MSE News: Labour to cut tuition fees to £6,000 a year if it wins election

Former_MSE_Paloma · 27 February 2015 at 4:47PM

University tuition fees will be cut from £9,000 to £6,000 a year if Labour wins the General Election, Ed Miliband says ...

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Labour to cut tuition fees to £6,000 a year if it wins election

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Cyberman60 · 27 February 2015 at 4:50PM

There is already a thread on this today!!!

Corps · 27 February 2015 at 6:54PM

Lol this is great - it only affects those with who'll pay the loan off, so those earning above 30k. No difference whatsoever for most students!

The 1% interest rate isn't enough to offset the cheaper fees so means high earners pay it off a few years earlier so pay less altogether.

Im_just_careful · 28 February 2015 at 9:49AM

The £9,000 tuition fees was a flawed policy anyway.

Even at £6,000, the rate of repayment needs to be set so that it gets repaid in a reasonable length of time rather than being a debt for much of a working life (essentially a graduate tax on middle income earners).

More generally, I would argue that a lower proportion of post A Level education being degree based would do little harm, the return of the in-work (HNC etc.) qualifications as a higher proportion of the education mix seems sensible to me.

Caddyman · 28 February 2015 at 2:14PM

A cynical person would ultimately think having listened to Milliband talking about this promise, that it is merely a desperate ploy to attract votes at the forthcoming General Election from the younger voter. Have I missed something here? Or has Milliband fully explained exactly how he intends to pay for this grand gesture?

It'll be interesting to see over the coming next two months what other promises all of the Parties are going to trot out. Hardly surprising there is such voter apathy these days.

jamesd · 1 March 2015 at 12:20AM

The maintenance grant increase is useful.

The loan plan is to reduce tax relief today to reduce loan repayments by the better off students repaying loans twenty years from now. It's a short term tax grab justified by false claims that it's helping needy students.

This happens because the rate of repayment for loans hasn't changed. So the graduated or not former students just start to pay as they pay now and continue to do so through all of the most financially stressed early working years of their lives. Eventually the higher earners reach the point where they pay off the loan. A lower loan value will mean that more of them do, at lower but still high income levels.

So what do we have? A proposal to increase taxes in the short term on those earning £150,000 to mainly help in twenty plus years higher earning graduates.

Except the well advised earners of more than £150,000 will not actually pay more tax. Instead they will be advised that they can pay into a VCT and get 30% tax relief with a £250,000 paying in limit. And that five years later they can sell and buy another VCT and get another 30%. And they can repeat this for the rest of their life, so they end up getting more than 100% income tax relief instead of just 45%. As an added bonus VCTs pay income tax free and have no CGT. There are also EIS that have similar properties. Beyond those, for more mixed investments, there are offshore investment trusts. Those haven't been so useful in recent years but this will make them more popular again.

The plan is financially illiterate and won't work except as an election bribe to any students who are too poorly educated to realise what it really is. And since those students are at university we can expect that most of them will be financially literate enough to know it.

Meanwhile MSE has a useful financial education role in explaining why it's financially illiterate.

Pincher · 2 March 2015 at 1:32AM

Why doesn't he try to set the price of eggs while he's at it?

A year at a fee paying school is more than £6,000 by god knows how many multiples already. My company was paying £1,000 a week for a training course 30 years ago, and that was in Birmingham, in a not 5 star hotel.

All they have to do is create more scholarships and subsidised places. Yes, you do have to fight for it by passing an entrance exam with a higher score than the less competitive.

Kirstyroberts2 · 23 April 2015 at 1:57PM

How is it fair that there are now a number of students that are saddled with the 9k a year loan to pay off just because a government can not decide what to charge. Will we all receive refunds or have our debt revalued. I guess not. My degree is not worth anymore than the previous years and yet it cost me three times as much. Why should I be penalised just because of bad luck in timing.

Ed-1 · 23 April 2015 at 2:34PM

Kirstyroberts2 wrote: »

How is it fair that there are now a number of students that are saddled with the 9k a year loan to pay off just because a government can not decide what to charge. Will we all receive refunds or have our debt revalued. I guess not. My degree is not worth anymore than the previous years and yet it cost me three times as much. Why should I be penalised just because of bad luck in timing.

That's the way the cookie crumbles. But have you paid £9k a year - have you paid anything? If you've got a student loan the question is much more what might you pay and whether fees are £9k or £6k it may make little to no difference.

Also some students from less wealthy families may take the view that £9k fees are better for them as the universities are providing generous bursaries with the extra fee income. They may not be so generous under £6k fees and they certainly weren't under £3k fees.

MSE News: Labour to cut tuition fees to £6,000 a year if it wins election

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