The BBC reports:
A senior Lib Dem who abstained from the vote on tuition fees has been appointed by the government to help encourage poorer teenagers to go to university.
Simon Hughes was among Lib Dems to raise concerns about a hike in the cap on university tuition fees in England.
David Cameron and Nick Clegg said it would be a tragedy if youths were put off applying due to “misinformation”.
Labour said the appointment was “window dressing” and showed they were worried students would be put off by the rise.
The Lib Dem deputy leader has been appointed to the unpaid, six-month role as the government’s “advocate for access to education”, in which he will go into schools to address the concerns of poorer teenagers and work with them on campaigns to persuade as many as possible to consider higher education.
He will also contribute to work on finding a suitable replacement for the educational maintenance allowance – which gives low-income 16-19 year olds up to £30 a week to help them continue in full time education…
He told the World at One: “I’m very clear that the decision in Parliament has been made and the job of all of us across parties is to make sure we maximise the opportunities for young people of all backgrounds… to go to further education colleges and university.”
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100 Comments
How many schools and colleges does he expect to visit in six months on an unpaid basis?
I’ve spent a lot of time discussing tuition fees with friends and relatives over the past couple of weeks and it’s clear that even people with a direct interest in the issue (e.g. 16-17 year olds and their parents) have not yet got their head around how the system will work and what it means for them personally. I’ve found that explaining the detail has gone a long way towards assuaging their personal concerns.
Radio 4’s “More or Less” (statistics programme hosted by Tim Harford, FT’s ‘undercover economist’) recently produced an excellent analysis of how the new system will work in practice; we need more information like this to enable people to make properly informed decisions about what tuition fees will mean for them. I’m delighted to see Simon rolling up his sleeves and getting on with the job!
@Dinti Batstone
Have you any idea how patronising you sound? People understand a lot more than you give them credit for. As a parent I undestand that tripling student fee and abolishing EMA will make it much less likely for my children to continue in education. It makes it less likely that social mobility will be invreased and it makes it more likely that Britain will become a low wage low skill economy. Welcome to 2011 the year of the return of mass unemployment and trebling student fees. At least the government will have a little rest before they start dismantling the NHS
The new appointment of Simon Hughes to the role of `Advocate for access to Education’, charged with visits to schools and colleges, is exactly what is required to gain policy clarity and the max take -up of places in centres of higher education, for the least off teenagers and mature students.
This is the Cameron way. Drag potential opponents inside your big tent. Make seemingly generous concessions around the fringes of policy. Tell Simon Hughes he can have a tough choice: he can either gain some influence and make the policy a little bit less bad than it would otherwise have been, or else he can cut off his nose to spite his face and walk away.
Make no concessions whatsoever on core principles. Fees must not just rise, they must triple. Government funding for university tuition must not just be cut back, it must be decimated. Lib Dem rebels must not just lose, they must be humiliated.
With Simon Hughes as the figurehead, it’s full steam ahead for Cameron’s boat. University privatisation, here we come!
Why is Simon Huges (who I have had a lot of time for in the past) acting as an unpaid promotional salesman for overpriced university courses .Why is he trying to persude young people that it is good to saddle themselves with tems of thousands of pounds of debt designed to be paid back over 30 years on a 40% rate of marginal tax .
Is the Coalition saying that young peoples are too stupid to judge these things for themselves or is it just another publicity stunt to try to tell people that bad vindictive policy is somehow good.
Simon came within a hairs breath of voting against and is now a policy cheerleader …how very very bizarre.
I can’t decide if this is just a poisoned chalice for Simon Hughes, or an attempt to implicate him in the whole tuition fees train wreck. If only he’d summoned up the courage to vote against the tuition fees plan rather than just abstain!
The minutiae of the proposed “new” tuition fees system, however well presented, will not divert attention from the fact that the party has been seriously undermined by the volte face. People do not forget or take kindly to such ideological gymnastics. The new system may have been made “more progressive” (less regressive?) but it is still wrong in principle. That’s what people will remember.
@Ian Butler
I’m sorry you found my comment patronising, it certainly wasn’t intended to be. I just related my experience of discussing the issue with friends and relatives over the past couple of weeks. People I’ve spoken to are well aware of the headline increase, but not so aware of the detail of how the policy would actually affect them/ their children in practice, ie the various graduate income levels at which repayments kick in and total amount repayable before debt is written off after 30 years. The Radio 4 programme made this crystal clear, which is why I mention it. I heard it purely by chance so am not claiming special insight or expertise!
Nobody is happy about this increase, but the key priority now should be to ensure that potentially life-changing decisions are based on accurate information, not tabloid headlines.
““I’m very clear that the decision in Parliament has been made”
Only because those like him did not keep their promise to voters. The simple fact is that fees could not have been trebled had everyone who signed the pledge voted against. Parliament has spoken, and in doing so has proven how flimsy our democracy really is, promises last only until the ballot box closes. It is unfortunate that the likes of Hughes has only lost his integrity and not his seat. And I say that as someone who always previously supported him.
@Dina Batstone
” I’ve found that explaining the detail has gone a long way towards assuaging their personal concerns.”
I’ve found that they understand that they will have to repay more if they do reasonably well after graduating. I’ve also found they feel betrayed by a party that has done the polar opposite of the promises they made to the electorate. Also the full details are not actually finalised.
My son is an undergrad and he and most of his fellow students feel lied to. they don’t need further explanation promises were broken by the party of “no more broken promises”. Ministers have admitted voting for a policy they disagree with.
David Allen is spot on. Cameron has pulled Hughes into the fray to stop him being a force against the plans. I wonder if this was discussed prior to his abstention. I look forward to him continually having to explain why he didn’t keep his word.
Well let’s hope that we actually are supplied with the details of the policy that are still missing so that an informed judgement can be made
However, the LibDems either still haven’t got it or are deliberately ignoring the fact that the Tory-led coalition is in the process of opening up our unis for privatisation by starving them of government funds for teaching and basically shiftting that shortfall onto consumers in the shape of students and their families.
This is another very dangerous experiment and if it fails we will see unis close and courses cancelled and quality may not be the issue driving it but rather student numbers. The LibDems have got totally caught-up in the detail of attempting to create a more progressive loan repayment system rather than questioning the policy of seriously cutting government funding of universisties.
I also still haven’t been able to work-out whether students earning under the threshold at which loan repayments begin are actually faced with the loan increasing through interest charges being applied so the amount owed increases. Obviously the artificially low current level of interest rates will not last for ever so the effect of interest being added year-on-year could significantly increase the amount owed.
I am also unclear as to whether the 30 year period for scrapping the debt starts when someone leaves uni, even though they don’t make the threshold level, or whether it only starts when payments actually start to be made.
There is just so much missing detail and perhaps one of the biggest bits of the jigsaw is the definition of ‘exceptional circumstances’ to justify a fee level above the £6K cap. That is an important one but even at this stage we don’t have it and I really wonder whether the Russell Group will water it down totally.
Just watched Hughes on telly news and I’m reassured to hear he still supports LibDem party policy on tuition fees – I wonder what the voting public will make of that – poacher turned gamekeeper springs to this cynical old mind 🙂
Another aspect of this to bear in mind is that one of the arguments in favour of this method of funding education being fairer is probably flawed. We keep being told that it is right for graduates to pay towards their education, as they will earn considerably more over their working lifetimes than non-graduates.
Whilst this may be true, has it occurred to those pedalling this line that the situation today when many more young people go to universities and gain degrees is MUCH different from that in the past when only 5% of people went to universities. Who can actually say what the differential will be in the long term for the current cadre of graduates?
@ian butler
It may be a cheap shot but if you understand the changes then why do you not understand that fees have not been “trippled”? I’m currently a student and I would probably prefer to be a student under the new system than the current one. I still oppose it though as being unnecessary and deceitful but to say that fees will be tripled is just plain wrong.
@ George
That sounds like damning with faint praise George! Aspects of the “new” scheme may be better, but the policy as a whole is flawed, so don’t expect people to give the LD’s too much credit for putting lipstick on a pig.
My guess is that Simon Wright is being brought in because Nick Clegg needs help. He was at his wit’s end before the holidays, and he will have other things to do after he gets back. Cable is obviously no good at communicating.
Simon Wright is the right person for the task. Let us wish him well!
@EcoJon
I recall that we talked about this earlier, or may be I am imagining! Below the threshold, the real interest charged is 0. So, no interest is accrued. However, note the term “real interest”. That means that the loan balance still goes up with inflation (RPI).
I see many people claim that they perfectly well understand how the new system works, but then they say things that imply quite the opposite.
The graduate payments are limited to 9% of the income above 21K for 30 years. They are exactly the same whether the graduate is from a poor background or a well-off background. They are the same whether the graduate studied £6,000 course or a £9,000 course. They are also the same irrespective of whether the student borrowed just the tuition fees or living costs to the maximum limit.
If you truly understand the system, then you would understand that they represent a really good deal for the poorer kids. They get to borrow the maximum amount, but they won’t have to repay any more than the other kids.
None of us likes the fact the tuition fees have gone up. But it would be a mistake to assume that the Government has left you in the lurch.
I understand the financial implications for my 15-year-old daughter only too well.
If she decides to go to a top university it could cost her up to £27k in tuition fees alone (plus up to £15k in living costs) plus interest at a penal rate depending on how long it takes her to pay it back.
