Finance report deems it “unsuitable”

Image: Lending Memo

Image: Lending Memo

A report by the Higher Education Commission has stated that current system of higher education student finance that came into place in 2012, is effectively unsustainable. It has predicted that under the new system with fees capped at £9,000 as opposed to £3225. Previously, students will amass an average of £44,035 of debt and only 27% will be able to fully pay this back, before it is wiped, 30 years after repayments begin.

Leaving, for now, the question of the fairness and morality of charging such high fees for an undergraduate degree, this report shows that system is a failing one.
With such a low number of students able to pay off their debt, the government is having to initially subsidise fees. Later they wipe the debt, taking on the financial burden of higher education, without being able to take any of the credit, leaving them with “the worst of both worlds”, as the report describes it.

A financial forecast in March 2014 suggested that the current system will actually cost more than the one it replaced; with this new report it is not hard to see why.
All of this begs the question why the fees were introduced in the first place? It would be imagined that somewhere within the government, one brilliant brain might have seen this coming. The report is critical of the attempt by the government to try and introduce a market system to a sector that does not work on the market.

In my view, the decision to ‘marketise’ higher education was a cynical, ideological one, inappropriate for the education sector. However whatever your view point, this report shows that damage the system is now doing.

Burdening students with a debt nearing £50,000, the “unforeseen problems…in the economy and society” could be extremely dangerous and damaging.

Concerns have been raised about what this might do to intergenerational inequality. In addition, the effect it might have on an average, 30-something middle earner, such as a teacher or health work who needed a degree for their job, trying to get a mortgage has raised particular problems.

This is despite the promises made by the then universities minister, David Willets, that the debt would have no impact on mortgage applications. I’m unsure how he could have hoped to guarantee this.

In Germany, public pressure has resulted in the removal of tuition fees. On 19 November, thousands of students marched through London to protest about the fees, but coverage on the news was been almost non-existent, and wasn’t helped by the lack of support from the NUS.

Why are we taking this system lying down? It is bad for students, and for our futures. The report details the many public and private, social and economic, benefits of higher education, and the ways that these fees could potentially damage it. Finally, as the report shows, the policy is also bad for the government, the treasury and the taxpayer.

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