The affordability of university education has been hotly debated in recent times. This is hardly surprising given that the average student is expected to graduate with a debt of over £44,000. Of course, there is the financial safeguard of not having to start repayments before earning over £21,000 per year; and an estimated 74% of students never pay back all their loan, instead having large swathes written off. Another statistic worth pointing out is that record numbers of students enrolled after the undergraduate cap was raised in 2014, even though, the present generation of students are expected to continue paying the debt into their 40s and 50s.
Labour leader, Ed Miliband, has pledged to address this issue by reducing annual university fees from £9,000 to £6,000 per year, if elected in May. He outlined the proposed changes at a Labour Party conference in Leeds, saying the fee reduction would be coupled by an increase in the maintenance grant from £3,400 to £3,800 as a means of aid for families who pay basic levels of tax. However, graduates who earn the most will be expected to pay greater amounts of interest on their student loans. Milliband also revealed plans to restrict the amount of pension tax relief offered to the wealthy.
Need for change?
The Labour leader gave a passionate speech about the importance of changing the university payment structure. He said, “Today is the day we say: we will not make the young pay the price of hard times. I am a father of two young boys, and I appeal to every parent and grandparent in Britain, every concerned citizen: let’s together turn around the prospects of young people, let’s restore the ‘promise of Britain’, let’s make ourselves again a country where the next generation does better than the last.”
The proposed reduction in fees has been taken as cause for concern by many of the UK’s academic institutions. It is thought that some students will be tempted to defer entry and take gap years in anticipation of the cut. The universities may be impelled to offer substantial price reductions or scrap potentially valuable courses if there isn’t great enough demand. There will be a general feeling of uncertainty with regards to budgeting no matter who wins the general election in May.
Some political commentators have placed doubt upon the legitimacy of the proposals. It’s been claimed that Miliband is simply trying to appeal to voters and that he fully understands the difficulties of making such major financial changes. Vince Cable, the current business Secretary Of State, declared that the plans are “financially illiterate”. He pointed out that it is impossible to make accurate predictions regarding Britain’s long term economic future and that the progressive payment system works effectively. Fellow Liberal Democrat Ed Davey followed up by saying that he would resist Labour’s proposals if the two parties formed a coalition. However, Miliband responded by claiming he wouldn’t follow the Liberal Democrat’s lead and revert on the education policy if Labour come to power in this year.
A general survey conducted by Yougov revealed that 64% of people are in favour and 20% in opposition to the proposed fee cut. It has been suggested that those academic institutions which are already experiencing financial struggles will not be able to cope with the decrease in annual income. The Liberal Democrats have said that the changes will only benefit graduates who earn over £35,000 per year. However, Shadow Secretary Charles Leslie said, “We have got to help the public finances because the current system is imploding”.
What do you think? Is there a need for change and, if so, is this the right move?