That is nearly £20k more than her elder sister who is already at university, so £20k is what each of the Lib Dem MPs who voted for this measure have cost me personally.
(And Tory MPs as well of course, but we always knew they wouldn’t be too fussed – after all they have always believed in paying for private education and £9k is less than a term’s fees at Eton.)
I say me personally because as a true Lib Dem I still believe that students should not have to pay tuition fees and that I need to do something about it. I don’t want my daughter to be put off by the cost, or face penal rates of interest, or do something silly like waiting until she is 51 (and the loan is written off) before getting a proper job.
The more gimmicky features we add to the system the more opportunities it creates for gaming: I could quit my job so my daughter qualifies to have two years’ tuition fees paid, or I could move to Wales or Scotland.
However, I will probably do the most straightforward thing and cash in my personal pension to pay her tuition fees. The state will look after me, won’t it?
As I believe that students should not be subject to tuition fees, I will either have to cash in my personal pension or take out a loan myself to pay her fees for her.
So now simon Hughes is next in line to be picked off by the Tories.
He already damaged his own credibility by abstaining on the Tuition Fee’s Vote, Now he is going to go round the country and trumpet the Tories New policy on University Education, encourage students to get into a life time of debt, whilst at the same time, having the personal opinion, that tuition fee’s should be dropped.
Cameron and the Tories are really doing a good job of annihilating the Liberal Democrats Long term Prospects, By slowly picking off Liberal Democrat MP’s 1 by 1, they are insuring that there is nobody left to pick up the pieces or the party.
For somebody who claims to understand the system you are terribly wrong.
You will not pay £20k. You will not pay anything. Tuition fees will be collected via the PAYE system from her salary when she starts earning one. Unless you intend to be giving your daughter a monthly stipend until she is 50, the total cost to you is zero.
The interest rate is also not “penal” – quite the opposite in fact, it’s tapered and below market rates.
And here we have somebody who doesn’t even know what year it starts in. The new regulations apply as of September 2012.
These claims of understanding ring rather hollow.
@Paul
I applaud your commitment, Paul. But I do hope you get some financial advice and will think seriously before you consider these options. A much better thing to do might be, given the understanding that the State will take care of her tuition fee costs, to buy her a house after she graduates. That will be a better use of both of your monies.
The irony is that it was Hughes, among others, who spread years of negative misinformation about tuition fees, and now he is charged with spreading positive misinformation about tuition fees.
Declaration at the start: Labour Party member.
I have to say I cannot understand the strategic thought behind any of this (and as such it sums up the mess the Lib Dems are in). Is it really an elaborate way of “buying” one more vote or does somebody really think that such an “appointment” will make the slightest difference?
Simon Hughes’s interview on WATO was one of the worst I have heard by a politician in a long time. He appeared to say his objection to the tuition fees policy was purely presentational and then – having realised the hole he’d just dug for himself – then appeared to say he opposed government policy still. How, then, can he be an effective salesman for it?
I am not sure there is any way back now for the Lib Dems: advocating policies you cannot deliver in opposition is one thing – attempting to sound like the holder of the moral; high ground while doing a 180 degree turn is actually far more electorally poisonous. The Simon Hughes appointment and the mess he got himself into trying to justify it only shows you haven’t grasped it yet: until you actually acknowledge that you’ve changed your minds because you were wrong before then you are only putting more and more distance between yourself and the voters.
And, yes, I agree Labour’s position on this issue is pretty hopeless, but we’re not in power. Your are, but until you really learn to think strategically and do something to make the electorate start listening to you then you are heading for the beating of beatings in any forthcoming election.
All this talk about the levels of fees is a complete joke as it is a total irrelevance. Under the old system students paid 9% of their salary above £16,000 for up to 25 years. Under the new system students pay 9% of their salary above £21,000 for up to 30 years.
The only difference is that richer students will pay the 9% for a number more years than previously.
It is neither the best system in the world nor the end of all western civilisation.
As much as I’m glad that lefties are concerned about the negative impact of higher marginal tax rates on graduates. Considering all the difficulties of reducing the deficit I really can’t get that upset that graduates in the upper half of the income distribution are taking some of the pain. We are in this together, and that includes rich graduates and that isn’t something I particularly worry about.
@Uday Reddy
Sorry Uday but I can’t understand how graduate repayments: ‘are the same whether the graduate studied £6,000 course or a £9,000 course. They are also the same irrespective of whether the student borrowed just the tuition fees or living costs to the maximum limit’.
Please bear with me on this. If we have a ‘poor’ student on a £9K course my understanding, according to what I heard in Parliamentary debates in both houses, is that a ‘poor’ student would only have a total tuition fee debt of £9K as he would have 2 free years. On a £6K course his total tuition fee debt would be £12K as he only had 1 free year. The ‘rich’ student would have debts of £27K and £18K respectively.
Then according to my reading of the draft explanatory memorandum issued by the Coalition, the interest chargeable on any outstanding loan also alters depending on the income earned by the graduate from RPI+3 per cent at £41K down to RPI+2.2 per cent at £21K.
Even at that simplistic level the repayments over 30 years or until the loan is repaid must be different depending on the amount of the loan, the amount of interest charged and the graduate salary level. I am sure that I must have missed something very simple and I am the first to admit my strength doesn’t lie in numeracy.
I haven’t ventured into the maintenance grant/loan area as I think that complicates the issue but it is worth noting that the means-tested maintenance grant of £3,250 under Browne tapers from full grant to families with income under £25K to £50 for families earning over £60K. Under Cable the poorer figures remain the same but for higher earners the grant is reduced to zero for family income over £42K.
The theme continues with maintenance loans with Browne allowing a £3.75K flat loan for all students and Cable providing a means-tested loan between £3.575K and £5.5K pa although there is no detail on the means testing mechanism. So a real squeeze comes in against middle earners and I wonder if this is why the Coalition has been so unclear about the whole financing of their cuts and who actually is paying for the education of children from poorer families.
Interestingly the Memorandum assumes student numbers will remain steady despite the fees increase but admits: ‘It is impossible to predict how demand and supply will react under the new system.’ So the LibDems have made huge changes to uni funding and haven’t really got a clue as to what the effect will be – that’s really reassuring.
The Memorandum also states clearly that for graduates: ‘loan repayments expected to increase’ and as that is signed-off by Cable.
@Uday, I see you state that a graduate earning under £21K will have their loan increase by an RPI rate of interest plus a zero real interest rate. But my reading of the Memorandum leaves me thinking it would be RPI+2.2per cent. It may be that you are getting confused with the old scheme with saw an inflation rate only increase with no real terms interest charged.
OK I know I’m no expert and I will accept what the Institute for Fiscal Studies say on Cable’s final amended scheme once we all realised just how hopelessly confused he was about what year’s prices applied to the £21K earnings threshold. The IFS state that the poorest 30 per cent of students – in terms of family income – will be worse off under Cable’s proposals.
@Uday – so I’m afraid I don’t accept your airy assurances that everything is fine, especially for poorer students and will stick with the independent research done by the IFS and the conclusions they have reached.
Stephen W – ‘All this talk about the levels of fees is a complete joke as it is a total irrelevance.’
Could you explain this as it sounds very welcome. So someone paying back £27k will not pay any more in total than someone who is currently paying back £10k. How does that work exactly?
Ok I see now, you mean the annual payment will be similar. Which is true enough, but rather misleading if used to describe the level of fees as an ‘irrelevance’. If you extend the length of your mortgage to 40 years from 15 your house does not get cheaper.
Simon Hughes abstained instead of voting against the trebling of tuition fees. This has given us the voters a clear indication where he stands and he is not going to fool us. All I can say is roll on election time when we can show how we feel.
@Andrew Suffield
I think you are dismissing the interest rate issue a little glibly by just stating it isn’t ‘penal’.
If the Cable mechanism was currently in operation the rate would be 6.9per cent for those earning above £21K and 7.7 per cent for those earning £41K and above given that RPI was 4.7 per cent in November. The coast of government borrowing is lower than the interest rate it is charging – I suppose it’s a bit like profiting from the Irish loan – plenty of weasel words but don’t miss the chance to make a buck.
Now you may argue that’s a good rate for an unsecured loan. However, we are talking about a 30 year repayment period which is more akin to a mortage than a short-term non secured loan and of course mortgage loan interest rates are much lower than Cable’s rates. All that’s missing is the security of the house but surely a government has to look at the national economic gain which is generated through workers educated to degree level.
So graduates from all backgrounds could be given a reduced rate or it could be made much more progressive in operation by tapering the rate beyond the .8 per cent spread which currently exists. I also haven’t heard any real explanation why there was any need to change the basis of charging interest under the old system which was only rate of inflation.
Browne changed it to RPI+2.2 per cent but Cable then added a higher topr rate of RPI+3.0 per cent. Browne included a RAB charge of 27 per cent with his figures but didn’t give any break-down for default or interest subsidy. Cable gave no RAB figure to refelect his additional rate change.
I also think it a bit pedantic at this time of year to pick someone up for possibly confusing 2011 with 2012 and who knows maybe, like me, he thinks the tuition fees issue isn’t finalised until Tuition Fees 2 in January 2011 in parliamentary terms of course. In other ways it will run until the next GE – I would quote a year but I have a strong feeling I might get it wrong 🙂
@Matt
No wonder the Bank of England didn’t employ me lol
I just can’t figure out how a higher loan with higher interest rate and longer repayment period costs less than a smaller loan, with lower interest rate and shorter pay-back period.
