Amid some stiff competition, university tuition fees is one of the more misrepresented areas of public policy. When fees were increased to a maximum of £9,000 per year soon after the Coalition took office, opposition was so vehement that there were demonstrations in the streets. Critics talked furiously of students saddled with tens of thousands of pounds in unsustainable debts and of youngsters from poorer backgrounds being in effect barred from tertiary education altogether.
Two years on, however, there is no evidence that university is any more of a preserve of the wealthy than it was. Indeed, why should it be? After all, there is no up-front charge. The debt only becomes due once the graduate has a salary of more than £21,000, and even then, payments are in carefully managed, tax-free increments.
With all eyes on the election, despite its being more than 12 months away, tuition fees are back on the agenda. Ed Miliband has hinted before that Labour would go some way to reversing the Coalition’s unpopular policy. On Sunday, Douglas Alexander, the shadow Foreign Secretary and campaign co-ordinator, confirmed that a pledge to lower the ceiling to £6,000 per year would feature in the party’s manifesto.
There is some smart politics here. The opposition focus on the “squeezed middle” has lost some of its traction in recent weeks – in part because of signs of economic improvement and in part thanks to the pension reforms unveiled in the Budget. The hope is that an apparently generous commitment to students will not only appeal to middle-income voters but will also give Labour an extra edge over the Liberal Democrats, whose nadir in popularity came with the volte-face on university fees.
In practice, though, Labour’s scheme has little to recommend it. There are areas of concern over tuition fees. Naysayers’ predictions about poorer students put off studying may not have materialised, but uncertainty about the cost to the Government is increasing. Under the old system, around 28 per cent of student loans were never repaid. The new system was specifically designed to ease the burden on the taxpayer, but if the proportion of written-off debt rises above about 48 per cent, the Treasury will end up paying more. And the latest estimates have bad debts now running at 45 per cent. Hence Mr Alexander’s manifesto-flashing.
Still, Labour’s solution is the wrong one. First, no sensible conclusions about the current policy can be drawn until the stagnant wages and relative dearth of graduate jobs caused by the financial crisis have abated. But the central concern is about equity. Lowering student fees will not reduce the cost of teaching a degree, and nor would we want it to; tertiary education is expensive for a reason and Britain’s universities are among the best in the world. If students are to pay less – by perhaps £1.7bn a year, according to some analyses of Labour’s plans – taxpayers must make up the shortfall. Yet how can it possibly be fair for those without a university degree to stump up for the income-boosting education of those who do?
There may, indeed, be questions about the tuition-fees system as is. But letting students off the hook in order to more securely wedge everyone else on to it is no kind of answer.