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Why the Con/Dems have got it wrong

December 6, 2010
Steve Bell on tuition fees

Link to Guardian image

The vote in parliament this Thursday is over whether to raise the tuition fee cap. Remember, the so called ‘progressive’ measures are not yet being dealt with. If a raise in the cap is decided by parliament, there is no guarantee the measures, such as the free scholarships touted this weekend, will later be combined with this legislation.

Let’s examine the arguments that the Con/Dem coalition are forwarding about and around the tuition fees debate.

Firstly, let’s consider Nick Clegg’s claim that being in coalition means compromise, and therefore he can break a promise. The whole point of his election campaign was based upon a ‘new’ or ‘different’ politics. When he stated ‎”I believe it’s a time for promises to be kept” as part of the election campaign, many voters took this at face value. Nick Clegg did not say “I believe it’s a time for promises to be kept, unless we get into power”. Aaron Porter, NUS president, made the point quite succinctly in his open letter to the LibDem leader that the pledge that all LibDem MPs signed “did not offer voters making decisions on the basis of those signatures the additional information that you would seek to abolish fees if you won, but agree to triple them if in coalition.”

Students from lower-income families will pay less than under the current system.

The projected stats indicate this is true for a small minority of future students, but assumes (contrary to the Con/Dem argument) that low incomes will continue to be earned after graduation. The argument also does not take into account the vast majority of prospective students from the same low-income backgrounds as that minority who will not enter HE as a result of the overwhelming threat of debt. The removal of the EMA, which has proven instrumental in keeping young people in post-School education in recent years, will exacerbate that situation.

Link to Guardian image

And let us not forget the vast majority of students who will pay significantly more than under the present system: at least 60-65% will be much worse off. On average graduates will be approximately £5,000 worse off, with some graduates possibly paying more than £20,000 more for their higher education than under the current system. And they will pay a great deal more than the very little less the low-income minority will pay. Download the Million+ report here: http://www.millionplus.ac.uk/press/-fair-progressive-and-good-value-million-report-published

It is clear that these proposals will saddle future generations with very large amounts of debt for three decades of their working lives, at interest rates as high as RPI + 3%. That is to say at rates potentially higher than their mortgages. (RPI+3% today would be 7.5% – the lowest mortgages on offer today are between 2% and 3%). On a pay-slip, that’s going to look just like a tax, sitting next to the NI payment, but much, much larger than that figure. Under the current repayment proposals, it is argued that many will not pay off the full amount in 30 years, which is the same as admitting that it’s just a percentage off your salary for thirty years if you earn over a certain threshold – just like a tax. The compound interest upon interest upon capital amount over decades effectively keep huge amounts of money out of the economy, and no study has yet considered the braking impact of removing this money upon the future growth of the economy.

What is more, the indication is that this proposed tuition fee system will not save money compared to the current tuition fee system (according to HEPI) , which would indicate it is a particularly inefficient mode of funding HE, and one that makes no significant saving for the state.

The proposals allow education ‘free at the point of access’

This ‘buy now, pay later’ aspect of the proposals is true, but hardly a positive selling point. The argument deliberately obfuscates the 80% cut in state funding of HE and, more importantly, the fact that an increased  level of ‘buy now, pay later’ attached to education means that debt – the very thing that caused the recent financial crisis – is to be institutionalised for generations: graduates will face up to 30 years of debt, accruing interest upon interest at a rate higher than their mortgage. Yes, they will ‘pay less’ than the currents scheme, but that’s like arguing that because you ‘pay less’ per month when you buy a sofa at 4% for 5 years than at 3% for two years; how is that ‘better’, if the actual cost is potentially much higher in the long run? As Aaron Porter, NUS president, this weekend explained to Nick Clegg: “Being in debt for the next 30 years of our lives is not something we want to celebrate as progressive – and never paying off a debt is something I was raised to believe is a source of shame, not progressive pride.”

Part-time students articleThe government’s own department of Business has announced that part-time students may be deterred from HE under the new fees proposals, which would clearly impact further on low-income families and mature students.

Those who benefit from education should pay for education.

This is a keystone to the Con/Dem arguments, but it takes very little scrutiny to recognise it is utterly flawed as an argument. Business and industry are clearly the greatest beneficiary of an educated work-force, and society in general benefits from the innovation that is generated by graduates; if we appreciate our doctors and teachers, if we enjoy watching TV and films, if we keep warm using developed textiles, if we make use of computing equipment, or domestic appliances, then we are benefitting from the results of an educated work-force. The list of benefits – whether economic, cultural or social – is endless.

You are more likley to earn a higher salary if you have a degree.

If this is so, then you are also more likely to pay higher taxes: the pay-back is already built into the tax system, and any increased ‘progressive’ element might be introduced in how higher tax payers are treated. Already, under the current system, the return to the state in tax over the lifetime of a graduate is more than three times the cost to the state of educating that individual. 33% is a pretty good return on any investment.

Quality of education will improve if the market economy is allowed to operate freely in HE

Our students should be able to select their courses based upon their life objectives, not upon cost. Furthermore, the basic premise of higher education is that students have their learning facilitated by a group of senior ‘experts’, who are able to judge the best approaches and strategies to that learning. To suggest that the student-customer must decide what courses are worth running, and which modules within each course are more valuable than others, following a market principle, is to turn that essential premise on its head. There is no evidence elsewhere in the world that a market-run HE system improves that system or makes it any more efficient. Even if we use the NSS as a measure of success or weakness – and there are some doubts about over-reliance on that system as an indicator of quality or excellence – then we see the proposed system working against what that system indicates: some of the highest NSS ‘scores’ in some subjects were achieved at institutions that now face 100% loss of funding, and whose traditional catchment is from amongst a demographic that are likely to be discouraged from entering higher education.

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