Btw Matt I don’t think they would have employed you either 🙂
@Ecojon
Here is a link the student finance page on the BIS web site. Note that the number 2.2 does not appear anywhere. (2.2% was mentioned in the Browne Report as real interest rate that the Government pays for its own borrowing and they recommended that the students should pay that as well.) However, the Government has changed 2.2% to 3%. At 21K, the real interest charged is 0% and it grows linearly until 3% charged at 41K. So, for instance, at 25K salary, the interest rate is 3% * 4/20 = 0.6%.
It was not clear to me from the Government documents whether the loan balance would be adjusted for inflation. Browne recommended that it should be done, but the Government wasn’t unclear. However, various secondary commentaries are now saying that it will be done. Here is one that I ran into sometime today:
Tuition fees furore: what exactly are the plans?
The reason for saying that the poorer kids and the well-off kids will be paying the same amounts is that the majority of the graduates will be earning salaries in the 21K-41K range for most of their careers. In this range, the payment scheme is barely enough to pay the RPI+interest on 27K tuition fees, let alone any living costs. So, the poorer kids will be entitled to borrow more for living costs, but they won’t be repaying any more than the others. If I was a poor kid, I would borrow the maximum amount because I know that the Government would be repaying most of it for me.
The point of saying this as often as we can is that the students from the poorer backgrounds would find the idea of taking out such large loans at such a young age to be very very daunting. So, they need to be reassured that help is available from the Government.
I was only talking about the tuition fee loans. I didn’t take into account maintenance grants or the national scholarship scheme. If they get grants/scholarships, then they would be able to repay more of their loans. But that would be fair because they would have received their Government support up-front instead of in deferred payments. Either way, they would get the benefit.
@EcpJon
The IFS analysis has been available for some time. Please find it here.
@ Ian Butler
“As a parent I undestand that tripling student fee and abolishing EMA will make it much less likely for my children to continue in education.”
Talk about patronising.
As the money saving expert website shows, the new system will actually ensure that graduates have a higher disposable income.
http://blog.moneysavingexpert.com/2010/12/17/will-new-student-loans-stop-you-getting-a-mortgage/
As for EMA. I mean it’s not like *anyone* carried on to do A levels before that was introduced in the early 2000s.
No, it’s tapered. The system works like this:
While studying, interest accumulates at RPI+3% (so, that’s typically two or three years worth). After graduation, interest switches to the repayment scheme: for people earning under £21k, interest is precisely RPI, and for people between £21k and £41k there is a linear function from RPI to RPI+3%. People over £41k pay RPI+3% (which they can very easily afford).
A person earning £22k would be charged interest at RPI+0.15%, for example.
Not only was there no need to do it, but it didn’t happen, and the Lib Dems did taper it across the full 3% spread.
Given that the system does in fact do exactly what you asked for, should we presume that you actually support it now that Labour’s lies have been stripped away?
@all I have to say
No, he said that, in an ideal world, we wouldn’t have the tuition fee rise, but we are in a coalition where we have to compromise. He also said that we would have had to make such a compromise “even if we were in a coalition with Labour.” You probably missed that part.
Look, the Conservatives are the largest party in the house. The British people voted for them. So, if you want to find somebody to blame for the situation, blame the people that voted for the Conservatives. They ddn’t have to do this. We all know. But they are CONSERVATIVES!
In simple terms the problem is one of debt at the beginning of adult life. There is a vast swathe of young people who are in the middle and will be in debt. Lib Dem instincts were right. Tragic that they have got it so wrong when in ‘power’.
@Cepen
My opinion is that this is the wrong view to take. The student loan is not like normal “debt” because it is managed by the Government. The repayment terms are fixed, and the balance is written off at the end of the 30-year period. The moneysavingexpert web site that was cited above says:
So, what people should be looking at are the repayment terms, not the amount of loan.
I see there’s a lot of selective quotes from the money-saving-expert site on the question: Will the new student loan stop you getting a mortgage?
So – let me reciprocate with Martin Lewis’s final paragraph:
“Actually my biggest worry over this is the psychological one. Many students wait until they’ve cleared their student loans to get a mortgage and you can understand the sentiment why. Of course with people taking far longer to repay in the future, if that continues then there really will be a hit on the mortgage market.”
Better still, people interested should read the whole piece.
However, the whole piece is based on those going to university. Many will now be deterred before they get to this stage.
On my wage of £20,000 a year, I know that I would be far better off under the new proposed system (where I would be paying nothing) than I am on the old system. When you are on a low wage, it is your disposable income that makes all the difference, not the hypothetical amounts you might have to pay should you ever be fortunate enough to have a decent wage.
But regardless of whether the changes are right or wrong, we should all be able to agree that it is important that the Government does all it can to ensure that people are not put off going to university because of these changes.
As for EMAs, given we are making education up to 18 compulsory, do we need the same sort of financial incentive as we did before?
@RichardSM
I have two answers to this issue:
– If the Lib Dems + Conservatives get housing policy right (well, a big “if”, I know), then the house prices should not rise too much in the future as they did in the past. So, whether one buys a house or rents shouldn’t make too much of a difference. In countries like Germany, I am told that the majority of the people rent for all their lives. I don’t think their lives are any the poorer for it.
– Martin Lewis is projecting from the present situation, where I believe the average repayment time for the student loans is 7 years. For the new scheme, a good majority of the graduates are expected to pay all through the 30 years and have the remaining balance written off. So, if they wait for the loans to be repaid in order to buy a house, they will essentially be waiting for ever. A good many of them would probably get the wiser sometime in between.
@Uday Reddy
“For the new scheme, a good majority of the graduates are expected to pay all through the 30 years and have the remaining balance written off.”
Making a mockery of the fact that this is a measure driven by fiscal need rather than ideological desire.
“So, what people should be looking at are the repayment terms, not the amount of loan.”
Unless they are worried about government borrowing, which is what I thought we were all meant to be terrified about – or did I miss another change in the story?
@Uday Reddy
Thanks for your reply. I understand your points and agree to some extent – but in the round, on balance, taking all things into account, etc., I am still against these proposals. I wanted / expected to see total course fees in the £5000 – £10,000 region with a ‘Browne type’ repayment scheme.
@Steve Way
“Making a mockery of the fact that this is a measure driven by fiscal need rather than ideological desire.”
Why?
Those who can afford it will be paying more under this system, so will that not help the fiscal situation?
Though to be honest, if this change is due to ideology then it is one I can whole-heartedly support. It sickens me to see so-called progressives opposing changes that will protect the low-paid. Helping the poor trumps any manifesto commitment or pledge any day.
@athirat
“Those who can afford it will be paying more under this system, so will that not help the fiscal situation?”
Yes but it is not the financial situation of the rich students/graduates that matters but that of the Country, specifically, that of the Country over the next 10 years. These policies will not be a financial benefit to UK PLC in this period.
“Helping the poor trumps any manifesto commitment or pledge any day.”
And so dies democracy. According to you it does not matter what is said at elections to gain votes, it can be ignored…
Mmmm I think you share that view with some notable characters from history none of them good. Let’s not bother with elections anymore and allow those in power to decide what’s best on their own shall we ?
Fiscal need? Nonsense. The only need was because the teaching budget was cut by 80% so that the Tories could privatise higher education and let the market get rid of the former polys they don’t like.
“Those who can afford it will be paying more under this system, so will that not help the fiscal situation?”
This is all funded from borrowing, so it obviously won’t in the short term. Whether it will in the long term depends on how much of the loans is paid back, and that’s anybody’s guess.
“It sickens me to see so-called progressives opposing changes that will protect the low-paid. Helping the poor trumps any manifesto commitment or pledge any day.”
How the f*** does trebling university fees help the low-paid?
@Uday Reddy
I would actually suggest that you read the IFS link that you so kindly supplied for me – I did actually study the information approx two weeks ago
As I said previously, and as borne out in the IFS link: Graduates from the poorest 30 per cent of households in terms of parental income will pay back more, on average, than under the current system scrapped by Cable.
Quite simply, anyone can say anything they want and play with stats and words but the Cable scheme is less progressive in terms of repayment for graduates from the poorest 30 per cent of households than the current system being scrapped by Cable.
Do I need to again repeat the IFS finding? Is there something ambiguous about their finding or statement?
I should also say Uday that I do not accept that principles should be thrown away on the flimsy excuse of ‘compromise’ because the LibDems are in a coalition. Coalition, just like cuts, are about choices and the LibDems have made certain choices which they will be judged on by the electorate. As to whether we would have had the same outcome in a LibLab Coalition how can anyone actually know that.
I would like to think that we wouldn’t have and that Labour wouldn’t have launched such an attack on the funding ethos of our universities. I am not even seeking escape in the defence that Labour would have cut less and slower. And as to Labour’s record on tuition fees there is a lot I disagree with but it has to be remembered that it was designed to inject more money into unis and open-up access to students from poorer families through expansion.
The IFS talks about a lot of ‘perverse’ influences created by Cable and I won’t deal with all. But I can’t ignore the psychological factor created by fear of bigger debts which the IFS have found is certainly grounded in fact for graduates from the poorest 30 per cent of households.
The next perversity is that unis which take a lot of FSM students are under pressure to keep fees below £6K so as not to have to provide free tuition. Some might say this is a good thing but I see it more as creating a uni with really ‘poor’ teaching and facilities and possible closures or contractions.
