Only the introduction of tuition fees can solve the university funding crisis

Share
Related Topics

The proposals on the funding of higher education unveiled yesterday by Tim Collins, the shadow Education Secretary, have been designed to please everyone at once. According to the Conservatives, under their plans students would come out of the higher education system unburdened by colossal debts, universities would enjoy a fresh source of revenue and the general public would not be asked to pay more taxes to bail out an over-stretched higher education sector. In theory, everyone would be a winner.

The proposals on the funding of higher education unveiled yesterday by Tim Collins, the shadow Education Secretary, have been designed to please everyone at once. According to the Conservatives, under their plans students would come out of the higher education system unburdened by colossal debts, universities would enjoy a fresh source of revenue and the general public would not be asked to pay more taxes to bail out an over-stretched higher education sector. In theory, everyone would be a winner.

Unfortunately, Mr Collins' plan, which is based around the abolition of tuition fees and raising the interest rate on student loans, does not stand up to close scrutiny. It would leave the basic problem of higher education funding unresolved. While few students would lament the end of tuition fees, they might well find higher loan costs a comparable burden.

At the moment, students can take out special loans, underwritten by the Government, to cover their living costs. These were introduced to help compensate for the phasing out of the student grant and are separate from the loans students can take out to cover the cost of tuition fees. These special loans accrue interest only at the rate of inflation, which makes them a cheap form of borrowing. The Tory plan to charge a commercial rate of interest on these loans would substantially increase the costs of repayment. It is true that, in the absence of tuition fees, the average student would leave university with smaller debts overall, but it is important to remember that poorer students tend to take a greater number of student loans. Those from more prosperous backgrounds often get financial help from their parents to meet their living costs. No doubt this trend would increase if the interest rate on loans went up. The result would be a system that effectively penalised poorer students.

Universities would also not be as well served as at first appears. The Tory proposals would place the administration of the student loans system in the hands of the universities, which would constitute a significant financial burden in itself. And the calculation that this method of funding would raise £20bn over the next 20 years for the universities is over optimistic, given that students would be discouraged from taking out this form of finance by the higher interest rate.

By contrast, the Government's variable university fees Bill, which was squeezed through the Commons with the slimmest of majorities, would guarantee universities a reliable stream of income. And by permitting different institutions to charge different fees, it would enable students to make a judgement about the value of an academic course. The Tories' proposals would allow none of these things.

Despite the myopia of the Liberal Democrats and the Conservatives on this issue, tuition fees are a progressive measure. Although unpopular in many households, they are a crucial step in setting universities on a sound financial footing, and breaking their dependence on the largesse of central government, which has been so damaging over the years.

And it is fundamentally right that those who reap the financial benefits of a university education should pay for it. Those who claim that the prospect of substantial debts puts poorer students off going to university too often disregard the fact that debts will only be paid off after graduation, and when someone starts earning more than a certain amount. They also disregard the fact that unless universities stabilise their finances, it will be future students who pay the highest price.

There is a justified debate about where to set the limits on tuition fees, and what proportion of their cost should fall on the state and the student, but the principle is attracting more support. Mr Collins' proposals are an imaginative attempt to square the circle, but there is nothing in them to suggest that they constitute any practical alternative to allowing the universities of the land to charge fees for their services.

React Now

Latest stories from i100
iJobs Job Widget
iJobs General

Ashdown Group: UI Developer - (UI, HTML, CSS, JavaScript, AngularJS)

£25000 - £40000 per annum: Ashdown Group: UI Developer - (UI, JavaScript, HTML...

Ashdown Group: Graduate UI Developer - HTML, CSS, Javascript

£25000 - £30000 per annum: Ashdown Group: Graduate UI Application Developer - ...

Ashdown Group: B2B Marketing Manager - Events, Digital, Offline

£45000 - £50000 per annum: Ashdown Group: B2B Marketing Manager (Events, Digit...

Guru Careers: Senior Account Manager / SAM

£30 - 35k: Guru Careers: A Senior Account Manager / SAM is needed to join the ...

Day In a Page

Read Next
 

Daily catch-up: Liz Kendall speaks to the Westminster press pack – kamikaze or courage?

John Rentoul
Ukraine’s hope of a future with the West has ended with death and annexation in the east  

Ukraine’s tragedy casts a pall over the EU summit

Mary Dejevsky
Is a quiet crusade to reform executive pay bearing fruit?

Is a quiet crusade to reform executive pay bearing fruit?

Dominic Rossi of Fidelity says his pressure on business to control rewards is working. But why aren’t other fund managers helping?
The King David Hotel gives precious work to Palestinians - unless peace talks are on

King David Hotel: Palestinians not included

The King David is special to Jerusalem. Nick Kochan checked in and discovered it has some special arrangements, too
More people moving from Australia to New Zealand than in the other direction for first time in 24 years

End of the Aussie brain drain

More people moving from Australia to New Zealand than in the other direction for first time in 24 years
Meditation is touted as a cure for mental instability but can it actually be bad for you?

Can meditation be bad for you?

Researching a mass murder, Dr Miguel Farias discovered that, far from bringing inner peace, meditation can leave devotees in pieces
Eurovision 2015: Australians will be cheering on their first-ever entrant this Saturday

Australia's first-ever Eurovision entrant

Australia, a nation of kitsch-worshippers, has always loved the Eurovision Song Contest. Maggie Alderson says it'll fit in fine
Letterman's final Late Show: Laughter, but no tears, as David takes his bow after 33 years

Laughter, but no tears, as Letterman takes his bow after 33 years

Veteran talkshow host steps down to plaudits from four presidents
Ivor Novello Awards 2015: Hozier wins with anti-Catholic song 'Take Me To Church' as John Whittingdale leads praise for Black Sabbath

Hozier's 'blasphemous' song takes Novello award

Singer joins Ed Sheeran and Clean Bandit in celebration of the best in British and Irish music
Tequila gold rush: The spirit has gone from a cheap shot to a multi-billion pound product

Join the tequila gold rush

The spirit has gone from a cheap shot to a multi-billion pound product
12 best statement wallpapers

12 best statement wallpapers

Make an impact and transform a room with a conversation-starting pattern
Paul Scholes column: Does David De Gea really want to leave Manchester United to fight it out for the No 1 spot at Real Madrid?

Paul Scholes column

Does David De Gea really want to leave Manchester United to fight it out for the No 1 spot at Real Madrid?
Season's finale brings the end of an era for top coaches and players across the continent

The end of an era across the continent

It's time to say farewell to Klopp, Clement, Casillas and Xavi this weekend as they move on to pastures new, reports Pete Jenson
Bin Laden documents released: Papers reveal his obsession with attacking the US and how his failure to keep up with modern jihad led to Isis

'Focus on killing American people'

Released Bin Laden documents reveal obsession with attacking United States
Life hacks: The innovations of volunteers and medical workers are helping Medécins Sans Frontières save people around the world

Medécins Sans Frontières's life hacks

The innovations of volunteers and medical workers around the world are helping the charity save people
Ireland's same-sex marriage vote: As date looms, the Irish ask - how would God vote?

Same-sex marriage

As date looms, the Irish ask - how would God vote?
The underworld is going freelance: Why The Godfather's Mafia model is no longer viable

The Mafia is going freelance

Why the underworld model depicted in The Godfather is no longer viable