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

General Cover Teacher

£120 - £125 per day: Randstad Education Luton: Are you looking for part time/ ...

SEN (SLD/PMLD) Teacher

£120 - £130 per day: Randstad Education Chelmsford: Are you a quailed Teacher ...

General Cover Teacher

£120 - £125 per day: Randstad Education Luton: Currently looking for teachers ...

SEN Teaching Assistant Runcorn

£50 per day: Randstad Education Cheshire: SEN Teaching Assistant EBD , Septemb...

Day In a Page

Read Next
 

Theresa May doesn’t get it - banning ideas we don’t like is to suggest that we are frightened of them

Mike Harris
David Cameron gives his keynote speech to the Conservative party conference in Birmingham  

Conservative Party Conference: Here's what David Cameron said in his speech…and what he meant

John Rentoul
Ebola outbreak: The children orphaned by the virus – then rejected by surviving relatives over fear of infection

The children orphaned by Ebola...

... then rejected by surviving relatives over fear of infection
Pride: Are censors pandering to homophobia?

Are censors pandering to homophobia?

US film censors have ruled 'Pride' unfit for under-16s, though it contains no sex or violence
The magic of roundabouts

Lords of the rings

Just who are the Roundabout Appreciation Society?
Why do we like making lists?

Notes to self: Why do we like making lists?

Well it was good enough for Ancient Egyptians and Picasso...
Hong Kong protests: A good time to open a new restaurant?

A good time to open a new restaurant in Hong Kong?

As pro-democracy demonstrators hold firm, chef Rowley Leigh, who's in the city to open a new restaurant, says you couldn't hope to meet a nicer bunch
Paris Fashion Week: Karl Lagerfeld leads a feminist riot on 'Boulevard Chanel'

Paris Fashion Week

Lagerfeld leads a feminist riot on 'Boulevard Chanel'
Bruce Chatwin's Wales: One of the finest one-day walks in Britain

Simon Calder discovers Bruce Chatwin's Wales

One of the finest one-day walks you could hope for - in Britain
10 best children's nightwear

10 best children's nightwear

Make sure the kids stay cosy on cooler autumn nights in this selection of pjs, onesies and nighties
Manchester City vs Roma: Five things we learnt from City’s draw at the Etihad

Manchester City vs Roma

Five things we learnt from City’s Champions League draw at the Etihad
Martin Hardy: Mike Ashley must act now and end the Alan Pardew reign

Trouble on the Tyne

Ashley must act now and end Pardew's reign at Newcastle, says Martin Hardy
Isis is an hour from Baghdad, the Iraq army has little chance against it, and air strikes won't help

Isis an hour away from Baghdad -

and with no sign of Iraq army being able to make a successful counter-attack
Turner Prize 2014 is frustratingly timid

Turner Prize 2014 is frustratingly timid

The exhibition nods to rich and potentially brilliant ideas, but steps back
Last chance to see: Half the world’s animals have disappeared over the last 40 years

Last chance to see...

The Earth’s animal wildlife population has halved in 40 years
So here's why teenagers are always grumpy - and it's not what you think

Truth behind teens' grumpiness

Early school hours mess with their biological clocks
Why can no one stop hackers putting celebrities' private photos online?

Hacked photos: the third wave

Why can no one stop hackers putting celebrities' private photos online?