Wednesday, 8 December 2010

Fairness in Higher Education!

Tomorrow's tuition fees debate in the House of Commons is something of an unexpected event. When the coalition took power in May, we were still awaiting the Browne Report on the future of funding for higher education in England, Wales and Northern Ireland. yet as soon as it was published in October, the rows started, especially once it was announced tuition fees would at least double, and the Liberal Democrats were all revealed to have pledged to vote against any such measure.

The subject has been a troublesome one, ever since 1990 when the Student Loans Company was established under the Major government. In those days it was as extra assistance to help less well off students with maintenance costs. So when in 1998 tuition fees arrived, to many it probably wasn't a surprise.

The Prime Minister, John Major, instigated the Dearing Report to investigate the funding of higher education for the next twenty years. The report made some 93 recommendations, but key was one that a means tested tuition fee was set, and the then Education Secretary David Blunkett, introduced a £1,000 a year fee (about 25% of the cost) in his Bill in 1998, following the abolition of the grant.

It is often said that Labour broke a pledge not to introduce tuition fees. Yet in an interview before the 1997 election Tony Blair said that, "Labour has no plans to introduce tuition fees for higher education." Semantic games perhaps, but no worse than Michael Heseltine's not having any plans to challenge Margaret Thatcher from 1986-90.

The Labour manifesto in 1997 actually said:

The improvement and expansion needed cannot be funded out of general taxation. Our proposals for funding have been made to the Dearing Committee, in line with successful policies abroad. The costs of student maintenance should be repaid by graduates on an income-related basis, from the career success to which higher education has contributed. The current system is badly administered and payback periods are too short. We will provide efficient administration, with fairness ensured by longer payback periods where required.

So at no stage did Labour say tuition fees would not be introduced, but room for the possibility existed, stating they believed that general taxation would not be sufficient to fund the expansion needed. It was suggested that repayment of the loans be based on earnings, so in reality, the system currently proposed, is an extension of the one already existing. So the question of why the new system would be any fairer is an interesting one.

The Bill was finally passed in June 1998, when the Conservative Party voted against (including Shaun Woodward so at least he's consistent), although in his speech David Willetts said they accepted the principle. But, with a large number of Labour MPs being against, attempted to make political capital.

In 2001 the Blair government did break a pledge not to introduce top-up fees, but they weren't to be paid until after the course was completed, and once the student was earning over £15,000 a year. A number of concessions were made, in order to prevent a backbench rebellion, and the Bill just passed in 2004. However, a cap was imposed of £3000 on the top up fees, which has existed to this day.

So, we now come to the current situation. I do not need to go into detail on the predicament the Liberal Democrats find themselves in, except to say it is one of their own making, and that in order to reduce the rebellion in the Liberal Democrat ranks, a couple of concessions have materialised. Firstly that poorer students would have their first years tuition paid, or two years if over £6,000, which isn't a great deal of help in the long run, as rents and bills etc will still need to be found. I don't see this encouraging any more students from poorer backgrounds, as a £30,000 debt will seem as daunting as a £40,000 one.

The second concession is that rates will be upped annually instead of every 5 years in line with inflation. But perhaps the biggest sign of the Liberal Democrat's chaotic position was Sarah Teather's running away from Sky News reporters today, and her refusal to answer questions

As we have seen, there have been protests all over England over the proposed fees, and the cuts in higher education funding. This must be remembered, as this isn't a one issue protest, it's tied up into many reforms and cuts. As well as 80% cuts in university funding, the Education Maintenance Allowance is also disappearing, which has enabled a large number of sixth formers just to travel to their colleges. This along with at least one County Council's (Norfolk) decision to remove subsidies will make further education a pipe dream for many.

However, let's be truthful here, cuts would have happened under whichever government had emerged following the election, and there was a possibility of a fees increase of some sort, though not to this extent. There have been other options available, a graduate tax, supported by Vince Cable and Ed Miliband, but not recommended by Browne, for example.

The Browne Report was eventually published on the 12th October, around seven weeks ago, and based it's recommendations on six principles, the key ones being; more investment should be available for higher education, everyone who has the potential should be able to benefit from higher education, no one should have to pay until they start work and they should be affordable.

Browne then recommended removing the cap and raising the point at which tuition fees are paid back. There is one thing the coalition have done that I do completely agree with, and that is that part-time students be treated on the same basis, enabling greater access, in theory, for those who continue to work, or have families. Although the prospect of greatly increased fees may deter a number, especially those who go into higher education for the fun of it, such as retired people looking to pursue an interest.

Browne did in fact recommend that there should be no limit, though models of up to £12,000 were included. The coalition decided to reject this, and set a limit of £9,000 a year, with the expectation that not many universities would charge that high.

The coalition have stated that they believe the new system to be fair, and will enable greater access to higher education for those from poorer backgrounds. So, in order to be fair, I will measure them against what the Tories themselves are saying and the 'factsheet' created by Alun Mabbutt at Conservative Central office

1) They are following the same system that already exists, in that nothing gets paid back until after university has finished, and not until the graduate is earning £21,000 a year. I have no issue with raising the rate at which repayment starts, and that this applies to everyone is fair in that respect. However, that doesn't address the central issue, over whether doubling, or even trebling fees, will attract more students from poorer backgrounds. Currently, the money is borrowed for fees, and the repayment starts at £15,000, so there isn't really any difference in method, it's just that much more will be owed in the first place.

2)and 3) Repaying the debt will be a concern, and on the face of it, the figures in the table are very reassuring. However, this is more than individual repayment rates, and I'm not going to doubt the figures as they currently are portrayed, but the overall effects of the reforms. The government's flagship quango the Office of Budget Responsibility has said:

"Increasing tuition fees will mean the Government will have to borrow more to fund student loans. The additional cash needed to fund the loans increases the Government’s cash requirement in any year and adds to the public sector net debt."

