New Plan Would Exchange UK Tuition Hike for Assuming Loan Debt

The UK is considering allowing universities to raise tuition fees above the cap of £9,000 ($15,146) a year if they will take on the student loan debts under a plan which will  have to pass muster with ministers.

The proposal suggests that students would repay their loans to their own universities and begin to repay once they are earning at least £21,000 annually.  Joining the program is left up to the universities, so some believe that only the top schools could afford taking on such a risk, writes Andrew Grice of  The Independent. The plans general features break down as follows:

Pros:

• Universities would have a financial incentive to ensure their students have a successful career.

• Might encourage universities to re-train graduates who change course during their careers.

• The plan has the support of approximately six leading universities.

• The Treasury sees the cap as a way of limiting unpaid tuition loans.

• The proposal could head off a higher education funding crisis.

• Universities could partner with a pension fund or a similar investor if they agreed to take on all or part of the debt.

• A possible rebate is being considered for students who start courses the year before the policy is begun.

• A Labour government would make up the funding gap and reinstate direct teaching grants to ward off universities’ drop in fees.

Cons:

• The issue is complex and needs much more time and research.

• A large number of universities would have to participate in order for the plan to be viable.

• It would take time to move through the system.

• There could be a drastic fall in enrollment for one year as students delay starting their courses until fees drop.

• Any Treasury promises to cover funding gaps should be taken with a grain of salt.

The Cambridge University Labour Club and its Oxford peers are condemning the plans being made by the Conservative Party, according to Gareth McPherson in an article for the Cambridge News. Former Universities Minister David Willets has spoken with top UK universities about the possibility of raising tuitions to £16,000 in exchange for taking on student’s debts.  But the Cambridge and Oxford Labour Clubs said:

“Many students from low-income backgrounds are already put off from applying to Oxford or Cambridge due to their perceived reputations for elitism – proposals to charge higher fees will only entrench these fears.

We are deeply concerned that students concerned about debt will make their higher education decisions on the basis of such fears, leading to hugely neglected potential. Instead of making students pay through the nose our universities should institute better access initiatives to widen the scope of Oxbridge applications and ensure that no-one is put off applying to Oxford and Cambridge due to financial concerns.”

Julian Huppert, Cambridge’s MP, and the Cambridge Defend Education organization have condemned the idea.  “This university will continue to offer needs-blind admission on academic merit alone,” said a Cambridge spokesperson.

John Morgan writes in Times Higher Education, that Sir Christopher Snowden, the Universities UK president and University of Surrey vice-chancellor, said:

 “I have raised this directly with Liam Byrne [ Labour MP for Birmingham, Hodge Hill] and written to Ed Balls [Labour (Co-op) MP for Morley and Outwood], to make it clear that if there is a move to £6K, there has to be not only a guarantee that the financial gap is made up, but also the recognition that we have to come to a model that is more sustainable going forwards.”

Bill Rammell, vice-chancellor of the University of Bedfordshire and former Labour MP,  has written an opinion piece for Times Higher Education, in which he offers some of the challenges the authors of these new fee changes have not addressed.

Inflation - £9,000 will, in real terms, will be worth £8,000 by 2015, and £7,000 in 2020.

Lowering fees to £6,000 may not be crucial since student enrollment continues to rise in spite of £9,000 fees.

Even though Labour says it will make up the decrease in tuition fees, priorities change with time.

His advice is that the unit of resource commitment needs to apply to the whole Parliament.  The delivery of the commitment should be reported on annually by the independent Office for Budget Responsibilty.  And, most importantly, Labour should legislate to uprate the £6,000 tuition fee annually by inflation rates.