It's only a few hours since Ed Miliband announced a Labour Party policy of reducing home undergraduate student maximum fees by 33% from £9000 to £6000 from autumn 2016 if Labour wins the forthcoming general election, but already colleagues I have bumped into around the university have been asking my opinion. We've suspected for some time that there would be such an announcement, so we've had time to think about the implications.
I have argued consistently over the last few years that higher education is a public good and that the public purse should therefore bear a significant proportion of the costs of providing it. But at the moment the public purse is set to pay via the write-off of student debt rather than through direct funding. Moving back to greater direct funding, instead of basing financial support to the sector on an initial assumption that the student should pay (i.e. that high education should primarily be seen as a private good of benefit only to the recipient), is highly desirable. But doing that through a simple cut to the maximum permitted fee has, in my view, four very profound consequences that don't seem to have been taken into account.
1. If Labour is elected with a pledge to reduce the fee to £6ooo per annum from autumn 2016, how many home students will elect to come to English universities in autumn 2015? I can foresee a flood of requests to defer entry to next year. Result? Empty classes this autumn and a massive scramble for places next year.
2. What about students admitted in 2012, 2013 and 2014 who have been clocking up £9000 fee debts against their names? At first sight it appears that there is no provision to reduce their debt burden. Won't they feel somewhat aggrieved, and likely to campaign on this issue?
3. Currently, to charge a fee above £6000 a university has to get an agreement from the Office for Fair Access, that agreement being based on the university's plans to spend a significant proportion of the fee beyond £6000 on outreach activities and financial support. If the maximum fee is to be £6000 that statutory requirement disappears. What sanction will there be in future to ensure that widening participation remains on the agenda? Presumably the government could oblige universities to continue with OFFA-like activity to receive a top up beyond £6000 paid from the Treasury, but bringing in such a requirement would, in my understanding, require new legislation or parliamentary instruments to be brought forward - and those take time. What will happen in the meantime?
4. Already the Institute of Fiscal Studies has commented that reducing the maximum fee to £6000 is a superb way for the Labour Party to produce a strong subsidy to the middle classes and wealthier sections of society. That seems amazing. Students from more middle class households are more likely to get into higher paid jobs, in part because of the social capital they possess irrespective of their degree result, and they are thus more likely to pay off the full amount of their student debt. Reducing that debt (even if Labour would increase the marginal repayment rate for the highest paid) is a direct subsidy to that section of the population. On the other hand, students from more disadvantaged backgrounds are, we know, less likely to reach high paid employment, or will take longer to do so. They are more likely to start repaying their student debt later in their careers, and at lower levels of repayment, and are more likely to see their debt written off. Reducing their overall debt by a fee cut to £6000per annum is much less likely to benefit them.
There seem to me to be rather a lot of unforeseen consequences here - although they are foreseeable with a bit of reflection. A £6000 maximum fee seems a good potential vote winner - but that's in large part because most people stuill donl;t understand the ramifications and implications of the system introduced in 2012.
But I also notice that Ed Miliband has said that his pledge to reduce the fee cap to £6000 is not negotiable in the event of Labour having to go into coalition. Didn't another party make a similar non-negotiable pledge before the last general elecetion, again relating to student fees? Whatever happened to that pledge - and to that party?
I have argued consistently over the last few years that higher education is a public good and that the public purse should therefore bear a significant proportion of the costs of providing it. But at the moment the public purse is set to pay via the write-off of student debt rather than through direct funding. Moving back to greater direct funding, instead of basing financial support to the sector on an initial assumption that the student should pay (i.e. that high education should primarily be seen as a private good of benefit only to the recipient), is highly desirable. But doing that through a simple cut to the maximum permitted fee has, in my view, four very profound consequences that don't seem to have been taken into account.
1. If Labour is elected with a pledge to reduce the fee to £6ooo per annum from autumn 2016, how many home students will elect to come to English universities in autumn 2015? I can foresee a flood of requests to defer entry to next year. Result? Empty classes this autumn and a massive scramble for places next year.
2. What about students admitted in 2012, 2013 and 2014 who have been clocking up £9000 fee debts against their names? At first sight it appears that there is no provision to reduce their debt burden. Won't they feel somewhat aggrieved, and likely to campaign on this issue?
3. Currently, to charge a fee above £6000 a university has to get an agreement from the Office for Fair Access, that agreement being based on the university's plans to spend a significant proportion of the fee beyond £6000 on outreach activities and financial support. If the maximum fee is to be £6000 that statutory requirement disappears. What sanction will there be in future to ensure that widening participation remains on the agenda? Presumably the government could oblige universities to continue with OFFA-like activity to receive a top up beyond £6000 paid from the Treasury, but bringing in such a requirement would, in my understanding, require new legislation or parliamentary instruments to be brought forward - and those take time. What will happen in the meantime?
4. Already the Institute of Fiscal Studies has commented that reducing the maximum fee to £6000 is a superb way for the Labour Party to produce a strong subsidy to the middle classes and wealthier sections of society. That seems amazing. Students from more middle class households are more likely to get into higher paid jobs, in part because of the social capital they possess irrespective of their degree result, and they are thus more likely to pay off the full amount of their student debt. Reducing that debt (even if Labour would increase the marginal repayment rate for the highest paid) is a direct subsidy to that section of the population. On the other hand, students from more disadvantaged backgrounds are, we know, less likely to reach high paid employment, or will take longer to do so. They are more likely to start repaying their student debt later in their careers, and at lower levels of repayment, and are more likely to see their debt written off. Reducing their overall debt by a fee cut to £6000per annum is much less likely to benefit them.
There seem to me to be rather a lot of unforeseen consequences here - although they are foreseeable with a bit of reflection. A £6000 maximum fee seems a good potential vote winner - but that's in large part because most people stuill donl;t understand the ramifications and implications of the system introduced in 2012.
But I also notice that Ed Miliband has said that his pledge to reduce the fee cap to £6000 is not negotiable in the event of Labour having to go into coalition. Didn't another party make a similar non-negotiable pledge before the last general elecetion, again relating to student fees? Whatever happened to that pledge - and to that party?
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