This would mean that even if student numbers stayed at current levels, and the intention is to encourage more, especially from poorer backgrounds, that by 2014/15, the public sector net debt will have risen by £13 billion.

The irony is that the coalition is constantly stating these cuts and fees are needed to do away with the deficit. Yet not only will the debt be greatly increased, but they will have an adverse effect on inflation, which will affect the interest charged, and mean the amount needing to be repaid is subsequently greater. It will also, in the short term, mean more borrowing which will add to the deficit.

4) According to the Coalition's plans, repayments would cease after thirty years regardless, whereas currently it is twenty-five years, and is cancelled if the graduate becomes unfit for work due to disability. Therefore, although the apparent payment is less, it goes on for 5 years longer, and with potential increases in interest rates could well add up to more, and although the, 'poorest fifth actually paying back less in total than they do currently.' What is apparent is that 80% could actually end up paying more.

5) Are these increases fair? Well according to the figures, graduates earn on average £100,000 over a career more then non-graduates, so it's fair they contribute. In fact, as my own conversations which the next generation of students has shown, the idea of making a contribution isn't the issue, it's the huge increases, and whichever way the coalition spin it, a debt is still a debt. And as has been previously demonstrated, the interest rates could well substantially increase.

The repayment rate is set at 9%, which is the same rate as now, just starting at a higher level, and the interest will be 3% above inflation, at current rates. Now, whilst it is fairer that those earning more repay more, it isn't to hit them with a financial penalty for early repayment. If a graduate goes on to achieve success, or makes early repayment a priority, then they shouldn't be penalised for that. The higher earners would already be paying more in income tax, and it may be at substantially higher rates.

6) The increase in maintenance grants is a good thing, although £344 isn't going to make a tremendous impact in the long run. Universities needing to prove they are taking more students from disadvantaged backgrounds is one thing, but with the increase in fees, the number actually applying could be significantly reduced. The National Scholarship Scheme is of little or no use, in that one years fees, do not take into account that money will still need to be found for the remainder of the course. Therefore, a reduction of £6-9,000 will not help over thirty years. In reality, this is just a sop to wavering Liberal Democrat MPs.

7) This is fine, that parents will not need to contribute to fees, but in order to reduce the potential debt, many will need to help out their children living expenses. This is something many parents, especially those form middle income backgrounds do anyway. However, with a number of increases coming, VAT amongst them, and fears over jobs, parents will contribute much less, or the students will decide that the debts they'll be left with are just far too much.

8) This is an outright lie by the Conservatives. Teaching funding is being cut by 80%, and these are starting now. Arts subjects especially will receive no funding whatsoever, and this is going to have a derogatory effect on quality. Reducing funding does not automatically make teaching better, and will not make them better able to respond to student needs. Indeed, an 80% cut in funding is not equitable with continuing to pay 40% of the costs of higher education, the coalition which to make up their mind which one is true.

9) This is a complete mess, as it relies, like so many of the coalitions policies, on hoped for income. The future funding is just that, in the future, whilst the damage will have already been done. The debt will have increased by a substantial amount by then, if the OBR figures are to be believed, and therefore, the next government will have to find ways to tackle that, and higher education funding seems to have become a target. All these figures, of course, get completely blown out of the water, if student numbers fall substantially, and there appears to be no catering for the worst case scenario, which is poor planning.

10) The Graduate tax is an interesting issue, and the Tories say it would discriminate against the poorest, so let's examine it. Now, it is fair to say that a graduate tax would need to be ring-fenced to ensure the money went back into the system. However, one of the advantages is it avoids a market in fees, and therefore enables students from less well off backgrounds to apply to the universities they wish.

Like the proposed system, education would still be free at the point of delivery, and could over the long run actually raise more money for universities. On the down side, it could mean students who did cheaper degrees, ended up paying more than they cost, but this is before a system has been worked out.

The Conservatives are arguing that high earners would end up paying less as a percentage than lower earners, and that it would start at £6,475. Seeing as no system of graduate tax has yet been discussed in detail by a government or party, this is impossible to state. Any government would be very careful about the rates they set the tax to start at, so typical bluster by the Conservatives, based upon no evidence.

There we have it, the ten main reasons why the coalition believe their system is fair, and will encourage more students from poorer backgrounds. But as we have seen, not only will graduates be saddled with huge debts, which could well affect their chances of getting mortgages, or business loans in the future, the system as it's currently envisaged will add greatly to the debt.

Access to higher education is a right, not a privilege, and anybody who reaches the required standard, and wishes to, should be able to go to university. That's not to decry those who wish to pursue other avenues, and other forms of education are equally important. So apprenticeships, City & Guilds, NVQs are equally important, and should not be pushed aside in this education funding debate.

Therefore, like many others, I will be marching tomorrow in support of the students of the future. I believe it is fundamentally important that all have access to higher, and further, education. The future of the country will rest in the and of the next generation of students, and it is vital that no one is prevented from doing so, by a fear of large debts hanging round their necks.

So, is the proposed system of the coalition government a fair one? Will it encourage more young people into higher education, especially those from poorer backgrounds.

The answer to both is an unequivocal no! It isn't fair precisely because it will not only discourage the less well off form going to university, but many middle income families will also be put off. It will saddle thousands of young people with huge debts, and this is going to affect many future prospects.

Nobody denies reform of higher education funding is needed, but the government should delay this ad hoc rise in fees, and wait until a green paper has been brought forward and properly discussed by education experts, and interested groups. This would be followed by a white paper, which can be properly debated and amended in the Houses of Parliament. Too much of the government's legislation has already been shown to be hastily drafted, and poorly thought out. Let's have a proper debate, and the Browne Report should be the basis of that.

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