Will they decide to turn away FSM students to survive?
We have to remember the impact assessment signed off by Cable who states: ‘It is impossible to predict how demand and supply will react under the new system.’
Then we have the more presigious £9K cap unis where it is cheaper for a FSM student and the government for a FSM student to study there.
Somehow or other I find it hard to believe that Oxbridge and other elite, oversubscribed Russell Group unis will sit idly by and absorb FSM tuition fee costs when they could be getting full whack from students from richer backgrounds.
Of course, I could be proven wrong when we see the access conditions spelt out in the ‘exceptional circumstances’ allowed for increasing fees to the £9K cap. But I really hae ma doots that there will be any teeth to the access conditions and worry about FSM students not just having to pay back more for their university education but also being actually squeezed out of receiving a uni education.
@Andrew Suffield
Well I’ve heard it all now 🙂
You say students while studying will be charged interest on their loans at RPI+3 per cent which hardly seem fair when graduates will only be charged that rate once they earn over £41K. Just another sign of hurried legislation.
As to your reference to ‘Labour Lies’ all I can say is that I think there was an almost unanimous vote in the Commons from MPs of every opposition party against the tuition fee increase and they were also joined by LibDem and Conservative MPs and that’s ignoring the LibDem abstaining handwashers. I also wonder what line Welsh and Scots LibDem elected members will take in next year’s elections or are they hoping Simon Hughes will have worked the oracle by then 🙂
Somehow, I doubt if they’ll be recommending the Cable route although I readily concede that it’s debatable how long the devolved governments can hold their current line because of the immense pressure that the English decision will put on Scottish and Welsh unis.
I won’t deal with your other comments as I have the feeling that you have a very fixed opinion on this matter and possibly in general with matters affecting the LibDem Parly leadership. My opinion has never been fixed on this issue mainly because I received a free university education 45 years ago with no fees and a maintence grant I could live off. One of the enduring benefits from that education was to learn to listen to all the arguments and question them in order to reach an informed decision rather than just open my mouth and let my belly rumble.
Over the years I have also learned to be wary of anyone who dismisses opponents by labelling their arguments as lies as I have usually found this is a device often used to hide the weakness of their argument or political position.
I find it much more positive to understand opposing positions by questioning those who hold them and weighing their answers which often allows a compromise position to be reached or at least a recognition that the view is honestly held. I should add that I have no interest in the weasel words of politicians and those who aspire to be, whose motivation is personal gain or power and not the strengthening of our democracy and the building of a fairer society.
On tuition fees I accept times have changed and that students do have to make a contribution and I really have been trying to decide what is the best system for repayments. My implacable opposition to the savage Tory ideological attack to privatise universities, supported by LibDems, remains .
I must say that the more I look at the Cable proposals I see it as a graduate tax in all but name but until the White Paper is issued next year I am unable to come to an informed conclusion.
“For the new scheme, a good majority of the graduates are expected to pay all through the 30 years and have the remaining balance written off.”
What are the chances that in thirty years time, a cash-strapped government will turn round and say that it can’t afford to stick to this silly promise, made by Cameron and Clegg back in ancient history, to write off an unpaid debt? If I was a student, I wouldn’t trust a government to keep that promise to me, some time around my early fifties.
@Uday Reddy
I am still personally unclear about the 2.2 per cent issue although the forthcoming White Paper will hopefully provide a definitive answer. I am also loth to accept what moneyexpert states without a cited government source.
I would also say that I find it a bit disingenuous to say that the people who should be blamed for the tuition fee mess are the people who voted for the Tories although I do believe the issue has been driven by Tory ideology.
But the LibDem MPs could have stopped this and chose not to and I have no doubt the public know exactly who the panto villain is this season. I would suggest that current polls illustrate that they have correctly identified the party responsible whose MPs broke personal pledges which should have been red-lined in any coalition agreement IMHO.
I also note your references to Coalition Policy on housing and your hopes for it which I find difficult to share for a variety of reasons which go way beyond the current discussion. However you specifically mention Germany and might I suggest that there are huge social, economic and legislative differences which bring about very different housing markets for both rented and bought housing units in Germany and Britain.
Indeed there are lots of differences between Britain and many other Continental countries which will not be altered as far as I can see, at this stage, by Coalition housing policy.
@David Allen
I think you’re spot-on. After all the current system with lower interest rate, shorter write-off period and lower fees has been scrapped.
Anything could happen in the future and I think it might come a lot earlier than 30 years.
I suppose it’s all down to trust 🙂
“How the f*** does trebling university fees help the low-paid?”
Because their disposable income will be increased substantially! The threshold is being increasedm
“I suppose it’s all down to trust”
I suspect it will be written into the terms of the loan and beyond political interference. For the same reason, the government can’t mess with the terms of current loans.
@EcoJon
As I said previously, and as borne out in the IFS link: Graduates from the poorest 30 per cent of households in terms of parental income will pay back more, on average, than under the current system scrapped by Cable.
I don’t think I have ever claimed anything to the contrary. I am not the one to pull pigeons out of my hat.
What I said was that the poorer kids would be paying the “same amounts” as
the well-off kids even if they will have to borrow more. I have never
tried to make any comparisons with the current system. I know very
well that the whole point of the new system is to transfer more of the
teaching costs to the students. So, overall, the students would have to pay more.
On the other hand, I believe that the Government will, in the end, be spending just as much as it is spending now on HE teaching. But the difference will be that the Government spending will be focused on the low-earners while the high-earners will have to bear more of the cost. (But I should emphaize that that is my estimate. The Government’s own estimate is that it will be saving 1.5M in the steady state, i.e., 55% of the current expenditure. The Higher Education Policy Institute has poked holes at the Government’s estimates, pointing out that they didn’t take into account gender differences. HEPI estimates that the savings will be much less.)
Being a “low earner” is a different thing from coming from a poor background. Somebody from a poor background might do very well in education and end up in a high-paying job. Conversely, somebody from well-off background might end up in a low-paying job, either by ability or by intent. The Government will be subsidising the lower earners.
Do I need to again repeat the IFS finding? Is there something ambiguous about their finding or statement?
Yes, I think there is. I don’t see the IFS taking into account any correlation between the students’ income background and the future earning potential. But we know that there will be such correlation. There is higher likelihood of students from poor background becoming lower earners, because the quality of education they receive at all ages is generally weaker. So, if they become low earners, there is higher protection offered by the Government. It is right for the Government to offer protection to the low earners. Do you not agree?
I am not defending the new fee regime. Neither is Simon Hughes. All that we are trying to do is to explore and explain the implications of the new fee regime so that the students from poor backgrounds don’t have to feel deterred. The explanation is by way of saying that, if the students are worried that the debt will be too high and they won’t be able to pay it back, then the Government will help. The Government is doing risk mitigation. But, on the whole, it is charging the students more. That is incontrovertible fact.
I would like to think that we wouldn’t have and that Labour wouldn’t have launched such an attack on the funding ethos of our universities. I am not even seeking escape in the defence that Labour would have cut less and slower. And as to Labour’s record on tuition fees there is a lot I disagree with but it has to be remembered that it was designed to inject more money into unis and open-up access to students from poorer families through expansion.
I agree entirely. But the British public did not vote for Labour. So, what can you and I do about it? Blame the stupid public if you will. But we are here.
The next perversity is that unis which take a lot of FSM students are under pressure to keep fees below £6K so as not to have to provide free tuition. Some might say this is a good thing but I see it more as creating a uni with really ‘poor’ teaching and facilities and possible closures or contractions.
The Universities need to set the fees at 6K just to stay where they are. Now, if they are being asked to subsidise the FSM students, then they would have to raise the fees to a sufficient level to cover that cost. So, yes, I agree that there would be a hole around 6K space. Is there any way to avoid it? Isn’t it altogether a good thing that there is a mild barrier at 6K so that at least some Universities will try to keep their costs low?
Of course, I could be proven wrong when we see the access conditions spelt out in the ‘exceptional circumstances’ allowed for increasing fees to the £9K cap. But I really hae ma doots that there will be any teeth to the access conditions and worry about FSM students not just having to pay back more for their university education but also being actually squeezed out of receiving a uni education.
If there is one thing true about Britain, it is that it has a lot of good Universities. And, don’t just get stuck on Russell Group. Queen Mary in London, for instance, is a damn good University that has lots of students from poor backgrounds. There is Sussex, Leicester, Exeter, Kent and so on. Many of the “new” Universities are also quite good. Our advice to FSM students should be to ask them to study as well as they can and get into a good University.
“Yes but it is not the financial situation of the rich students/graduates that matters but that of the Country, specifically, that of the Country over the next 10 years. These policies will not be a financial benefit to UK PLC in this period.”
Ah, over ten years you wouldn’t expect much of a return, you are correct. The return will be in the much longer term. Would I be right in thinking that the overall graduate contribution is increasing?
@EcoJon, responding to David Allen
I don’t know what you mean by “scrapped”. The current students who are on the current repayment system (with 0% loans), will continue to stay on it. Their interest rate is not being raised. Their repayment period is not being increased.
As to what guarantee there is that the Government will indeed write off the debt balance after 30 years, all I can say is that it is the law and it is a sovereign commitment (as opposed to an election manifesto).
More lies. All students who begin a course before September 2012, including ones starting next year, will receive the shorter write-off, lower interest rate, and higher rate of repayment. Nothing has been scrapped, and your implication that old loans are being increased or extended is pure fantasy.
