“Get the Facts: Student Finance” is a “factsheet” that has recently popped up on the Liberal Democrat website. Upon seeing it I was incredibly angry. I understand why my party is trying it’s best to confront and justify our position, but the way in which it does so infuriates me. “Factsheets” like this only ever seem to skim the surface of the issues at hand. They tailor the arguments and cherry pick the facts to justify our own political agenda with little ambition to actually have a proper and upfront debate on the impact of the policy at hand.
It is obvious and clear that you can win the argument when you are the ones framing the context of the debate. I’m not naive, I know this is how modern politics works. However, the context in which the discussion only ever seems to occur is one that makes the assumption that there is only one way to fund higher education. In this case the assumption is that it has to be done off the back of saddling students with various levels of debt. In this case the debate seems to conclude that we either pursue lower debt with a less progressive repayment system, or through the new system we have introduced with the Tories where the emphasis is on higher debt but repaid through a more “progressive” system.
Let us be clear, this choice is between one level of student debt or another. This is not a “choice” but a false dichotomy. We know very well there are other ways to fund education that does not involve the failed experiment of fees and debt.
Now, unlike Nick Clegg, I am not sorry for believing that scrapping tuition fees was the most progressive proposal to offer to the electorate. It is the only way to truly break down the barriers of access and open up education to every person in the country.
But before I move onto arguments for a free education I want to look at the reality of what we have now. A lot of the arguments put forward by my party come down to the upfront “costs” of accessing higher education and how it impacts the most disadvantaged. It is rightly pointed out that more applications are being made by students from poorer backgrounds and that should be celebrated. But when the gap between the numbers of students from privileged backgrounds going to University is still much higher than that of those disadvantaged students we should not be so quick to pat ourselves on the back.
It must also be noted that there has been a huge drop in applications to part time courses since 2010, which disproportionately come from those in under-represented groups. A decline in applications from mature students also means that many older prospective students no longer consider higher education, which has so often given people a second chance to better themselves and lift their opportunities in life.
But for those lucky enough to make it to University, what sort of future are we actually offering them? Because, if our party’s arguments are right, then they won’t be paying that much back due to a fairer repayment system, right? Yes and no. Yes, some may be paying back less (or nothing at all) due to higher threshold of repayment now being at £21,000. However, is that really something to celebrate? Using the fear of debt repayments as a means to trap graduates in low paying jobs? I’d argue not. On the other hand, reports and figures show that the real losers from this will be the “middle earners”. Since the trebling of fees, graduates will now leave University with debts in excess of £40,000.
Lower repayments might seem an enticing prospect at first, but when you’re a middle earner, a teacher or other professional, who would have been paying off their loan into their 30s under the old system, they will now find themselves still clearing their students debts right up into their 40s and even their 50s. This means, as a report by the Sutton Trust has recently revealed, that those people will be having to find an extra £2,500 a year to cover those repayments. That equates to, what would be, an extra 6% on their income tax bills – at a time when graduates may well be raising a family and battling with mortgage costs. The very same report asserts that “even with this extra charge on middle earners, there is an increasing likelihood that the government will end up failing to recoup most of its loans…this suggests that not only are today’s students facing bigger debts, but also the new system is not producing the savings expected by ministers.”
Now although I do not agree with every conclusion and suggestion made within the report, it is startling that the very reasoning behind justifying the fees rise appears to be crumbling in on itself. We were told we must see fees trebled to ensure the funding gaps were filled and that funding could stay sustainable. The irony would be funny if it wasn’t so tragic. To add insult to injury recent figures are showing non-repayment rates are soon to be reaching the point at which the government recoups little more than it did under the previous system (possibly less!).
The government’s failure to recoup debt has even led them onto an agenda of privatising the student loan book. Whilst I do not want to dwell too much on this, the prospect should put fear into graduates as a secret report recently detailed that raising interest rates on the loans could be a surefire way to attract private buyer interest. That would signal a retrospective hike in fees, an awful prospect for those already struggling to clear their student debts.
It is clear that raising fees is nothing but an exercise in futility. It leave us with little choice but to question why raising fees was even worth it to begin with. As I and many others said from the beginning, it is a system that would eventually unravel itself as one that is completely unsustainable. We are finally being vindicated for our suspicions, with successive failed government policy as our vindicator.
Now I understand that simply finding flaws in something does nothing to actually justify my own arguments. So it is important I help to explain my personal justifications for my own views on the best way to fund higher education.
My plea: Let’s fight for a fairer funding model for higher education that ensures it is truly accessible and free for all.
We can’t escape that the number of young people accessing higher education has ballooned in recent years. With echoes of Blair’s aspirations to see half of young people going to University, and emphasis taken away from other important post-16 routes in education, I do recognise that the cost of funding higher education directly through general taxation would be incredibly costly in comparison to when it last was. However, we must not pretend that this is something unique to us. In Finland, for example, around 80% of young women are going to University where they boast the highest proportion of graduates in the world. Similar pictures are emerging in other parts of Europe with Iceland and Slovakia offering an education landscape where high numbers of young people are going into education. Despite a sharp rise in numbers of graduates in the UK we have seen ourselves fall from third to fifteenth in industrial countries when considering the proportion of said people graduating from University. The UK also spends less than the average proportion of our GDP on funding higher education.
Yet whilst boasting about our world class education, it is something that youngsters in affluent areas are still up to five times more likely to graduate than their disadvantaged counterparts from poorer areas. So is there any aspect of higher education where we still lead the way against our international counterparts? There certainly is and it is that tuition fees here are higher than anywhere else in Europe and amongst the highest in the world. Even in affluent nations where fees are much lower than here, students are demanding the abolition of fees with their demands being met by government. A prime and recent example of this is Germany, who are not exactly the most likely of suspects. If they can do it, why can’t we at least aspire to doing the same?
