are you saying you think there are greater dangers in the Party deciding the policy needs changing, rather than fighting the next General Election on a student tuition policy which:
1. We used to be in favour of, but
2. We (are seen to have) voted against when our votes in Parliament “could have swung the vote”, but
3. We are now back in favour of (in 2015)?
David G
“So Jonathan Hunt thinks my degree was an automatic passport to a million and therefore I shouldn’t complain about student loans?
In 22 years as a senior engineer working for an multinational in a cutting edge industry, my salary was never higher than the national average.”
Would I be right in thinking, therefore, that your repayments under the new system would have been lower than they would have been under the present system? I’m not saying that you like either system, it’s just that the new system is fairer to graduates with earnings at the sort of level you have referred to.
@Simon Shaw
Again the rude bit, ok in the same vain and in answer to your questions
1. Show me where the leadership or the party have dropped the policy. If you cannot do so, you cannot state they used to be in favour of it. Every statement I have seen to date states the scrapping of fees is still Lib Dem policy.
2. When did anyone vote against scrapping fees. It wasn’t an option. In the aftermath of the vote the party line was that it was the best deal available as wthout a majority fees couldn’t be scrapped.
3. Can’t really answer it as to date the party has never stopped being in favour of scrapping fees.
Now you answer a question or two.
1. Are you in favour of fees ?
2. If yes, have you always been in favour of fees or just since the election ?
If the party leadership are telling the truth they still support the scrapping of fees should a Lib dem majority be achieved. If that is the case why change the policy ?
@Steve Way
How does this “rude bit” work, Steve? Is it that you are allowed to be rude but no-one else?
If I may now be blunt with you: you clearly have difficulty understanding what I am saying. I didn’t ask you three questions. I asked you one question.
In relation to your two questions:
1. Yes, although I share the NUS’ view of preferring a Graduate Tax (which the new student finance system is closer to than the old one).
2. I’m not sure – it wasn’t somthing I had personally given much thought to. I certainly was strongly against the old (i.e. present) student finance system for particular reasons.
@Simon Shaw
“How does this “rude bit” work, Steve? Is it that you are allowed to be rude but no-one else?”
No Simon, I’ve not been rude to you until your little barbed comments. The point of answering the three points was that it meant he basic premis of your question is incorrect. How can I answer a question with three points that are wrong. The leadership have not dropped the policy, they never had the opportunity to vote against their own policy and therefore they cannot “be back in favour” of it. Try some points that bear a semblence to the situation we are actually in and I might be able to give an answer.
As far as I can see I am in line with the stated policy of the party I voted for at the last election. I don’t appear to be alone in this, in fact earlier this year the Voice did a members survey…
https://www.libdemvoice.org/tuition-fees-what-lib-dem-members-think-now-3-of-3-22718.html
@Simon Shaw “the new system is fairer to graduates with earnings at the sort of level you have referred to.”
I was lucky enough to graduate under the grant system. If I had graduated under either the old or new loan systems, then the loan would have swallowed a huge chunk of my earnings during those two decades, leaving me in considerable debt wrt my mortgage when I became unable to work due to disability. Without the albatross of loan repayments around my neck I was able to drive down my mortgage while I was working to the point that when I became unable to work it was merely a financial disaster rather than a financial catastrophe. However you shape it, the loan system is an additional financial millstone that people have to face while in work. If I was looking at higher education, knowing that disability might compromise my earning capacity, then that additional financial commitment would be enough to make me thing again, and I know this for a fact because over the past several years I have considered and ultimately rejected post-graduate study, the financial benefits simply do not outweigh the potential financial consequences knowing the overwhelming attitude of recruiters towards disabled candidates.
Advocates seem only to be looking at the direct effects of loans in the simplest of cases, they’re steering clear of the consequences of knock-on effects from the additional financial commitment for people with more complex situations. There’s a very real threat of minority groups such as disabled people being multiply disadvantaged to the point of being driven out of the university catchment by complex effects that weren’t considered.
@Steve Way
“No Simon, I’ve not been rude to you until your little barbed comments.”
Well you have, actually, and to other people as well.
I wouldn’t normally have voiced any criticism of you, but if you insist on criticising others I would point out that you appear to have forgotten the following earlier comments of yours:
“What a ridiculous comparison.”
“Anyone not willing to do so is a hypocrite”
“Glad to see you give such a detailed response” (aimed at me and meant sarcastically)
The only things I said to you before your first objection that could be regarded as anything like “rude” were the following:
“And sorry, I don’t find your 7-point response convincing. For example………”
“I really don’t understand what you are saying, Steve.”
“Might have helped if you had read my first post – was it too detailed for you?” (which was meant as an allusion to your third comment above)
It’s all rather a case of pots and black kettles.
David G
“I was lucky enough to graduate under the grant system. If I had graduated under either the old or new loan systems, then the loan would have swallowed a huge chunk of my earnings during those two decades”
I understand what you are saying, David, but I think you are missing my point.
I said this: “the new system is fairer to graduates with earnings at the sort of level you have referred to.”
By that I meant people earning around (say0 £18,000 to £24,000 pa – this was having regard to your comment; “In 22 years as a senior engineer working for an multinational in a cutting edge industry, my salary was never higher than the national average.”
What I am saying is that under the new system the loan would not have swallowed up a huge chunk your earnings. In contrast under the old loan system it would have done so. I do appreciate, of couse, that under the grant system you paid nothing – but then, neither did high earning corporate lawyers etc.
Under the new system low paid graduates pay less, and well paid graduates pay more. I happen to think that is a real improvement but it seems that not eaveryone agrees.
