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Martin Lewis: Why cutting tuition fees bizarrely..

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MSE_EeshaMSE_Eesha MSE Staff
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This is the discussion to link on the back of Martin's blog. Please read the blog first, as this discussion follows it.




Please click 'post reply' to discuss below.

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  • edited 19 February 2018 at 1:44PM
    telemarkstelemarks Forumite
    255 posts
    Mortgage-free Glee!
    edited 19 February 2018 at 1:44PM
    Great article from Martin, again highlighting how bad and unfit for purpose the current system is, and addressing how it is misunderstood by many people.

    Having two children at university as a family we have spent a LONG time discussing this and suggest this alternative.

    1/ Fund Universities centrally, based on performance, on value added
    Government totally funds universities based on the amount of students performance improvement and research value. The better quality of the courses and research, the more funding universities get. Also allowing Government to target more reward for courses that are seen to be needed by the country.

    2/ Fuller Independent validation of degree grading
    There is much talk about grade inflation in degrees. The fact is "the percentage of students gaining top first-class degrees has doubled in ten years". If universities reward is based on performance this has to be independently audited.

    3/ All students receive full living costs grant every year.
    Only situation a student has to repay, is graduated repayment if student misses 25%+ of scheduled contact time (without good reason)

    4/ Students pay a simple graduate contribution per year of education
    After completing their course students pay 2.5% extra higher education contribution (tax) for each full year completed in taught higher education, on all earnings above £25k (earning linked) for 25 years post higher education


    No loans, no debt, no stigma, no requirement for 3 years taught courses. Just KISS.
  • michaelsmichaels Forumite
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    It is depressing that society is so innumerate that changes that make university attendance charges more regressive will probably reported as a 'victory'.

    One problem with the current graduate tax in all but name system is that it is regressive at the very top where those who do pay it off end up paying a lower marginal rate than those who don't and as Martin points out this may well be worsened in the name of making the system appear less burdensome.

    I would also like the system to focus students mind on the value of the subject they choose so they think about choosing based on what they will get paid afterwards not just what they think they will enjoy. Not sure how to arrange this though.

    Next the system should give equal support to vocational training and different length courses - tertiary education comes at a huge cost to the economy, not just from the tuition and subsidence fees but also the opportunity cost of lost years of work.

    Finally it would be good if we could use the system to encourage students to do degrees that were thought to be economically and socially useful, so perhaps lower fees for those doing stem subjects but also nursing, social work etc.
    I think....
  • MalcBridgeMalcBridge Forumite
    13 posts
    I think that Telemarks has proposed a sensible and workable solution and support his first three points (value-based funding, independent validation of degrees and maintenance grants for all) points with minimal qualification. However, I should like to suggest that, before introducing value-based funding, a hard look be taken at what constitutes a University. The traditional University model is based on research and teaching taking place in parallel, with the latter being carried out by active researchers. This is an excellent but expensive form of tertiary education and, in my opinion, its cost is only justifiable when the research can be justified in its own right. Many of our current Universities fail to satisfy this research requirement so I suggest that they be reconstituted as some other, less costly form of advanced teaching establishment, thereby reducing the overall tertiary education budget.
    Which brings me to my final point. While Telemarks’ fourth suggestion (a tax on recent graduates) would be a significant improvement on the current, shambolic system, I should like to see a more general further-education tax applied to all beneficiaries of publicly-funded, tertiary education after the age of 18. More radically, I suggest its retrospective introduction to as many previous beneficiaries (like myself) as can be traced. By spreading the load so much wider I think the tax could be as little as 0.5% per full-time year equivalent of post-18 education rather than the 2.5% suggested by Telemarks.
    Whatever way forward is chosen, KISS is the key.
  • MalcBridge wrote: »
    I think that Telemarks has proposed a sensible and workable solution and support his first three points (value-based funding, independent validation of degrees and maintenance grants for all) points with minimal qualification. ...

    Which brings me to my final point. While Telemarks!!!8217; fourth suggestion (a tax on recent graduates) would be a significant improvement on the current, shambolic system, I should like to see a more general further-education tax applied to all beneficiaries of publicly-funded, tertiary education after the age of 18. More radically, I suggest its retrospective introduction to as many previous beneficiaries (like myself) as can be traced. By spreading the load so much wider I think the tax could be as little as 0.5% per full-time year equivalent of post-18 education rather than the 2.5% suggested by Telemarks.
    Whatever way forward is chosen, KISS is the key.
    Many thanks for the kind comments MalcBridge.

    I like your radical idea, it does seem fairer to spread the cost out a bit more. Many who have paid off their 20 year old student loans may baulk at the retrospective change, but perhaps the thought they are helping reduce the cost for their children may mitigate this.

    After all, I spent 3 years studying at a Polytechnic over 30 years ago. Is it fair I have NEVER PAID A PENNY for my education? (No, obviously it is not).

    Especially when you consider that back then:
    • My course fees were fully paid (£1500 I believe)
    • I got a full maintenance grant to pay all my accommodation and living (beer) costs, that I did not have to repay.
    • I could sign on and get Income Support In Summer Holidays, AND at Easter and Xmas breaks.
    • I could claim housing benefit to pay rent on my student house over summer, even though I did not live there all the time.
    • I could claim the cost of one return trip home per term via train in my first years. (no proof needed:rotfl:)
    • My rent was £7.50 per week in my shared house.
    • You could get a pint of Mild in a town pub for 26p, the Union was 49P p/p:beer:.

    With all that i actually fet quite rich as a student, some friends were in debt, but not many.

    In the words of Monty Python ...
    And you try and tell the young people today that... and they won't believe ya
  • Rich168Rich168 Forumite
    4 posts
    Ninth Anniversary Combo Breaker
    MoneySaving Newbie
    The potential student is offered a loan typically at 17 to advance their education, benefit themselves and UK plc. All students are charged RPI+3% until the April after they graduate which seems unjustified, at which point the application of the additional 3% depends on their income. Generally I agree with Martin Lewis's approach but I have to challenge his acceptance of the interest applied to these post 2012 student loans. All students should be charged the cost of their education plus an interest rate that matches the rate at which UK plc can borrow. Thus we the members of UK plc effectively borrow money to invest in student education in the hope of advancing the interests of the country and its people. The more financially successful students who have worked hard in demanding subjects and gained well paid employment will pay more tax through the normal tax system and pay back the investment in their education as a result of the 9% "graduate tax". I suggest there is no justification for increasing the debt owed by these financially successful graduates by applying a punitive additional interest rate to their loans. Let's remember that UK plc will already be benefiting from the higher rates of tax that these graduates will have been paying. Shouldn't we celebrate the graduates who manage to pay off their student loans in full rather than applying punitive interest rates that will make this unlikely for the vast majority of graduates?
  • RickOGRickOG Forumite
    1 posts
    Second Anniversary
    MoneySaving Newbie
    Although in theory education teaching) and research go in parallel, most academics spend most of their time with teaching work, and related admin work. So it is not the case that fees subsidise a lot of research. Moreover, that research means that the teaching remains current and cutting edge. Unlike at secondary level, where the content of curricula only need to change on a cycle of years, the content at univ should be current each year. Updating that takes time and knowledge. So you would lose a lot if you strip away the research side of things.
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