Comment: Why shouldn’t students pay more for their education?

At the Liberal Democrat spring conference in the north east last weekend it was clear the party is still suffering a big hit in popularity from its role in the introduction of increased tuition fees.

Although that is understandable, given their previous pledge that fees would not increase, in the end they had no real choice. The alternative was a large tax hike, something that would have been even more unpopular than the new fees regime and arguably even more unfair.

Why shouldn’t students pay for their increased earning potential? The stats are well known that a degree boosts earning power over the length of a career, by a not insignificant amount.

The media are culpable for the way they have covered the story. There is so much misinformation on the all the networks and in the press, horror stories about debt and never being able to get on the housing ladder.

In fact a student graduating under the new regime will have more free income and will be paying back less per month than students graduating today.

That is because the threshold for paying anything back is £21,000, rather than £15,000 at present. And even better, before you start earning that amount you will pay no interest at all on your debt.

Yes, a student graduating in 2015 will be in debt for longer than those of today, in fact many will probably never pay it all off, and they will suffer no penalty for that. In that case its basically free money, or as close to free money as you are going to get.

It is not real debt in the traditional sense. The Student Loans Company will never send the bailiffs round, in fact it is impossible to miss payments. And the only impact it will have on your ability to get a mortgage is the reduced monthly income from the repayments.

This is a graduate tax by another name.

The real battle is to stop this affecting the successful widening participation initiatives started by many universities in recent years. And that is where the mainstream media has been so culpable. Scare stories could and arguably already have put off those who are undecided about furthering their education.

A student coming out of uni after a three year course is likely to have debts of £40,000. It is understandable that people are concerned but the increased fess have also freed up cash for extra bursaries and grants.

The Lib Dems and the coalition have made the best of a bad job, now the media needs to buck its ideas up.

But what do you think? Post your comments below

One thought on “Comment: Why shouldn’t students pay more for their education?”

  1. Dan says:

    Agreed – the media are badly informed over tuition fees. It’s a joke.

    As you say, the new fees are a better deal for low earners. Now, if you’re earning £25k, you repay £75 per month. Under the new regime, you’d be repaying £30. Over the long-term, it’s only the high earners who will repay their debts in full – essentially creating a top-level tax-like revenue that will bankroll the entire scheme. It remains to be seen how sustainable this will be, but it will certainly hit the mid-level earners hardest – those earning £30k–£50k for the duration of their careers will inevitably end up asking themselves how responsible their university education was for their middling success (especially when paying a premium on their loan – inflation rate + 3% is not a bad deal, but it’s certainly not “free money”).

    So universities will need to be more accountable for the quality of their degrees, and prove they’re a worthwhile investment of money and time for students. At least the public backlash is encouraging them to do it sooner.

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