Will Bad Math Doom the UK’s New University Tuition Plan?

A report from the Higher Education Policy Institute says that the UK Government greatly erred when estimating the costs of the new university tuition scheme that went into effect this fall. According to data analyzed by the respected policy think tank, it’s entirely possible that in the long run, allowing the schools to raise tuition by nearly 300% up to £9,000 could end up costing the government more money than if they’d stuck to the system in place before.

The Independent is reporting that in order to meet its obligation, the Government will eventually have to look at either placing limits on the number of students attending university courses or raise the amount of student loans the graduates have to repay.

Understandably, Labour politicians met the report’s conclusions with something very nearly approaching glee. Shabana Mahmood, who is the spokeswoman for the party on higher education issues, called the new tuition scheme an example of “incompetence” on the part of the Coalition.

Bahram Bekhradnia, Hepi’s director, warned of “serious consequences” for the higher education sector. “Either future taxpayers will need to pay more, other parts of the higher education budget will need to be cut, student numbers will need to be held down even further than presently planned or former students will have to repay more,” he said. Last night students and lecturers’ leaders said the findings showed the Government’s higher education policy was “in tatters”.

It’s hard not to view the findings are an embarrassment for the Government, but it is the Deputy Prime Minister Nick Clegg who’ll be hit worst by the fallout. Clegg, who made a commitment to oppose an increase in university fees during the general election, eventually backed his Tory colleagues’ proposal that called for placing a higher maximum on the tuition. During the Lib Dem party conference earlier this month, he explained his flip-flop as being made out of necessity once he understood how much financial difficulty the country found itself in after the 2008 world-wide recession.

The Hepi report focuses on two key areas where it says civil servants have made “highly uncertain and optimistic assumptions” on funding. Firstly, it cites the assumption that the average net fee charged by universities would be £7,500 a year – the true figure is nearer to £8,300, thus forcing students to borrow more. Secondly, it calls into question the assumption that the average male graduate will be earning £75,000 a year in 30 years, the period by which loans have to be repaid. This is already a reduction from an earlier estimate of £100,000 a year.

Some people felt that their predictions, made at the time when the new tuition scheme was still under debate, are now justified by the HEPI report. Sally Hunt, the General Secretary of the University and College Union, says that before the the Government finalized the new fee schedule, her group warned that average tuition was going to be well above the £7,500 per year which was the accepted estimate at the time. She added that in light of HEPI findings, it’s correct to wonder if the move to shift financial burden for higher ed onto students was in reality a move driven by ideology rather than sound fiscal sense.