This moves us onto the sad reality that we have millions of graduates saddled with debt and no guarantee of them ever even paying it off in full. Just imagine if those graduates were instead helping to boost our economy? Sadly, imagining is all we can do for now. A clear choice has been made. A choice to punish the educated by trapping them into debt instead of investing in them to assist them in fulfilling and pursuing their aspirations to better themselves and society around them. This is what is expected in other countries (including Scotland where we successfully abolished fees!) and that is what we should expect of our government here as well.
For myself and others, this is about prioritising education on the basis and recognition that education is not only a public good, but a right. Because higher education isn’t just a tool which transforms students’ lives, it directly transforms our wider society too. The argument that not every person will go to University is an argument often used to push forward the idea that not everyone will benefit from higher education. Yet with more people getting degrees now than there were people getting A-level equivalents a generation ago, it is hard to imagine putting these arguments of using debt as a means to funding those studies to that previous generation who took those A-Level equivalents.
“But it’s the economy, stupid!”
If it weren’t for the economic benefits that come from higher education, we would be a much poorer society financially. A direct example of this is found in the fact that reports have found that for every pound invested in HE, the economy benefits through seeing a return of £2.60. I find it hard to think of any single example that not only produces us with an economic incentive for investment, but equally acts as a strong proponent for social mobility with the transformative power to change lives by lifting graduates from previously poor backgrounds into economic prosperity.
Sadly the potential effects of higher education to transform lives like this will rarely be seen within the current circumstances. The majority of graduates, despite expecting to find higher paid employment, will have much of their disposable income lost through paying off their student loans and through housing debts. Imagine how much better off the individual and the society they live in could be if they were spending that lost disposable income elsewhere?
As explored above, a university education generally leads onto a higher wage. This means a graduate will, on average, usually pay a higher rate of income tax in comparison to those who did not study in higher education. Our progressive tax system accommodates for the fact that those who would make it to university, and then succeed in finding high paid employment, will be paying more towards the funding of education. This is truly a far cry from the “poor subsidising the rich” argument that is often thrown about. The reality is that we would see a much higher subsidy from the rich which, in turn, would allow the poorest in society to benefit from an accessible and free education.
As it stands we also have the ludicrous situation where someone could be paying for their education twice. Once through general taxes which go towards the public aspect of subsidising HE and secondly through the repayment of their student debts. At least if we consolidated funding into a single stream directly from general taxation we could be clear on how much we are spending whilst also protecting ourselves from being exposed to more funding black holes due to repayments being written off.
Allocating funding to the system based on upfront yearly costs would surely be far more efficient than trying to predict the earnings of graduates in decades time, whilst balancing that with public subsidy (which is being continuously slashed as it is). The former can become a reality, we just need to fight to make education a priority. Not just in our party, but in wider society where the arguments for free education still need to be won.
As the road to marketisation is being accelerated within higher education, we need to push for change before it is too late. The deep cuts to the public subsidies is leaving insitutions more and more reliant on their own finances. Whilst this may be doable for the top Universities in the country, where applications are soaring, it leaves a dangerous prospect for those Universities who do not necessarily feature in the top half of the league tables. They will have to make difficult decisions with some already closing departments and finding ways to deliver cuts without trying to damage the experience of students. To do this without threatening hundreds, if not thousands, of local jobs is nigh on impossible. My own University where I studied, Brunel, is a prime example of an institution which has had to pass a number of “reforms” and restructuring of departments to cope with the financial difficulties.
If any of these places of study ever had to face the worst of scenarios, shutting down entirely, this would not just be a huge blow to the local economies and communities they service but to the vast numbers of disadvantaged students who are not as likely to apply to the Russell Group Universities which are the few institutions best equipped to combat these cuts.
On top of everything that has happened we have also begun to see the government selling off the student loan book to help the funding of the expansion of University places. Whilst I agree with the government’s decision to expand places, I do not feel the threat of retrospectively hiking fees off the back of selling the loans to private companies is a particularly fair way of funding such an expansion. Now many would contest this assertion on the basis that the government have given assurances regarding any attempts to hike interest rates on the loans taken out between 1998 and 2012. However, a secret report named ‘Project Hero’ revealed how the government could make the sell off desirable to private buyers by possibly giving them the option to raise the interest rates on the loans to ensure they could make a profit. Such revelations truly make any ‘assurances’ ring hollow.
Can we really do this?
Now I know for many of us in the Liberal Democrats we fear that the toxicity of this issue means many are wary of reopening any wounds because of the damage it has already done to the way we are perceived. However, Nick Clegg has always told us that we must do what was right, rather than what was politically easy. I still believe that is a noble approach to take and one we should continue to follow, even in government.
I do not expect to win everyone over with this, but if we can build a broad coalition within the party to help reignite the debate on this issue, I think that once again we could become the biggest and most progressive force in British politics calling for a fairer way to fund education. I hope you will join me in this fight.
For further reading on a number of points raised in this blog:
Sutton Trust Report: http://www.suttontrust.com/our-work/research/item/payback-time/
Offa Annual Report: http://www.offa.org.uk/press-releases/offa-annual-report-warns-over-drop-in-part-time-and-mature-student-recruitment/
BBC on student numbers and HE spending: http://www.bbc.co.uk/news/education-11438140
Other news and opinion pieces:
http://www.theguardian.com/education/2014/apr/10/university-students-loans-fees-graduate-debt
http://opinion.publicfinance.co.uk/2014/04/surely-some-mistake-on-student-debt/
Liberal Insight 
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