Wednesday, 8 December 2010

Student Tuition Fees: A Brief Editorial

As you've no doubt seen both Nationally and Locally students are up in arms about the coalition governments proposed changes to Tuition Fees. The first thing to say that's worth noting is that Julian Huppert, the Liberal Democrat MP for Cambridge, will be voting *against* raising the cap on Tuition Fees. He signed the Student Pledge during the election campaign and then re-signed it after the Coalition Agreement was signed. Julian *will* be voting against these changes.

The NUS pledge was not merely one against raising the cap, it also committed its signatories to work for a "fairer alternative" to the current system. I think that the government's policy is actually a fairer alternative (though naturally not one that wholly agrees with Lib Dem policy - welcome to coalition government!) for several reasons:
  1. The income threshold to start repayments rises from £15,000 to £21,000. This means all graduates will pay less per month than they do under the current system, and stops them from having to start repayments simply because they've taken up a fairly low-skilled job because there are no graduate jobs available at the moment.
  2. The discrimination of part-time students will be coming to an end. Provided the student is studying at least one third of the time they will now be eligible for student loans on exactly the same basis as full-time students and so will no longer have to pay tuition fees up front. If we are going to deal with skills shortages in the economy and reduce unemployment and underemployment it is vital that people who have started out in working life should be able to improve their qualifications, not just people who are straight out of school or can afford to leave their jobs entirely for three years.
  3. Maintenance grants will be increased and more students will be eligible for them. The current system is simply too miserly, as parents with household incomes above the current cut off often cannot spare any money for children going to university.
  4. The interest rate charged on the debt now varies with the graduate's income. This will mean that richer graduates pay a higher rate and poorer graduates pay a lower rate thus the system will become more progressive.
These last two points were the top two concessions called for by Liberal Democrat members who responded to Lib Dem Voice's survey on the Browne Report.

One of the other things to consider is that student loans are invisible to credit scoring companies because they are repaid entirely through the tax system. This will not change. What the state is doing is not so much lending money to students as taking a form of equity stake in their income for 30 years after graduation.

In addition to the items above, Ewan Hoyle made a good point about what it is that actually prevents poor students from going to university - not the prospect of paying for their tuition after graduating but insufficient maintenance funding while they are at university.  Because of the Lib Dem influence we got the government to change the Browne report's recommendations by making the maintenance grant system more generous (see point 3 above), this helps to deal with that problem.

So my conclusions are that the proposed changes to Student Tuition Fees are;
  1. It's not Lib Dem policy, but it is an improvement on the existing system
  2. Two of the four improvements on the existing system are almost certainly the result of Lib Dem influence in government
  3. The package breaches the NUS pledge by raising the amount graduates have to pay for their education, but it is also a "fairer alternative" to the current system, so it does agree with that part of the pledge.
One thing the Liberal Democrats (specifically David Laws who championed this cause during the coalition negotiations) have achieved in Government is the Pupil Premium. In my opinion by directing extra funding to the poorest children in schools to prevent them from falling behind children from better off families as they currently do. If it succeeds it will do more for fairness and equal access to university than abolishing tuition fees would.

This post is based on an original message on a liberal democrat mailing list by Niklas Smith (reproduced with his permission). If you'd like to read the Liberal Democrat Manifesto for the 2010 Elections it is available online here.