England will have the most expensive university degrees in the world,
Transferring the cost of a university education from state to student to plug the coalition’s £3 billion cut in public spending will create a market in higher education - course against course, department against department, university against university.
With fees at £6000, when student cost loans and commercial-style interest payments are included, a three-year degree will cost a massive £38,000. With fees at £9,000 a three-year degree would cost an incredible £68,000, says Sally Hunt of the University and College Union
Students from lower and middle income families who aren't put off by enormous debt will make their choices based solely on cost and the benefit of a course in the job market.
Unpopular courses and departments will close. It will become almost impossible to develop courses in new areas of knowledge without directly perceived economic benefit. These proposals will weaken the country's position as a global knowledge centre, pumping out invaluable research.
This is a savage attack on what a university is and what it can offer and effectively privatises the cost of higher education from state to family. It will create a divided sector where some universities become bastions of privilege offering a wide range of academic subjects, and others churn out debt-ridden graduates in limited vocational fields.
If they support these proposals, the Liberal Democrat Party will have done a U-turn that the electorate will not be able to forgive and forget.
Why a Graduate Tax? - It looks as if Labour is considering adopting a Graduate Tax as official policy.
A graduate tax would remove tuition fees entirely and would tax higher education graduates on the basis of their income; repaying according income ie. The ‘value’ to the graduate of their qualification in the workplace.
A graduate tax could be levied only on income in excess of a certain amount, for example, £15,000 or £21000 and could be levied for a time limit of 25 years like the present loans.
A graduate tax could be collected by Revenue and Customs through the PAYE system. While there is a possibility of tax-avoidance, especially by the self-employed, it is estimated by London Finance that it is unlikely to be more than under the present tuition fees system.
High earners are likely to pay more. However, this is not a deterrent to study in the first place
The clear advantage of a graduate tax – compared to an increase in tuition fees, is that it is based on what a graduate achieves after study while an increase in tuition fees is a charge levied before university.
Under a graduate tax system, universities would receive income direct from government. The level of a graduate tax would be related to the funding required, and the extent government is prepared to invest in HE
The Exchequer would be no worse off than under the current system, this is confirmed by economic modelling published in a report by university think-tank million+ in association with London Economic. If a 1% graduate tax were levied, universities would receive the funding as currently available. A graduate tax of 2.4% would give universities an extra £3.1 billion each year.
A graduate tax would be more progressive in contrast to the impact of fees. This is confirmed by the Million+ report.
The use of a graduate tax to fund higher education does pose wider questions including the relationship between universities and government and whether and to what extent fees provide greater institutional freedom.
Conversely, in the event that the fee cap is raised, differential fees may create greater inequality in resources available to institutions, whose ability to increase fees is intrinsically linked to the social profile of their student body.
However the proposal to raise fees opens the way for a market in higher education. So-called elite universities would charge the most. HE will probably end up with a two tier, or even three-tier provision, eventually with some universities eventually becoming private institutions. As private institutions they would claim to be world class, attract the most highly qualified students, large private and corporate donations and the bulk of the most profitable research. The third tier would be teaching only universities with diminishing prestige.
It is clear that the Government's proposals are ideologically driven, and are the first step towards a form of patchwork privatisation. Compare the policy on academies and free schools in the secondary sector.
As Will Hutton comments in The Observer on 14 November…
“Students are right to protest. These are not fees to raise the investment in our universities and make the student experience even better, an imperative financial innovation now that nearly half of our young people go to college. They are being trebled in two years because of the risible proposition that the country is going bankrupt and so public expenditure has to fall by 8% of GDP over four years.
The trebled fees are not to lead to more investment in higher education; they will only mitigate what would otherwise been a disaster.
Students now face leaving university with £60,000 of debts but with no improvement and probably deterioration in the quality of higher education being offered. Some are talking of studying in English language universities in Holland and Scandinavia, where tuition fees are only £6,000 over three years. Others are going to the US. Others are not going at all.”