The poorest students will also end up paying more in this legacy system – they benefit from taking a gap year and starting in 2012.
Personally I’m more wary of those who lie, because it invariably indicates that they are wrong.
athirat
“Because their disposable income will be increased substantially!”
FFS just think about it! That’s not because fees are rising, is it?
“The return will be in the much longer term. Would I be right in thinking that the overall graduate contribution is increasing?”
But so is the overall cost of fees! No one knows whether the net long-term effect will be to reduce public spending or increase it. You need to do some reading.
“FFS just think about it! That’s not because fees are rising”
No. Its because the system is changing. What the higher fees do is ensure that those on middle to high incomes pay their fair share… again to the benefit of low earners.
@Andrew Suffield
“Personally I’m more wary of those who lie, because it invariably indicates that they are wrong.”
In my book pledging to vote against an increase in tuition fees then doing so, or abstaining, is a lie.
Telling the country in the debates that scrapping the schools building programe would be”just silly” then supporting it’s scrapping is a lie.
Supporting policies in public then telling strangers in your surgery that they are wrong is a lie (one way or the other).
So I agree, Clegg, Cable and a whole host of other Lib Dem ministers are liars and by your argument there are emphatically wrong…
@athirat
“Ah, over ten years you wouldn’t expect much of a return, you are correct. The return will be in the much longer term.”
But one of the main reasons given for breaking their pledge was the financial situation, which they also say will be fixed within this parliament. Another lie from Cable then?
This is not about contributions being fair, or about the deficit this is about reducing (and in many cases removing) the teaching grant and passing the cost directly to students. In other words this is about privatising our Universities through the backdoor.
Supported by many MP’s from a party that still states it believes in free education for all. Thank God some had the integrity to keep to their word.
@EcoJon
Ok, let us talk politics for a bit. More British public voted for the Tories than any other party. And, the Lib Dems actually received the fewest votes. Now, you are claiming that all these people that voted for Tories think it is the Lib Dem’s fault that the tuition fees went up? Well, anything is possible from the people that vote Tory, I suppose!
But, wait, a lot of these people were actually Labour voters, who decided to teach the Labour a lesson and switch their vote for just this once. These poor buggers couldn’t tell. They thought the Tories were just as sweet as they looked. And, now the Tories decide to teach them a lesson by doing savage cuts and balancing the budget in 4 years. Still, it is the Lib Dems fault that this has happened?
Ok, the Lib Dems made a pledge not to raise the tuition fees. Stupid pledge, I know. But you are saying that all this public that didn’t want the tuition fees raised, ignored the only party that made the pledge, and voted for the other two parties that didn’t make any pledge. And, now that the fees have been raised, you mean they think it is the Lib Dems fault? Why didn’t they vote Lib Dem if they cared about the pledge so much?
Democracy means that you think carefully and make the right choice when you get the chance. And, then you live with the consequences. You can’t plant your head firmly in between you knees and hope for the best.
Lib Dems are definitely culpable. Nobody is denying that. But don’t try to get us to sympathise with the poor public who knowingly made the wrong decision and are now having to face the consequences. If they didn’t want the tuition fees raised, they should have voted Lib Dem. Then we would have raised taxes and done whatever was necessary to keep the pledge.
“What the higher fees do is ensure that those on middle to high incomes pay their fair share”
Not according to the Lib Dem manifesto in May, and not according to what remains the party’s policy.
Let’s be clear. You’re arguing in favour of Tory policy here, and against Lib Dem policy.
“If they didn’t want the tuition fees raised, they should have voted Lib Dem. Then we would have raised taxes and done whatever was necessary to keep the pledge.”
Well yes, many of us Lib Dems would indeed have wanted to do that. But would Prime Minister Clegg have done that, if he ruled the nation alone? Doubt it!
@EcoJon
I agree that it is a strange thing to do. There is no mention of interest during the study either in the Browne Report or the Government documents. I think IFS just assumed that it would be RPI+3%, but it is not clear that the Government has made a conscious decision about it. We would have to wait for the White Paper.
@Cicero21
“But don’t try to get us to sympathise with the poor public who knowingly made the wrong decision and are now having to face the consequences. ”
But what about the poor public who DID vote Lib Dem. They should have been able to expect the pledge to be kept. After all it was pretty clear that those who signed it did not need to gain power to keep it…
Those poor public who “made the wrong decision” are not going to be encouraged to make the right decision next time if those Lib Dems who did get elected do not show the moral integrity to keep their word.
Lib Dems could have stopped this policy going through in it’s current form, they didn’t.
Whatever twists and turns and wheeling out of Simon Hughes who wimped out at the vote Lib Dems lied at the GE. The evidence is there now what had been decided by Clegg prior to it.. Not one word from a Lib Dem will ever be trusted again. The way this appalling fiasco is being justified is sickening. Talk about u-turns.
@Cicero21
I did vote Lib Dem as one of the poor public that you seem to despise. Not clever to bite the hand that feeds you.
This is very Hippocratical; not withstanding the merits of the fees rise, how can a individual who did not believe in supporting the fees rise in parliament can become a poster boy for supporting it ?. Why would i believe a individual who does not believe in his own actions ?
This sums it all up. Lib Dems being used again.
http://www.independent.co.uk/opinion/the-daily-cartoon-760940.html
@Steve Way
.
The fiscal situation is a bit subtle. So, please stay with me.
The Government believes that the new system will require 1.1B in the steady state, down from the current 2.7B expenditure. That is a saving of 1.5B+. But this is an estimate and not everybody agrees with the estimate. I personally believe that the expenditure in the new system would be in the vicinity of 2B. The higher it is, the happier I am, because I believe that the Government should pay substantially for the cost of educating the workforce.
If you plot the Government expenditure, you will see it going down from 2.7B to 0.8B by 2014-15, and gradually increasing to whatever is the maximum over the next 10-15 years. So, it will be definitely contributing towards balancing the budget in 2015. The bond market, from which the Government has to borrow, wants to see the Government taking active steps towards cutting the deficit. What happens in the long term is not such a big concern, because the economy will grow and lots of other things might happen.
Meanwhile, the Government will be borrowing and lending, but it will be an “off-balance sheet” transaction, and won’t affect the current deficit. Meanwhile, the resource for the Universities will increase and the Government will have them off their back for another 5 years or so. By then, the student numbers might stabilize and the future problems will only need to deal with the rising costs of Universities.
@Uday Reddy
“Meanwhile, the Government will be borrowing and lending, but it will be an “off-balance sheet” transaction, and won’t affect the current deficit.”
I run a business and debt is debt, hiding it in different places on the accounts works for a small time only. In fact I would say that the debt taken out to cover current students will be a millstone for future governments who have to write a substantial percentage off (if the repayment is to be as “fair” as is claimed).
“Meanwhile, the resource for the Universities will increase and the Government will have them off their back for another 5 years or so. ”
Unfortunately the resource will not rise. As much as I disagree with Labour’s HE policies during the last 13 years, they did provide additional money. the current proposals when viewed alongside the reduction in the teaching budget at best maintain a staus quo.
I’m afraid cannot see this as anything other than ideologically driven, I just hope a better system is in place for my 6 year old. My eledest is already at Uni and will not be affected by these changes…..
No one bothers to think about the redistribution of the receipt of gifted and inherited wealth then, do they?
Would £10,000 Universal Inheritance for every UK-born UK citizen at 25 financed by reform of Inheritance Tax help a bit towards tuition fees for those going to university and towards other opportunities for those who do not go to university?
Or is that a taboo subject amongst LibDems? It is already party policy of the Liberal Party (www.liberal.org.uk)!
How is it that LIbDems are so very much less concerned than Liberals about the inequality of inherited wealth? You would think that they would be pleased to distinguish themselves from right wing Conservatives – if not from liberal Conservatives – on this issue.
I agree that we did not do right by the Lib Dem voters. We will have to make it up to you by delivering on the remaining parts of our manifesto which we will only be able to do by being in power.
But before you pass a judgement on the issue, let us look at the facts:
1. The Government did not cut higher education expenditure deliberately out of malice. The entire Government has been running on deficits for quite some time. So we were living beyond our means, on borrowed money as it were. Labour ran substantial deficits even in good times. So, the problem gets worse when the economy goes down, because the revenues are down and the social spending has to increase. So, the Government simply could not afford the same level of expenditure as in the past. Moreover, the bond markets have become edgy all over Europe and, if they decide that the British exchequer is risky, then the Government’s cost of borrowing would go through the roof, worsening the problem. So something had to be done, and done urgently.
2. The Department of BIS was given a target of around 20% cut. Now, everything in BIS is absolutely essential for the long-run health of the economy. It is our investment into our future, so to speak. The University funding is a very substantial part of BIS. So, if we decided to protect the teaching budget, we would have to cut all other parts of BIS to extra-ordinary amounts, science, research, innovation, entrepreneurship, support for small businesses etc. Doing such cuts would have significantly endangered the UK’s economic recovery as well as the long-run competitiveness. So, transferring the costs of University teaching to students/graduates was an option that we have had to look at seriously.
