Saturday, 27 November 2010

Tuition fees...

Okay, I said I'd post my alternative, I did, I changed my mind.  It just goes to show it's not easy!

I guess the debate is an ideological one, should students be paying for their degree or should they not?

It is socially desirable to have an educated population, but some treat it as an excuse to get drunk for three years knowing that their degree would play minimal role in their future career.  Also why should others pay extra tax to send people to university if they didn't go themselves?
A few things have pissed me off with the reporting of the proposed changes, mainly that they have lead to a massive misunderstanding.  Their was a letter into the metro yesterday that said something along the lines of "increasing fees to £9,000 will place a financial burden on the poorest meaning that they couldn't afford to go to university".  That is just wrong.  Firstly fees will be raised to £9,000 only if the university proves that it has made it equally possible for students of all backgrounds to access their courses and none of these fees will be paid in advance, they will only be paid back on earnings over £21,000.  If they don't pay it back in 30 years the debt will also be wiped clean.

Now I'm not going to say I agree with this system, however when I attended University fees were circa £1,000 payable in advance.  In addition I took out a student loan which has me paying back 9% on everything I earn over £15,000.  As such, someone leaving University who goes straight into a job paying the same as me will be £40.50 a month better off than me and have spent £3,000 less than me.  
I guess the difference is that most people are unlikely to end up paying this back.  Three years tuition fees (£18k - £27k) plus student loans (£9k? I haven't heard any detail of this) means they'll have a debt of up to £36k.    By my rough calculations (assuming a 3% rate of inflation) they would need to average around £41,000 in order to pay this off in 30 years.  Given the same salary my debt would be gone in 6, leaving me £1,800 a year better off than them.  (I can only dream of earning £41,000 at the moment but the point still stands).  The total difference would therefore be around £45,000 better off than them, but only £22,600 better off if all cash flows are discounted at a 3% rate of inflation, despite the increase in fees to an assumed £8k a year more than me.    This obviously is only the situation if they pay it back!  If someone earns my wage for the next 30 years their debt will be written off in full and will have paid back (discounted) £10,500 LESS than I did on £1k fees and a 3k student loan per year.  I know this is all really rough calculations but to me it does actually seem more progressive than the system I had.  In fact, given assuming that they still receive a student loan of £9,000 over three years they would actually have had a (discounted) net increase in cash of £7,000!  

It would need the constant wage to be £28,000 before I'd be paying the same as the hypothetical other person.

So I guess the question is is that fair?  
Is that fairer than someone who doesn't go to university and therefore is likely to earn less having to contribute to their education?  Probably.  
Should it be everyone's right to go to university? No.  It is not socially desirable for there to be 100% of the population educated to university level, as this will result in a discrepancy between what skills are needed in the country and what we have.
Should a person contribute to their education?  I'd say yes, they will benefit, though as a rule so will society.
The more I look at the figures students would be paying back, the more I think that actually it seems fair, as surely someone earning £22,000 a year can afford to pay £90?  However, had I been a Lib Dem MP I couldn't vote for it because the Lib Dem policy is for £0 fees and we ran on campaigns of no more broken promises.
The solution?
Well I obviously don't have all the answers.  It would take months of looking at the books and analysing ability to pay against actual costs in order to work this out, however here is my feelings:
  • Each University should undertake a comprehensive spending review.  Look at how much is spent and how much needs to be spent.  There is in my opinion a lot of wastage, too much emphasis is placed on research and not enough on teaching.  The actual cost per student should be accurately and independently calculated, so that no student pays more than their education costs, irrespective of the payment system in place.
  • Look at other ways a University can bring in money, I don't think they do enough considering they have thousands of students attending them, there must be more revenue streams available.
  • The length of each course should be looked at.  In my final year I had 10 hours face time per week, and two 10 week semesters (plus 3 week period for exams).  I would suggest altering the structure of some universities so that they are two year courses with  13 week teaching periods: September - December (3 week break for Christmas and New Year), January - April (3 week break for Easter), April - July, 7 week summer break.  There is no reason for a four month long summer as some currently have!
  • Socially desirable qualifications (medical doctors etc) should be free no matter what. These courses are long and there should be as much incentive for uptake in them as possible.
  • An investment into alternatives to study, so there are more options for people leaving school and sixth form, so that University isn't seen as the only way forward.  Apprenticeship programs that create skills that are actually needed.
  • Involve all relevant parties (as in the NUS, universities and the government) in open discussions on how best to meet the necessary funding, they all have their interests but surely they should all be able to see the others point of view.  Without seeing the figures I can't suggest what levels should be set, however perhaps a 50:50 split between students and the government to begin with?

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