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Young people have had their say: are tuition fees ripe for a rethink?

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Young people have had their say: are tuition fees ripe for a rethink?

UK universities

Young people have had their say: are tuition fees ripe for a rethink?

Two takes: the political consensus frays, says Miranda Green, while recent graduates such as Alice Hancock view it as a tax

© Jonathan McHugh

Miranda Green

A ‘reckoning’ looms as the political consensus frays

For Alan Johnson, working class hero and in 2004 the higher education minister, it was a labour of love — twisting the arms of Tony Blair’s reluctant backbenchers to approve raising tuition fees to £3,000 per year, a move that the Labour party had ruled out in its manifesto. The motion passed by five votes. Mr Johnson, who left school at 15, was a cheerleader for moves to expand — and fund — university education.

Before polling day this year, Mr Johnson railed against a more dramatic Labour manifesto promise: scrapping all tuition fees.

“There is nothing progressive,” he insisted, “about working people, many of whom will get nowhere near a university, cross-subsidising mainly middle class students to have a completely free higher education.”

But this view, once a (shaky) consensus among mainstream politicians, is under pressure: tinkering with the original design has seen rocketing rates try the patience of students and their families. As a result, Jeremy Corbyn’s £11bn pledge proved appealing — if he were to act on it in power, a booming, world-class higher education sector would be plunged into financial crisis.

Rising borrowing costs as politicians tinker with the system tries the patience of students and their families

Even Mr Corbyn’s opponents inside Labour found the fees promise was popular. Activists report that, along with students, ethnic minority parents, nurturing the aspirations for their offspring that characterise many immigrant communities, loved it.

Fees have caused problems for all parties. Who can forget Nick Clegg’s tuneful apology for the coalition’s decision to treble the cap on fees to £9,000? But cross-party acceptance of the policy dates from the Dearing review, published before the 1997 election. It convinced ministers that Britain’s universities needed fee income to remain among the global best, and that the state ought not to pay the whole cost.

Twice, a variable fee system with a cap, first at £3,000 then at £9,000, has resulted in a blanket maximum fee. Lord Adonis, a campaigner for social mobility, has reported the universities to the competition authority. University strategists want the maximum income, which has led to the expansion of three-year degrees. Economists argue that young people would be better served by one or two-year technical courses — or by better early years education to tackle disadvantage.

Interest rates, originally set very low, are three percentage points above the retail prices index of inflation, at an eye-watering 6.1 per cent. Former ministers worry about the cost to the public purse, when, as the Education Policy Institute projects, 71 per cent of students will never repay. Student loans are forecast to account for 11 per cent of gross domestic product in the 2040s, up from 4 per cent now.

Since the first graduate contribution was introduced in 1998, the UK has managed to stay high up the international university rankings, with a lucrative higher education export business, a borrowing spree that has seen new buildings spring up on campuses, and vice chancellors enjoying average pay packets of £277,834. But to quote Mr Corbyn’s campaign rhetoric, there may be “a reckoning” coming.

The writer is a former FT education correspondent

Alice Hancock

Generation Rent may never repay our student debts

Every month £57 of my salary is paid by the Financial Times to the Student Loans Company on my behalf. It is the equivalent of a train ticket to my parents’ house. In my previous job, it was about £30, the same amount as my mobile phone bill.

I started university in 2009 — those halcyon days when tuition fees were capped at £3,000, though sadly not the glittering years when they were capped at £1,000, or before 1998, when they didn’t exist at all. I am at the shallower end of the graduate debt pool. Since 2012, fees have been fixed at £9,000, though they now rise according to inflation. From September, new students and many existing ones will pay £9,250.

Under this post-2012 system — what the Student Loans Company calls “Plan 2” — even though the amount of my debt would be far higher, I would pay £20 less per month because the salary threshold used for calculating repayments is higher. Either way, the money comes out of my pay packet before I see it. It feels ephemeral.

Many of us see it as a graduate tax for higher earners rather than a loan

In 2010, when the government announced plans to triple tuition fees, I was editor of my student newspaper. We live-blogged the progress of 30,000 students who marched down Whitehall and watched as Charlie Gilmour was arrested for swinging from the Cenotaph’s flag. In Cambridge, students took up occupation in the university’s Senate House — though I remember the protest being more about yoga and rules banning chewing gum than political debate.

The protests occasioned a good deal of nostalgia. Sixty-eighters like Jeremy Paxman, who spoke at the Cambridge Union that term, expressed delight that something had brought students back to the streets. He edited Cambridge’s student paper in the early 1970s when undergraduates marched against war in Vietnam and dictatorship in Greece.

But ask any graduate of the 2012 vintage and few now notice or — I hazard — care about their student debt. “If I worry about it, it’s only because it’s another thing that means I don’t have much money,” says one contemporary.

Generation Rent are apathetic. In material terms, this is money that we don’t see being put towards a loan that we will probably never see repaid. Loans are written off 30 years after repayments begin. I may never earn enough to repay my debt.

Students took to the streets in anger at reneged promises, not from any hard-headed interest rate calculation

Calling the debt a student loan is a misnomer: most of us see it as a graduate tax. Students who took to the streets did so out of anger at a government that reneged on promises, not because of hard-headed calculations about interest rates pegged to the retail price index.

In all the discussion over price, there has been little talk of product. I’m happy to make my monthly donation towards my education: it led me to a better job. But I attended a university where I received an average of 15 hours of tuition each week, much of it one-on-one. This is far from commonplace.

Repaying the equivalent of a train fare each month may seem acceptable, but if graduates are confronted with a labour market that fails to reward their hard graft at university, then shouldn’t we be concerned that students are being taken for a ride?

The writer is assistant to the FT editor

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Splashing the cash / From Ian Sharman

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