3. Among the Lib Dems, graduate tax has long been considered an attractive option for funding University teaching. It is still favoured by very many Lib Dems. It is also favoured by the NUS, many parts of the Labour party etc. So, we had asked Lord Browne to consider the option of graduate tax. He studied it and came back with various problems with the scheme. He also pointed out that the graduate contributions scheme that his panel had devised was very much like a graduate tax, but without its attendant problems. Moreover, it was in fact more attractive than the graduate tax in various ways:
– it is only charged on income above a threshold whereas a plain graduate tax would be charged on the entire income,
– it is time-limited whereas a plain graduate tax would have to be paid life long, and
– it is associated with a “tuition fee” which empowers the students as consumers and gives them rights and privileges to demand quality of service from the Universities, whereas a pure graduate tax would only make the Universities accountable to the Government.
So, we made further adjustments to Lord Browne’s proposals so that it is even closer to a graduate tax and proposed it as our scheme.
4. Lord Browne proposed the the University tuition fees should be completely deregulated, but there should a levy to the Government for fees set over 6,000 pounds. We did not agree with that. We thought there aren’t enough incentives for the Universities to keep their costs down, and set the maximum fee at 9,000 pounds. The University have to satisfy stringent access conditions to set fees above 6,000 pounds.
In our mind, the “tuition fee” is essentially a symbolic concept. What matters is how much the graduates have to repay and when. They are being asked to pay 9% of the income over 21,000, for 30 years. And, that remains the same no matter what the “tuition fee” is. If they are high earners, or they were lucky to find a University with really low fees, then they might have to replay for less time. But the majority of the students are expected to be repaying for 30 years. While the “tuition fee” gives the students consumer rights and establishes some minimal market conditions among the Universities (which can only be good for the students in the long run, as the Universities compete among themselves on price and quality), it does not particularly affect what the graduates repay. On the other hand, for the Universities, the “tuition fee” is real money, it is not symbolic. So, we have this ingenious market scheme, where the service providers have a price and competition based on price, whereas the students are not affected by the price.
So, while we have not kept to the letter of our pledge, we think we have very much kept to the spirit of it. The Universities are being funded through a scheme of graduate contributions which is very much like a graduate tax. We were really taken aback when the students neglected to pay any attention to the details of the scheme and became fixated on the idea of tuition fees. This was very very unfortunate. I agree that we have not done such a great job of communicating it or explaining it, and the reports in the Press have been entirely misleading. Simon Hughes has now been appointed precisely to address this concern.
[Disclaimer: While I am a happy Lib Dem, and take ownership of the tuition fee proposals, I have no connection with any of the Lib Dems in the Government or Parliament. ]
“Not according to the Lib Dem manifesto in May, and not according to what remains the party’s policy.
Let’s be clear. You’re arguing in favour of Tory policy here, and against Lib Dem policy”
I don’t think that is the case. I never campaigned for the lib dem manifesto in order to oppose changes that’d. Will make the majority of students better off, and personally I thought the pledge on tuition fees foolish. Btw Perhaps you are not familiar with the way Lib Dems do things, but on the whole we can discuss things without resorting to calling each other Tories.
@Steve Way
Indeed debt is debt, but the money that is lent out is an asset. Please feel free to check with your accountant.
£6,000 fees is status quo. But the Universities have the option of going up to £9,000, which is additional resource. This is no different from what Labour did.
@Uday Reddy
“Indeed debt is debt, but the money that is lent out is an asset. Please feel free to check with your accountant.”
My accountant would call an unsecured loan with less than (according to you) a 50% chance of repayment a toxic asset. One to be avoided. Perhaps he would feel the worldwide lesson of the sub prime mortgages to be a good case in point.
He would also advise against investing in such a long term low yield asset. He would also want to know why the asset was “off balance sheet” as you claim…..
Still thanks for the sarcasm.
“£6,000 fees is status quo. But the Universities have the option of going up to £9,000, which is additional resource. This is no different from what Labour did.”
Labour did not reduce the grant and therefore all the fee money went to Universities.
@Cicero21
“The Government did not cut higher education expenditure deliberately out of malice. The entire Government has been running on deficits for quite some time. So we were living beyond our means, on borrowed money as it were. Labour ran substantial deficits even in good times. So, the problem gets worse when the economy goes down, because the revenues are down and the social spending has to increase. So, the Government simply could not afford the same level of expenditure as in the past. ”
All of which was known before Clegg encouraged his candidates to sign the pledge.
As for keeping to the spirit of the pledge (or indeed party policy) the pledge was remarkably simple in construction and meaning. The only way to keep to it in body or spirit was to vote against any rise in fees AND to work towards a fairer system.
@Uday Reddy
“Indeed debt is debt, but the money that is lent out is an asset. Please feel free to check with your accountant.”
Sorry to add to my last. You would indeed have a debt (or at the very least an underwritten loan) which would have to be repayed, against an asset that would not be fully realised.
@Steve Way
And, the £9,000 tuition fee money doesn’t go to the Universities?
Labour did not reduce the grant, true, but they did not cut the deficit either. That is not “toxic” in your book?
Ok, perhaps I should add some additional explanation to my last post as well.
£6,000 is the current resource per student in the Universities (base rate, for the so-called Band D subjects). £3,000 of it is the tuition fees, and another £3,000 is paid in by the Government.
So, if a University charges £9,000, it has an additional £3,000 resource per student.
@Uday Reddy
“Labour did not reduce the grant, true, but they did not cut the deficit either. That is not “toxic” in your book?”
Not the point, I’m not claiming that Labour managed the economy well simply showing that your point, “This is no different from what Labour did” is wrong. As for the additional £3,000 this is only in exceptional cases. Or is that another myth and £9,000 will become the norm.
There is a pattern of excusing betrayals by Lib dems as being no worse then Labour, or comparing their actions to Labour. People deserted Labour in droves at the last election. Many voted Lib Dem because they bought into the “no more broken promises” integrity ticket.
Whatever Labour did is past, the Coalition are soley responsible for their actions. The whole HE issue is about ideology for the Tories. They look accross the atlantic and like what they see. That the Lib Dems are prepared to perform such a crisp about turn on the issue is a disgrace.
@Uday Reddy
Uday – the RPI+3pc for studying students came from Andrew Suffield Posted 30th December 2010 at 8:30 am – I find it hard to believe that it is correct as it seems irrational.
If you read down you will see what I mean by the old scheme being scrapped – the new scheme can also be scrapped or altered by SI or through primary legislation by this government or any other succeeding government.
I think the reason given by the poster I was responding to, as a jokey aside, is valid viz who knows what a ‘cash-strapped government’ is capable of. I agree very much with what you say about HEPI and the gender balance assumption which skews the figures because of the lower-earning but higher female proportion of graduates.
I also find it very difficult to accept a lot of the figures used by the government as they themselves admit that they have no idea what the changes will mean to demand and supply. Obviously student numbers are critical to all the financial calculations but all we have is an ‘assumption’ that they will remain steady. It really is a big gamble and if it fails the consequences for many universities will be severe.
It also worries me that the easiest way for the government to cut their financial exposure is to cut the numbers of domestic students as this reduces the amount of loans they need to supply.
I accept that ‘low earner’ and ‘low household’ income can be very different but I don’t regard it as honest and transparent politics to only trumpet the one that suits your political case and try to bury the fact that the other blows the government case out of the water. I have a feeling that you also might accept that.
I do not accept your statement that the government will be subsiding the lower earners – a lot of that subsidy will be coming from the higher earners which raises the point that OK the rich should pay full whack for their tuition fees but why should they subsidise other poorer students – is that not the sole responsibility of the government. This anomaly seems to have been lost sight of. It might be one thing cutting off child benefit to the rich on one hand but hardly acceptable to then specifically ‘tax’ the rich to subsidise child benefit paid to the poor.
I think before Simon Hughes steps foot in any school he should be looking at the IFS modelling surrounding the poorer 30 per cent family income factor. Let’s find out what it takes to reduce that to zero, 5pc and 10pc and let;s do it – then I meet accept that something progressive has actually been achieved rather than a rabbit being pulled from a magician’s hat or even a pigeon 🙂
I have never ever fallen into the trap of believing the public is stupid – oh they are human and sometimes they make mistakes and sometimes they fall for a con-trick but they learn from this and usually demonstrate their new-found wisdom at the ballot box.
My worry is that a ‘mild’ barrier at £6K would lead to very quickly to a tier of third-rate rate universities and I really don’t accept the Browne guff about empowering students in terms of informed choice. It’s nothing of the sort – it’s about bums on seats and jingling tills with poor teaching. And then this mention of colleges also keeping ‘cheaper’ unis under pressure to restrict costs. As I say I worry about FSM students finding themselves squeezed at both ends of the fee scale.
I applaud your sentiment about FSM kids studying hard to get into a good university – but will a £9K uni want them – that’s the problem and the answer lies in the access provisions and I honestly fon’t believe they will have any teeth.
I was the first person in my family to go to uni 45 years ago – it was free and I had a maintenance grant but it was still hard but I was determined to escape from a life of poverty. I have done well and my three children have all gone to uni to Honour Degree level and one did his PhD. Hopefully their children will follow .
I know how hard it is but in lots of ways it is even harder these days to motivate kids from a poorer background to go to uni and to work hard enough to get there on academic merit. My mum was a single parent and we lived in poverty but there was a work ethic as there was with all the other kids from my scheme who went to uni at the same time – really the first wave who went to uni in numbers.
Nowadays there has been no work ethic for a couple of generations for a lot of poorer kids and that to me seems to be the real demotivator. To be honest I’m not sure that telling kids not to worry about paying back tuition fees after they get a degree because they will have such poor wages is really much of a motivator.
