Tuition fees
Oct. 24th, 2010 05:03 pm![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
strange_raptorsSo, the budget ... unsurprisingly regressive (unsurprising because it's the Tories and people seem to have forgotten after 12 years of Labour that budgets can be like this), except for a few cases, and one case in particular -- tuition fees.
Unfortunately this government, like the previous government, has completely messed up the marketing of loans and all the usual rhetoric from the newspapers and the NUS has sprung up about the huge amount of debt hanging round the poor necks of the students. I'm rather fed up of reading it, and so many people seem to be misinformed about university funding that I've decided to set out the facts in this post. I'll happily debate any of the points in comments.
1) Tuition fees are unfair -- Universities require funding, most of which comes from the government, in order to do the things that universities do (e.g. teach students, pay researchers, provide facilities). As this funding comes from the government, people who pay taxes provide the money for this. In order to get more money, universities also charge tuition fees to students. Students often get loans from the government to pay these tuition fees (so the universities get money from the government in multiple ways), but they are expected to pay these loans back once they start earning money. If there were no tuition fees, a large proportion of the population would be paying for the rest to go to university. However, with tuition fees, the people who have gone to university and who have benefited from this experience pay more than the people who have not. This, it seems to me, is a pretty fair system.
2) Tuition fees are debt -- It is true that throughout university, and after you finish, you are presented with statements which show how much you've borrowed from the government in loans, and that you are expected to pay this back at some point. In this way it is like debt, but only in this way.
3) Increases in fees will put off students from poor backgrounds going to university -- There has been no evidence so far to suggest that this is the case (university participation has been going up year on year despite the introduction and increase of tuition fees). However, nothing puts off students from poor backgrounds more than a load of newspapers and the NUS spreading misinformation and rhetoric about tuition fees.
4) Tuition fees are regressive -- It's true that graduates who get high paying jobs will pay their student loan off quicker than those graduates who get lower paying (but still above the £15,000 threshold) jobs. That's why the government is proposing that graduates who get high paying jobs should pay a higher rate of interest than those with lower paying jobs. They're also proposing to increase the repayment threshold to £21,000 -- going back to our earlier example, the graduate who was paying £450 a year will now pay nothing, whilst a graduate who earns £25,000 will only pay the 9% on £4000, rather than on £10,000 (so £360 a year, rather than £900). As well as these truly progressive measures, they're increasing the repayment time from 25 years to 30 years -- this means that graduates with middling incomes will end up paying more, because they'll be paying for longer. However, they're expecting that only the richest 40% of graduates will pay off the full "debt", whilst the poorest 20% of graduates will pay less than in the current system.
5) A graduate tax would be better -- Tuition fees are effectively a graduate tax, but instead of paying more than your education was worth, you pay the amount it was worth. Like the best taxes, people who earn more pay more, whilst those who earn very little pay nothing. Ignoring these important points, there are various logistical difficulties with a graduate tax to do with EU students, however I think that pales into insignificance when the current system is viewed as a vast improvement on a graduate tax.
It leaves me feeling sick in my stomach to defend the Tories and the coalition government in such a way, especially given all the other stupidly regressive measures in the budget. There are plenty of things to complain about -- the welfare cuts, the lack of an equality assessment, AHSS funding -- but please, please not the tuition fees.
Unfortunately this government, like the previous government, has completely messed up the marketing of loans and all the usual rhetoric from the newspapers and the NUS has sprung up about the huge amount of debt hanging round the poor necks of the students. I'm rather fed up of reading it, and so many people seem to be misinformed about university funding that I've decided to set out the facts in this post. I'll happily debate any of the points in comments.
1) Tuition fees are unfair -- Universities require funding, most of which comes from the government, in order to do the things that universities do (e.g. teach students, pay researchers, provide facilities). As this funding comes from the government, people who pay taxes provide the money for this. In order to get more money, universities also charge tuition fees to students. Students often get loans from the government to pay these tuition fees (so the universities get money from the government in multiple ways), but they are expected to pay these loans back once they start earning money. If there were no tuition fees, a large proportion of the population would be paying for the rest to go to university. However, with tuition fees, the people who have gone to university and who have benefited from this experience pay more than the people who have not. This, it seems to me, is a pretty fair system.
2) Tuition fees are debt -- It is true that throughout university, and after you finish, you are presented with statements which show how much you've borrowed from the government in loans, and that you are expected to pay this back at some point. In this way it is like debt, but only in this way.
- Unlike debt, it does not affect your credit rating.
- Unlike debt, there is no real interest charged on it. Instead the debt rises with inflation -- so you continue paying the real value for your education.
- Unlike debt, you are not expected to pay it whether you can afford to or not. You begin repaying your student loan after you earn over £15,000. Above this you pay 9% of what you earn each year until you have repaid the debt. This means that if you are earning £20,000, you only pay the 9% on £5000 -- so £450 a year.
- Unlike debt, your balance is completely wiped after 25 years.
3) Increases in fees will put off students from poor backgrounds going to university -- There has been no evidence so far to suggest that this is the case (university participation has been going up year on year despite the introduction and increase of tuition fees). However, nothing puts off students from poor backgrounds more than a load of newspapers and the NUS spreading misinformation and rhetoric about tuition fees.
4) Tuition fees are regressive -- It's true that graduates who get high paying jobs will pay their student loan off quicker than those graduates who get lower paying (but still above the £15,000 threshold) jobs. That's why the government is proposing that graduates who get high paying jobs should pay a higher rate of interest than those with lower paying jobs. They're also proposing to increase the repayment threshold to £21,000 -- going back to our earlier example, the graduate who was paying £450 a year will now pay nothing, whilst a graduate who earns £25,000 will only pay the 9% on £4000, rather than on £10,000 (so £360 a year, rather than £900). As well as these truly progressive measures, they're increasing the repayment time from 25 years to 30 years -- this means that graduates with middling incomes will end up paying more, because they'll be paying for longer. However, they're expecting that only the richest 40% of graduates will pay off the full "debt", whilst the poorest 20% of graduates will pay less than in the current system.
5) A graduate tax would be better -- Tuition fees are effectively a graduate tax, but instead of paying more than your education was worth, you pay the amount it was worth. Like the best taxes, people who earn more pay more, whilst those who earn very little pay nothing. Ignoring these important points, there are various logistical difficulties with a graduate tax to do with EU students, however I think that pales into insignificance when the current system is viewed as a vast improvement on a graduate tax.
It leaves me feeling sick in my stomach to defend the Tories and the coalition government in such a way, especially given all the other stupidly regressive measures in the budget. There are plenty of things to complain about -- the welfare cuts, the lack of an equality assessment, AHSS funding -- but please, please not the tuition fees.