There is no ‘unishambles’ in education

The Minister of Universities and Science defends his reforms to student fees

Share

A new report from the Higher Education Policy Institute (Hepi) shows there is a “unishambles”, this newspaper claimed yesterday on its front page. Nice headline – shame about the spin. This Government’s university reforms are putting a new focus on the student experience, promoting opportunity and helping reduce the public deficit. Hepi argues that they won’t save a penny, but the evidence says they will.

The contribution from graduates (not students) will rise from around 40 per cent of the costs to 60 per cent. The contribution from taxpayers will fall – though they will still fund maintenance grants and the extra costs of more expensive courses. This means we achieve a treble. We tackle the deficit in the public finances. We ensure our universities have the resources they need for world-class teaching. And we deliver more support to students from under-represented groups, which will support social mobility.

The OECD and the Institute for Fiscal Studies (IFS) agree our reforms will save money. But Hepi says any savings are illusory and that the new system could be “more expensive than the one it has replaced”. Around 40p of every £1 loaned to students will never be repaid, they argue, because graduates will not earn enough to make the repayments, which are set at 9 per cent of salary above £21,000. In contrast, we have set the write-off figure closer to 30p.

Our estimates have been checked by the Office for Budget Responsibility. Such long-term estimates depend on a wide range of variables but we estimate that the earnings trajectory of graduates will grow by 1.3 per cent a year, which seems reasonable given the demand for highly skilled people. We stand by our figures and do not accept Hepi’s modelling.

First, we are actually in the middle of a range of forecasts. While Hepi claims we have underestimated the write-off costs, others claim we have over-estimated them. We use a long-term planning assumption that the Government borrows at an interest rate of 2.2 per cent. The borrowing rate is currently lower than this so other economists argue we are actually exaggerating the public cost of each student.

The study also muddles up fees and loans. They claim our figures are wrong because the average tuition fee of £8,200 is somewhat higher than our estimate for the average tuition loan of £7,600. But students are not obliged to take out a loan for the entirety of their course. The cost to government is the average loan multiplied by the number of students with a loan, not the average fee multiplied by the total number of students.

As with all long-range estimates, we accept there is a margin of error. But Hepi assumes the worst outcome for taxpayers on pretty much every variable it assesses, while ignoring other variables altogether. Our reforms are about much more than saving money. They are also designed to put students at the heart of the university system. Our estimates and our approach were described to me by the OECD recently as a textbook example of how to reform higher education. We stand by them.

React Now

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

Argyll Scott International: Senior Business Analyst- Insurance

Negotiable: Argyll Scott International: Senior Business Analyst - Insurance ...

Recruitment Genius: Property Manager

£25000 - £29000 per annum: Recruitment Genius: This independent, growing Sales...

Recruitment Genius: Graphic Designer

£16000 - £20000 per annum: Recruitment Genius: Multi-skilled graphic designer ...

Austen Lloyd: Court of Protection Solicitor

£30000 - £50000 per annum + EXCELLENT: Austen Lloyd: Court of Protection Solic...

Day In a Page

Read Next
A CCTV camera is seen in front of a large poster opposite in central London  

Home Office is creating more powers to turn everyone into suspects – but leave us no safer

Shami Chakrabarti
 

David Mellor has been exposed as an awful man, but should he have been?

Simon Kelner
Cameron, Miliband and Clegg join forces for Homeless Veterans campaign

Cameron, Miliband and Clegg join forces for Homeless Veterans campaign

It's in all our interests to look after servicemen and women who fall on hard times, say party leaders
Millionaire Sol Campbell wades into wealthy backlash against Labour's mansion tax

Sol Campbell cries foul at Labour's mansion tax

The former England defender joins Myleene Klass, Griff Rhys Jones and Melvyn Bragg in criticising proposals
Nicolas Sarkozy returns: The ex-President is preparing to fight for the leadership of France's main opposition party – but will he win big enough?

Sarkozy returns

The ex-President is preparing to fight for the leadership of France's main opposition party – but will he win big enough?
Is the criticism of Ed Miliband a coded form of anti-Semitism?

Is the criticism of Miliband anti-Semitic?

Attacks on the Labour leader have coalesced around a sense that he is different, weird, a man apart. But is the criticism more sinister?
Ouija boards are the must-have gift this Christmas, fuelled by a schlock horror film

Ouija boards are the must-have festive gift

Simon Usborne explores the appeal - and mysteries - of a century-old parlour game
Can SkySaga capture the Minecraft magic?

Can SkySaga capture the Minecraft magic?

It's no surprise that the building game born in Sweden in 2009 and now played by millions, has imitators keen to construct their own mega money-spinner
Christmas 2014: 23 best women's perfumes

Festively fragrant: the best women's perfumes

Give a loved one a luxe fragrance this year or treat yourself to a sensual pick-me-up
Homeless Veterans Christmas Appeal: Drifting and forgotten - turning lives around for ex-soldiers

Homeless Veterans Christmas Appeal: Turning lives around for ex-soldiers

Our partner charities help veterans on the brink – and get them back on their feet
Putin’s far-right ambition: Think-tank reveals how Russian President is wooing – and funding – populist parties across Europe to gain influence in the EU

Putin’s far-right ambition

Think-tank reveals how Russian President is wooing – and funding – populist parties across Europe to gain influence in the EU
Tove Jansson's Moominland: What was the inspiration for Finland's most famous family?

Escape to Moominland

What was the inspiration for Finland's most famous family?
Nightclubbing with Richard Young: The story behind his latest book of celebrity photographs

24-Hour party person

Photographer Richard Young has been snapping celebrities at play for 40 years. As his latest book is released, he reveals that it wasn’t all fun and games
Michelle Obama's school dinners: America’s children have a message for the First Lady

A taste for rebellion

US children have started an online protest against Michelle Obama’s drive for healthy school meals by posting photos of their lunches
Colouring books for adults: How the French are going crazy for Crayolas

Colouring books for adults

How the French are going crazy for Crayolas
Jack Thorne's play 'Hope': What would you do as a local politician faced with an impossible choice of cuts?

What would you do as a local politician faced with an impossible choice of cuts?

Playwright Jack Thorne's latest work 'Hope' poses the question to audiences
Ed Harcourt on Romeo Beckham and life as a court composer at Burberry

Call me Ed Mozart

Paloma Faith, Lana del Ray... Romeo Beckham. Ed Harcourt has proved that he can write for them all. But it took a personal crisis to turn him from indie star to writer-for-hire