But hey that’s another argument for another day.
@Andrew Suffield Posted 30th December 2010 Any poster looking at everything I have said I am sure would readily understand that when I talk about the current scheme being scrapped that I am speaking in the context that a new scheme starts in 2012. In that sense and time-frame, and that is the one I am using, the old scheme is scrapped for new entrants. In a previous post @ you I made it clear that I was aware of the 2012 starting date.
How long the loan book from the ‘scrapped’ scheme will carry on I don’t have a clue but I feel both the old and new schemes could well be merged on cost-cutting grounds but that’s a decision way above my pay grade.
What is slightly worrying is your propensity to label people as liars – let me make it quite clear that I have never intentionally lied in any posts. I may have got things wrong and I may not have made things as clear as I should but I have not lied and resent your accusation.
You also state my: ‘implication that old loans are being increased or extended is pure fantasy’. Could you please cite where I made any such statement as I dispute doing so. The only change I know of to the old system is that the threshold will be increased.
You also appear to imply that the poorest students would pay less by taking a 2011 gap year and start uni in 2012 – well I would be very wary of advising any student in the current economic climate to delay entering uni and getting their degree as fast as possible. Unless there were specific personal circumstances I think it is too much of a luxury.
You also ignore the IFS finding that 30 per cent of students from the poorest families will be worse off under the Cable proposals than the scrapped scheme – using my definition of course 🙂
@Cicero21
The only thing I know about why Tory voters vote Tory is self-interest. I don’t accept your premise that Labour voters voted Tory at the last GE in any statistically significant numbers.
However I do believe that LibDem MPs are to blame for the tuition fees increase firstly for not abiding by their personal pledges and secondly for not redlining it in the coalition agreement although I believe that this agreement was ratified by the party so it widens the blame I suppose.
It has been my experience that the reasons as to why people vote for a party are varied and seldom is it because of a single Manifesto commitment. I think what made it different here was that the LibDem party wooed the student vote + their parents with the pledge and also promised new politics.
I’m afraid that my vision of Democracy is different from your’s. As we are human we often make the wrong personal choice but a democracy based on fairness doesn’t automatically write people off because of a wrong choice especially if honestly made. But these people really believed they had made the right choice and they had Nick Clegg’s assurance and pledge that they were making the right choice.
If they had known that even before the election Nick had decided the Manifesto commitment was a crock of **** I believe they made had altered their position but they weren’t told and the PPCs gaily signed the pledges. Oh most of the PPCs didn’t know about Nick’s decision either.
The public made the decision they thought was right at the time in the belief that ‘new politics’ based on trust and truth had at long last arrived. I would suggest that you have yet to wake up to the fact that their anger isn’t so much to do with the tuition fees being raised but at the cynical deception practiced and the destruction of their Camelot moment.
You also seem to be missing the fact that the people who didn’t want tuition fees raised did vote LibDem – these are the people who really feel aggrieved and angry because you have made them feel foolish and I doubt if they will forget by the next GE.
I should say that I find it touching that if you had formed a majority government that you believe Nick would have kept the pledge. Still, keep on digging – sometimes Australia looks an inviting escape route erm or maybe not as far as coalition politics 🙂
@Steve Way
My response was to your statement that Labour did not cut the teaching grant. I would have accepted that as a matter of virtue if they had found the money for the teaching grant within a balanced budget. But since they were borrowing, who knows whether it was real money or just a delaying tactic? I could equally well take the position that they had really cut the teaching grant, but hid it under the carpet so it wouldn’t show up until after they left office.
Let us leave that aside. The parallel I was drawing was that between Labour’s having set a cap at £3,000 so that the Universities could charge and keep that much amount, and the present Government’s setting the cap at £9,000 so that the Universities could charge and keep that amount. You can’t maintain that it is increased resource in one case but not in the other.
You say that the additional £3,000 is only for “exceptional cases”. But the tuition fee Amendment was passed in Parliament and it doesn’t have any conditions that amount to “exceptional cases”. My guess as to what will happen is that the Government will lean on the Universities to keep the tuition fees as low as possible for the time being (Oxbridge excepted). After a couple of years, when the tuition fee furore has died down, the Universities will be left to do as they please. As I said, the £9,000 fee cap is supposed to last for 5 years, at least until the next elections.
@Uday Reddy
“The parallel I was drawing was that between Labour’s having set a cap at £3,000 so that the Universities could charge and keep that much amount, and the present Government’s setting the cap at £9,000 so that the Universities could charge and keep that amount. You can’t maintain that it is increased resource in one case but not in the other.”
I’m afraid I can maintain that for two reasons. Firstly, whilst the Universities can charge and keep the amount, there has been, for the most part, an equal reduction in their funding from central government. Therefore they charge more to stand still.
Secondly, it is not me claiming that any fees above £6,000 is for exceptional circumstances. It is Cable who has stated that and promised the final Bill will reflect this. Of course we have all seen how consistantly he keeps to his word so perhaps you are right…..
Thanks very much for taking the time to address these issues at length!
IFS is only able to do financial modeling. They are not a sociology organisation. Since the Government scheme is in terms of graduate contributions, which happen in the future, and the income background is what existed in the past, the link between the two is a sociological one, not financial. As I mentioned, we definitely expect there to be a correlation between the income background of the students and their future earnings, due to a variety of factors. But this is not represented in the IFS modeling.
The best we can do is to point out that, for the bottom 30% of the earners, the repayments are either the same or lower than at present. So, the increase in the tuition fees has no effect on them whatsoever. This is not a question of pulling rabbits out of the hat. It is by design. If you had watched the Browne Panel video of Neil Sheppard and Nicholas Barr (to which I gave a reference earlier), you would notice that they had advocated keeping the system the same as at present but expanding it, i.e., increasing the payments for the high earners and making the repayment period longer. The Browne Panel followed these recommendations. So, it is the middle and high earners that will have to pay more, not the low earners.
The students from the low income backgrounds get extra help, in terms of maintenance grants and scholarships. So, when you look at the Figure 2 of the IFS paper and notice that the students from low income backgrounds will have to pay more, you should keep in mind that this will only happen if they turn out to become high earners in the future. If they do become high earners then they will be able to afford it just as their peers from better-off backgrounds will be able to afford it. So, it is not a problem.
@Steve Way
You are right in the general principle, but you are missing a bit of arithmetic here. The reduction in funding is £3,000. So, if the Universities charge £6,000 fees, they make up the difference. If they charge over £6,000, then that is extra resource.
You believe that the Universities will not be allowed to charge over £6,000 except in “exceptional cases”. I don’t think that will be true in the long run. So, I guess we have to agree to disagree!
@Uday Reddy
“You believe that the Universities will not be allowed to charge over £6,000 except in “exceptional cases”. I don’t think that will be true in the long run. So, I guess we have to agree to disagree!”
I don’t believe that, I am simply quoting the Government. Is your argument that they cannot be trusted to keep to their word…. Surely not !!
@Uday Reddy
All I can say Uday is that you have your position on this and you’re entitled to it.
I haven’t reached anywhere near a final position on the fee repayment issue due to lack of information viz ‘exceptional case’ access provisions and many more bits and pieces which the forthcoming White Paper hopefully may address.
I also have thought again about your ‘mild’ barrier around £6K especially vis-a-vis FSM students and then remember the separate departmental cuts to uni funding which followed the tuition fee vote and the fact that some figures appear to suggest that a £7.4K fee approx will be the minimum amount required for unis to stand still.
If that is correct then can that ‘mild’ barrier actually operate?
However, one thing I am clear on and opposed to is the ideologically driven Tory agenda to transfer uni teaching costs, formerly met by the State, 100 per cent onto the shoulders of students. We all know this is nothing to do with deficit reduction – it is about preparing for the full privatisation of some universities and I firmly believe that would weaken our university system and ultimately lead to less equality of opportunity for students from poorer backgrounds.
It will take time for these issues to play out and I recognise that the LibDem Parly Leadership would be terrified to do anything else to unis prior to the next GE which is a small mercy, albeit transient.
@Steve Way
“I don’t believe that, I am simply quoting the Government. Is your argument that they cannot be trusted to keep to their word…. Surely not !!”
Well, it was kind of obvious to me that they were weasel words. I never took them seriously. After you questioned me, I went and looked up the Amendment that was passed in the Parliament. There was no mention of any exceptional conditions. What is said is: “HEIs wishing to charge up to the higher amount threshold are required to draw up an access agreement with the Office for Fair Access (OFFA), whose role is defined in the Act.” So, once again, I have to say it is just like Labour.
As I said, I expect the Government to exert the pressure on the Universities to keep their fees towards the lower end of range for the time being. Oxford, Cambridge and London Universities will be the “exceptions”. But, after a couple of years, the Universities will be released from this obligation.
@EcoJon
The resource the Universities received this year was under £6K per student. Now, if the Universities claim that they will need £7.4K in 2012-13, the burden is on them to show why that is. Please don’t take every thing you see in the Press to heart. There is a lot of posturing and gimmicks by the Universities. It is perfectly well feasible to operate a low-cost University with under £6K fees. There are private Universities that are claiming to do it for £3K. (I will grant it to you that the quality might be weak at that level.)
The fear of privatisation is unwarranted in my opinion. The US has thriving private Universities, which do much better on access than our State-controlled Universities.
