Tag Archives: student debt

David Thorpe

The economic consequences of tuition fees 

By David Thorpe | Mon 27th July 2015 - 2:36 pm

 

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

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

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

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

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

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