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The government’s higher education policy is an omnishambles

Tuition fees is a political issue that refuses to disappear – and quite rightly too. The decision to increase tuition fees appears to be an increasingly misjudged and flawed one, particularly when compared to the arguments made for it. When tuition fees were trebled in 2010, we were told it was necessary on two grounds. First, that it was a much-needed step towards the overall aim of deficit reduction and second that although it would mean students would pay more for their education, at least it would provide a financially stable future for our universities. Over three years later and both of these justifications appear increasingly hollow.

Trebling tuition fees has failed to establish sustainable funding for higher education. The government’s own figures now predict that a shocking 45% of graduates will not earn enough to fully repay their student loans. Furthermore, the consultancy firm, London Economics, predicts that if that figure reaches 48.6%, then the government will actually lose more money than it gained by increasing tuition fees in England to £9,000 a year. Perversely, then, we are now in a situation where we are within a 3.6% margin where the new system would be costing the same as the old one, for the government at least.

How is this possible when students are paying 300% more for their education? The decision that students only begin to pay back their loans after they start earning over £21,000 a year is crucial to this. The problem is that at the time of the tuition fees rise the government estimated that 28% of loans would never be paid back in full. However, because of the continuing problems with the economy, the well-paid jobs for graduates which are meant to help them repay their loans are not on course to materialise.  Consequently, the government has revised upward their figure to 45%, changing the result of the state’s equation dramatically.

Even with the government reluctantly writing off a significant proportion of student loans, many people would argue higher education remains underfunded. This was evidenced in October of 2013, when the vice chancellor of this very university suggested that tuition fees should rise to £16,000 for Oxford students, in order to release the £70 million spent annually by Oxford University, in addition to student paid fees, on the cost of tuition to be spent elsewhere.  

The second major justification for the trebling of tuition fees was the desire of the government to make cuts to the higher education budget. This was part of a coalition narrative of making tough choices that it claimed were financially responsible. However, the subsequent behaviour of the government in the sale of the student loan book, which it has begun selling far below its real value, demonstrates the inconsistent application of this principle.

The truth of the matter is the reason tuition fees were trebled is the same reason why the student loan book is being sold off at a knockdown price – to try and balance the books, quickly. Both efforts appear to be rather botched attempts at doing so. For example, in November of 2013, the government sold £890 million worth of student loans for £160 million to a debt management consortium. The sell-off of the student loan book is something all the main political parties have wanted to do for quite a while, with the 2008 Sale of Student Loans Act, paving the way for the Business Secretary to authorise sales from the student loan book.

The consequences of students not engaging with the issues surrounding higher education are already on display  in the United States. American students are actively used as a source of profit by the US government.  According to the US Government Accountability Office, the US government charges American students nearly twice the interest rate necessary to cover the cost of their student loan program without making a profit. With the Congressional Budget Office estimating that the US government stands to make $184 billion off graduates in the next 10 years.  These profits are not reinvested into the US student loan program – they are not even reinvested in education, but are spent by the government on everything from weapons to corporate welfare.  Without engagement on these issues, the British higher education system risks ending up in a similar state.  

The policy that the government has instituted is clearly flawed and the justifications made for the policy have not been lived up to. What we should take away from this is that the future of higher education is far from secure and that changes to it will need to be made – changes which students should aim to be fundamentally involved in. All told, the question of how we fund our universities remains far from resolved. 

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