Sarah Mullholland writing for the newest addition to the blogosphere, Labour List, initiated a debate on the future of our higher education sector. Due in 2009 is the government’s review of the controversial variable fees that were introduced in the last Higher Education Act that passed by a mere five votes.
While I still have huge reservations about fees – NUS have set out an excellent analysis of the current situation in their report “Broke and Broken” – I have never had a problem about a student contribution while free at the point of use. I think many other opponents of fees have been pleasantly surprised that still more students and fractionally more poorer students go to university. What I really wonder is how many more might have gone if the fear of massive debt had not been a prohibitive barrier?
Either way, we are five years on, higher education is not desperate, marketisation has not decimated, HE students are not destitute. This therefore gives a fresh perspective to the options on the table.
For me – and many others – there are two wholly regressive elements to the current top-up fee system. Firstly, the concept of a fee that turns into a numerical debt and becomes the biggest barrier to a degree. Secondly, that jobs with a public value and lower pay are disincentivised by the repayment package. But there are many facts that lean themselves to progressive solutions:
- the incremental repayment system,
- a contribution cap of 25 years,
- a five year loan repayment holiday and
- the full fee loan open to every student.
It is this last point which offers the greatest opportunity and must cause the largest headache for Wendy Piatt and her Russell Group VCs. It is the much championed success story of the controversial act and was the lynch pin on which the progressive arguments were made and some Labour MPs were swayed and others reluctantly went through the government lobbies.
This policy is the single greatest constraint on any attempts to lift the cap and the operation of a fully-fledged market. If the government will provide a full fee loan what incentives are there to keeping fees low? There are no counterweights to create a market rate like there is with Masters degree fees – nothing whatsoever. To lift the cap and still have full fee loan will just cause hyperinflation in the HE sector.
With this in tact the “cash strapped” VCs of Oxbridge, Imperial and the other Russell Group palaces will have to look for other solutions. A means tested fee loan again – very unpopular with the Daily Mail and middle classes, a part payment system where students can use existing income or assets to ‘top up’ the government’s capped fee loan, or no fee loans what so ever. All unpopular, regressive and unworkable.
The reality of the fee loan means that top up fees only exist on paper and in the minds of those apprehensive about debt (normally poorer or untraditional to higher education). This apprehension limits the scope and aspiration of many young people who calculate a future debt knowing their only fixed asset is their brain power and knowledge – and too many say the risk is too high.
If instead the government were to propose a graduate endowment that honoured current income to students from what is now maintenance grants and living cost loans, a minimum value per student to universities (as is) and was paid on the current pay rates, with a 25 year limit and a five year payment holiday there would only be three real resulting differences to the status quo – students would not be met with a scary amount of debt, graduates would no longer receive regular mailing for their student loan account and there would be slightly more money in the system long term.
For those who financially benefit disproportionately more from higher education their contribution would go up by slightly more (and there are limits that could be put on this) and those who choose a role with high public value but no way near the salary to match would no longer be deterred from these choices.
This would bring in slightly more money which would plug the funding gap created by “Sale of Student Loans Act”, but more importantly add some much needed social democratic principle to the scheme, prevent an ideological Tory market if they were ever to get into power and continue funding higher education at the current – and relative in real terms to 1997, higher and generous – rate.
A learning exercise, not a looking like doing something review is what is needed. Any other review will lead to unnecessary grandstanding and unwarranted additional burdens on the tax payer.
Richard Angell is national chair of Young Labour