Augar Review
Ed-1
Forumite 3.7K Posts
Several reports are stating that the main recommendations to government of the post-18 education and funding review ("Augar Review") to be published on Thursday are:
https://cherwell.org/2019/05/27/government-review-calls-for-tuition-fees-to-be-cut-to-7500
https://inews.co.uk/news/education/slash-tuition-fees-and-student-loans-interest-government-review-to-recommend
https://www.thetimes.co.uk/article/cut-university-tuition-fees-to-7-500-and-slash-interest-on-student-loans-review-n8lbkhz3s
- To cut the maximum tuition fee cap from £9,250 to £7,500
- To cut the maximum interest rate from 6.3% to 1.5% (government cost of borrowing)
- To extend the cancellation (write-off) date from 30 years
- To bring back means-tested grants
- To increase part-time support (distance learning?)
- To increase FE and vocational support
https://cherwell.org/2019/05/27/government-review-calls-for-tuition-fees-to-be-cut-to-7500
https://inews.co.uk/news/education/slash-tuition-fees-and-student-loans-interest-government-review-to-recommend
https://www.thetimes.co.uk/article/cut-university-tuition-fees-to-7-500-and-slash-interest-on-student-loans-review-n8lbkhz3s
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That won't be welcome!
Personally I'd prefer them to reverse the increase to the plan 2 threshold to bring it back into line with plan 1 and postgrad loans (as frankly it's so high that most who started on plan 2 are paying nothing or next to nothing back) rather than increase the period before write off but it's clear something has to be done to reduce the cost of loan write offs to taxpayers.
If the aim is to reduce write=offs, reducing the loan size (by a tuition cap) and reducing the interest rate will both help.
I mean the overall cost to taxpayers rather than write-offs themselves. Reducing the interest rate (to a lower level than plan 1 loans incidentally!) will reduce write-offs but increase the overall cost to taxpayers substantially.
Lowering loan outlay (although the increase to maintenance support may mean the overall outlay isn't reduced) by lowering the fee cap will lower write-offs and the overall cost to taxpayers.
Re-introducing grants will increase the cost to taxpayers and lower write-offs (through lowering loan outlay).
Plan 2 loans are going to end up being a far superior deal to plan 1 loans: substantially higher repayment threshold that increases faster too (uprated by earnings rather than inflation) and a lower interest rate. Even a shorter write-off than some plan 1 loans which last until age 65.
I see Martin Lewis apparently contributed to this. He raised the things I quite quickly realised that for the vast majority of people this ‘cut’ will actually mean most people will end up paying more in the long run. I don’t think he made the point very strongly though.
IMO perhaps they should just make University fees ‘free’ for students from the U.K. with the government picking up the tab but just introduce a new ‘graduate tax’. Would stop all the wrangling with how much the fees are and psychologically better for the student who won’t feel as if they have a huge debt hanging over them after they graduate.
Opinions?
Who’s going to pay the tax do you mean? Anyone who has graduated, enforced the same as any other tax or how the SLC repayments are currently through PAYE, self assessment etc.
https://forums.moneysavingexpert.com/showthread.php?t=6006457
Thanks, if a mod comes along feel free to merge this in. I used the search for student loans, tuition and university and couldn’t find anything. Don’t pop along here very often any more, I can see the regular posters are still as rude as ever.