Simon, I’m not missing your point, just not giving it any value. I’m sorry if that sounds harsh, but whether you lumber people with repayments of X, or more than X, that is still a financial commitment they are facing that they didn’t face under the grant system, and it will force some people into an evaluation that university is not for them, and then we all lose.
And the people most likely to be affected by this will be disproportionately those from minorities such as disabled people.
Looking at my own situation and how it would fair under the revised loan scheme, if we assume I was on current average salary throughout my employment, and it didn’t vary much, then 22 years @ 9% of 4000 (25K minus the 21K threshold), would have cost me £7920. Not much you might argue when considered on a weekly basis, but however you look at it that’s £7920 that wouldn’t have been available to pay down my mortgage, £7,920 of extra debt hanging over me at the point I became unable to work. The loan system may suspend its own payment when your salary drops below the threshold, but it doesn’t suspend payments on debts you have incurred, or not paid off, because of the money going into student loan repayments, and when you’re looking at a future surviving on less than £100/wk indefinitely, then that’s a huge amount of money.
“I do appreciate, of couse, that under the grant system you paid nothing – but then, neither did high earning corporate lawyers etc.”
So because they are able to pay, I must too? Sorry, doesn’t make me feel any better about the situation.
@Simon Shaw
“Under the new system low paid graduates pay less, and well paid graduates pay more. I happen to think that is a real improvement but it seems that not eaveryone agrees.”
That’s simply not true. High earning graduates will pay less (over their lifetime) than those on middle incomes. Not just less as a proportion of their incomes, but less money, given they will have paid off the fees earlier and incurred less interest. Their are some figures on the Money Saving Expert website if you’re interested in finding out about it. Under the previous funding system, HE was funded through general taxation (which is mostly progressive, as oppossed to the regressive fees), which means that corporate lawyers will now be contributing less towards the funding of their own education than they did under the previous system.
Those are the facts. The fact that you cherry-picked a narrow band of incomes between 21k (in 2016’s money) and middle incomes where tuition fees are progressive, doesn’t mean that corporate lawyers pay more – the reality is quite the opposite when you look at the amounts paid across ALL income deciles.
“What I am saying is that under the new system the loan would not have swallowed up a huge chunk your earnings.”
Engineers/Scientists typically earn £25k-£40k per annum. These are the income groups that are hit the hardest under the new fees system. The coroporate lawyer (presumably earning much more) will pay much less as a proportion of their income over their lifetime and less money (given they will repay early).
I’ve repeatede the fact that tuition fees are regressive probably 100 times on this website. I am right, and I find it hard to believe that you haven’t read any of my posts, Simon.
@Simon Shaw
Please show where I have been rude to an individual (as you tend to) rather than disagree with a point.
1. I never called you or ayone posting on here a hypocrite, I stated that if people with degrees (including myself) wanted to charge the younger generation then they are hypocrites if unwilling to pay themselves. The graduate premium was far higher for my generation and higher still for those now approaching retirement, if the benefit is higher to older graduates surely the cost should be too.
2. Stating that a comparison is ridiculous is not insulting the person who made it merely pointing out my opinion of the comparison. Saying someone was stupid for not comparing degrees with the highest level of non self funding education (for example an FE Diploma) would be insulting them.
3. “Glad to see you give such a detailed response”. Well if you ask, as you did, for reasons why something is not fair, then you should address the substance of the response. For example, you have not addressed why one form of government subsidised training should be paid back and not others.
And as if to prove point 3 you still haven’t addressed the fact that your question (which you rightly state I haven’t answered) relied on three contentions that are not true.
I seem to have lit some blue (or perhaps yellow) touch paper, and retired. Hope it is safe to venture back again.
It has been an excellent debate, and thanks to those who have answered most of the,points raised.
It would be difficult for the party to return to its previous position. Far better to accept that tuition fees are here to stay, in Britain as in most countries, but spend more on making them more palatable.
This could include cutting or severely reducing the interest payments, extending the repayment time, and making life easier for those from deprived backgrounds.
Of course, David G and others in his situation should no longer be troubled by a need to repay. And to be really radical, those at FE colleges should enjoy similar benefits.
We must also encourage more to learn practical skills through apprenticeships, then going on to academic underpinning at universities. Perhaps we should go as far as saying that all universities should reserve a certain proportion, say 25 per cent, of places for people taking that vocational route and gaining good passes at Level 3..
That, after all, is how the factory (remember them?) director in Germany and our other main competitors learns how to run efficient and profitable companies. Such is the entrenched arrogance of academics and universities that supposed parity of esteem is little more than a pious daydream.
* Incidentally, requiring one-time students who got it all for free to repay their grants would, sadly, raise little, given the ravages of inflation over the last 30-40 years or so.
David G’s point about ESA and Steve Way’s point about Trident illustrate – together with the Fees issue and cuts in other areas – exactly who is paying for defecit reduction.
Clearly we’re all in this together, accepting that the definition of all does not extend to failed bankers, the MG Rover Phoenix spivs, the consultants behind Labour’s NHS computerisation, the ex ministers who walk straight into private sector jobs, a certain former Prime Minister etc etc.
You don’t have to be a rioter to have lost all faith in people who are supposed to be leading us and who are paid shed loads more money than the senior public servants, ministers and captains of industry of times gone by.
To answer the question that was asked of me above: No, I had never previously heard the expression ELQ. I just looked it up. Equivalent or Lower Qualification. I’m sorry, but I know nothing about the technicalities of funding for such qualifications and the internet leaves me little wiser. If someone wants to write a piece on it – e.g. for Lib Dem Voice – I’ll be very pleased to read it and become better informed.