The “Tory agenda”, if you can call it that, is to unleash the market forces. As a liberal, I am not opposed to such a thing. But this does not amount to “privatisation”.
If the Government had transferred to the students 100% of the costs then I would have been dead opposed to it, just like you. But that is not what is happening. The Government is using a different mechanism to channel its funding, via subsidy to the low-earning graduates. I believe the HEPI’s analysis that the Government is not really going to save any money in the long run. However, it will be focusing the funding on the low earners, who need it the most.
I think we can all see the political advantage to Cameron and Clegg in getting a lefty Lib Dem to “explain” the policy. We must assume that Simon Hughes has accepted this poisoned chalice for high-minded reasons.
Given that the deeply damaging (in my view) hike in fees is now a reality, what we now need are people of deep knowledge and communication skills but no particular political affiliation to advise young people and their families on the true cost of university, its alternatives, and the importance – if university is the eventual choice – of choosing the right establishment and the right course (I believe some EU countries offer good courses at low cost – some of them conducted in English!).
Let’s hope that Govenment cuts to Connexions don’t lead to a downgrading of careers advice.
There are some dodgy universities offering dodgy courses (homeopathy anyone?) whose closure would be no bad thing.
@Uday Reddy
Uday you stated: ‘if the Universities claim that they will need £7.4K in 2012-13, the burden is on them to show why that is. Please don’t take every thing you see in the Press to heart. There is a lot of posturing and gimmicks by the Universities.’
I agree with you that there is a lot of posturing going on but believe the BIS central planning assumption is that fees will average £7.5K and if I am correct in this then it is what Cable believes and isn’t just press speculation or unis cooking the books. Of course the DT reporters didn’t get round to discussing this particular point with Cable so, on past record, we can’t really be sure what he believes.
Of course I think it does slightly dent your ‘soft’ barrier at £6K. But perhaps you give the game away in a sense by saying that ‘cheap’ unis can be operated on fees less than £6K and private ones claim they can do it for £3K a year.
Well, dear me, I wonder if the government knows that the third or fourth tier of cheap unis could be run for half the price of our current second tier in tuition costs? Of course they do Uday – why do you think the Tories are carrying out this ideological privatisation programme?
I wonder if lecturers are looking forwards to being employed by the cut-price uni system – wonder what their wages and conditions will be like? Of course any that are outstanding will probably be able to move into the highest tier with better wages and conditions. Whither equality of opportunity then for FSM students ‘warehoused’ like battery hens in cheap privatised unis.
I am also not surprised that you seem to veer towards economic liberalism rather than the social variety in your support for the Tory policy of unleashing market forces.
We have a giant gamble going on with our uni system and I believe any non-partisan observer of the sector recognises that – it goes way beyond whether the repayment system is more progressive than the system to be scrapped in terms of poor students although I think we can accept the IFS conclusion that 30 per cent of students from the lowest income households will pay more under Cable than the system he is scrapping.
I see that you have produced another red herring or perhaps pigeon from a hat, like the UK housing comparison with Germany, with access to US unis. Just like housing you are not comparing like-with-like and I am surprised that you are not well aware of this especially in the funding differences.
I am also bemused that you refer to our system as ‘State-controlled Universities’. If only that were true then I would have no fears about much wider access by FSM and poor family background students to top universities.
Happy New Year to you EcoJon.
You said: “I am also not surprised that you seem to veer towards economic liberalism rather than the social variety in your support for the Tory policy of unleashing market forces.”
I am not “veering” towards anything. I am a liberal, both in the “economic” and “social” sense.
I know the American University system very well because I am an academic and I am from the US. It is not a “red herring” that the American private Universities provide extremely generous scholarships to students. It is a well-known fact. They can afford to do so because they charge astronomical fees to the rich students. The more interesting question is, why do they do it? I will let you ponder that question.
BIS uses 7.5K in their analysis because it is the average of 6K and 9K. There is nothing sinister about that figure. As I said, 6K is what the Universities are getting this year, and they will get less than that next year. (The budget has already been cut.) So they can certainly do it for 6K in 2012. After 2012, it will be indexed by inflation.
My guess is that at least a fifth of the Universities will stick to the 6K level. A good majority of them will set it around 7K. (It needs to cover the 2 year inflation and the cost of the national scholarship scheme.) But, over the next 5 years or so, more differentiation in the fee levels will take place.
“Uday Reddy”
As a liberal US academic please consider UK Universal Inheritance for all UK-born UK citizens at 25 financed by the reform of – with abolition of exemptions from – Inheritance Tax (see http://www.universal-inheritance.org) as a realistic way of students paying for tuition fees while others use it for other opportunities.
UK Universal Inheritance will reduce the increasingly dangerous inequality of ownership of wealth in our country. It is the party policy of the Liberal Party (www.liberal.org.uk) but I am coming to realise from lack of any response on LibDemVoice that it is too radical for LibDems these days, as they, or at any rate those who post on LibDemVoice, appear to have moved towards the inegalitarian right when it comes to the redistribution of wealth.
USA Universal Inheritance would be a good idea too, but I realise that “devil take the hindmost” USA is even further away from that sort of thing yet.
@Uday Reddy
Thank you for your good wishes and I wish you and your family a happy and healthy New Year.
Interesting link for me at: http://www.prospect.org/cs/articles?article=our_two_class_system and in particular the comment: ’29 percent of students whose families earn less than $40,000 a year said their 2009 college plans had changed because of the recession, compared with 16 percent from middle-class homes. Sticker shock kept many of them from applying to high-tuition schools despite the possibility of financial aid.’
So it appears, and I think we both agree on this, that the psychological block we have previously discussed is real for poorer students.’
So why do they do it. Well I suppose there are a number of reasons and in no particular order that unis and students have more money from a variety of sources always remembering that the USA spends a much higher percentage of its GDP on unis than the UK – latest figures I could find are 2.9 to 1.3.
I suppose the ‘needs blind’ approach is important as is the very strong pressures for inclusion of under-represented minorities and also the scholarships programmes for not just the academically gifted but for sports, music, community involvement etc and the financial support for children from poorer backgrounds and the wide-ranging panopoly of niche external scholarships.
There is also the hugely important ‘endowment’ factor. Company sponsorship is important as well as a huge range of other sponsorships. But do we really want to go down the American road of mammy or daddy getting their dense offspring into a top-class uni through endowment of their alma mater by alumni.
However ‘endowment’ can be a force for good and I note that Stanford uses $70m endowment income so that one in 10 of their students, with family income less than $60,000 a year, get full tuition fees, board and lodging paid by the university. Many more, whose family income is between $60,000 and $100,000, get full fees paid.
Also found the following an interesting snippet: ‘But a little known fact is that many British families would qualify for help from American universities because relatively the British are less well off than Americans. If the family income – after assessment for tax, medical expenses, the cost of elderly dependent relatives – is below $60,000 (£32,000), the student’s contribution to fees and accommodation, including an annual flight back home, will be precisely zero.
Students with a family income of £37,425 (the point at which British households are considered poor enough to qualify for grants) will be expected to pay only a few hundred pounds towards their education. Even a net family income of $120,000 (£64,000) still qualifies the student for some financial aid.’
I have no personal experience of the American uni system but the more I have looked in the last couple of days the more I see it is different which was my original gut feeling but I can also see how easy it would be for us to end up with the worst elements of it. I would also point out that my red-herring reference was general and not specific as you appear to assume.
Is there a warning for our FSM students looking at Arizona State Uni, hit especially hard by the economic downturn wherew the emphasis now is on boosting the number of out-of-state students (who pay triple the in-state tuition) to 40 percent, not providing more opportunities for poor students. So here in the UK we may well concentrate on foreign non-EEC students.
And is this the future for our second-tier unis: “The further you go down the hierarchy of prestige, the worse the effects,” writes Columbia University scholar Andrew Delbanco in The New York Review of Books. At teaching-oriented state schools the already-crushing teaching load has increased, fewer courses are offered, and classes are more crowded. Under those circumstances, getting a degree in four years has become almost impossible.”
And I love the author’s final line in http://www.prospect.org/cs/articles?article=our_two_class_system :The ultimate question is this: Can the public be persuaded that universities represent something as ineffable as the common good — that higher education contributes to the development of knowledgeable and responsible citizens, encourages social cohesion, promotes and spreads knowledge, increases social mobility, and stimulates the economy? Can the argument convincingly be made that universities offer something of such great value that they are worth subsidizing, even in the teeth of bottom-line pressures? ‘ Now where have I heard that recently – well not from the Tory Coalition that’s for sure
“EcoJon”
In a Liberal capitalist democracy there should be national Universal Inheritance – financed by inheritance taxes – for all national-born young adult citizens to be spent on tuition fees, which would help poorer and other students, business start up, deposits for home ownership or whatever.
@EcoJon
Thanks for continuing the debate, EcoJon. I am also glad that you have taken some time to research the American University system a lot more.
I think “sticker shock” is a very good term for this. That is what the British students are currently going through. The solution for that is education and publicity. I am sure that will happen in course of time. Every University will print the details of the repayment scheme and estimates of how much the graduates will pay and when, as part of their University brochures. There will be newspaper articles, TV shows, finance web sites and higher education web sites which will explain it, and so on. This game has only just begun. Despite their claims, I don’t think the student protesters have anything nearing a full grasp of the impact of the new system. All they understand is that they are being asked to pay more and they don’t like it. Little do they know that they are arguing for continued subsidies for the rich.