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To Find the Answers, We Must First Identify the Problems

Jan 30 2008 13:38
Jon Matthews
Jon Matthews searches for a fairer funding system, where students do not receive support based on the incomes of others .. and don't have to live on porridge.
Jon Matthews

As we engage in the Higher Education Funding Debate, we must all keep a couple of points in mind: One, we must be pragmatic, we cannot fight for a situation that is simply not possible or unjustifiable; if we were to say that we believed in a free education that would be fine, provided we could respond with a reasoned and persuasive argument when someone answers our statement with a simple question: why? Two, Universities charge top-up fees, this battle was lost, the war may not yet be over, but that particular battle is long gone, we need to stop licking our wounds and move on. We will not be able to stop Universities charging fees under the current system, either we argue the whole Higher Education System needs to change, or we accept fees, try to make them fairer and stop them increasing to unaffordable and unsustainable levels.

What are the problems?

In order to fully address the problems in Higher Education Funding, the government must first address the problems in education itself and their ridiculous target setting. Last year, only 45.8% of school children attained the equivalent of five GCSEs at grade C or above when one includes English and Maths (the government?s ?gold standard?). David Frost, director general of the British Chambers of Commerce branded this figure ?unacceptable?. ?Instead of leaving school ready for the world of work, too many teenagers simply do not have the necessary skills to enter the workforce?; the government seem to have heeded this message, their target is that these school children will not enter the workforce but the Universities. The question must be asked: If fewer than 50% of the nation?s school children are capable of attaining five GCSE?s at grade A*-C, how can 50% of the nation?s school leavers be of the standard required to attain a degree?

The biggest problem with Higher Education Funding is that there are now so many people in higher education that there is not enough money to pay for them. Should our Union be calling for a system that increases the number of people in University regardless of whether or not these people have the aptitude or ability to study to degree level? The answer to this question can never be yes, our Union should be concerned with our students and our students suffer from their degrees being devalued by a large number of graduates without the skills required by employers; they suffer from a lack of funding as money is being diverted to pay for ?Mickey Mouse? degrees at other institutions. These degrees and the access to them is not the concern of our Union, our line should be what is best for our students, that of fewer, better funded University places. We can call for a free education for our current and future members, but only at the cost of a free education for others, whether or not we should do this is up to you.

Is a free market the right thing?

Some people may hold some of the American Universities as being evidence that uncapped fees and a free market can work. For example, Harvard charges the full economical cost of its degrees, about £17,000 per person per year but is a socially inclusive University that actively seeks out the best qualified applicants regardless of social background. If these students cannot pay the fees, there are numerous bursaries available in order to allow them to commence or continue their studies, the system works. The problem is that no British University, not even our oldest University, Oxford, has the money to do this. Perversely, British Universities simply cannot afford to charge the full economic cost because they do not have enough money.

Where does the current system fall down?

One of the worst things with the current system is the means testing that determines how much one must find from other sources is based on the income of others. There is no obligation on a parent to pay the parental contribution, but their income is taken into account when it is decided how much money a pupil has to contribute to their education. The system in place does not adequately determine the ability to pay either so there are situations where the parental contribution is set at an unaffordable level for the parents; the parents cannot provide the student with this money and so the student loses out.

Another critical issue is the interest rate on the student loan, an integral part of Higher Education Funding. This has just been hiked from 2.4%, in line with inflation as it was always marketed, to 4.8% and no-one blinked. Rail fares went up by 4% and it was headline news, student loans go up by more and the Unions whose job it is to protect student interests say nothing. The current funding system has gone from a not-for-profit system where, in real terms, one paid back only what one borrowed to a profit-making enterprise for the companies that are buying the debt of the government.

Where can we go from here?

Despite the above problems, the current method is, strangely, not that far from a good model but it very definitely comes under the banner of so near, and yet so far. Lending students money in order for them to live is not a good situation; they are forced into debt, this is not borrowing because they want a better car or newer clothes or the latest gadgets, this is borrowing because they need to eat. I have seen first-hand the problems this can cause, I have seen students (and been one myself) who pay their halls rent only to find that they then only have a couple of pounds per week left or, even worse, their rent bill is higher than their loan amount. This is a separate problem but needs to be considered at the same time as we consider the source of the funding, the amount of money available must be enough to live on, not less than the rent charged by the institution at which one is studying. I know of students who have lived almost exclusively on porridge for over a month as it was about all they could afford, how and when can a funding method that reduces a highly able and gifted student at one of the world?s best institutions to a diet one would more expect from an aid package ever be considered fair or adequate? As we consider how the gap between governmental funding to an institution and the real cost of the education is funded, we should also consider how a student?s living costs are funded, is a loan the right thing, is there a better way of doing it?

The current system essentially creates an account to pay off the cost of one?s education. Repayments are based on one?s earnings until this cost is paid, had the interest rate really been the rate of inflation, one would only be paying what one?s education cost. Had the loan not been means tested and based on the income of others but automatically provided it would not have been seen as a loan by many people and would have less stigma attached. One would be paying for their education based on their graduate salary.

A possible model would be that Universities charge top-up fees to meet the gap between the amount of money the government pays the University per student (and no more than this, institutions should never be profiting from tuition fees) and this cost is recorded in an education account linked to National Insurance. Graduates then pay off an amount of this debt based on their annual salary with the value of the account adjusted only for inflation. A time limit on repayments (similar to the age limit of 50 now in force) should be imposed with a set amount to be repaid each year, if a graduate does not earn enough money in the year to make that repayment, the remainder should be written off, the repayments then become dependent on the graduate?s salary not that of their parents.

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Discussion about “To Find the Answers, We Must First Identify the Problems”

The comments below are unmoderated submissions by Live! readers. The Editor accepts no liability for their content, nor for any offence caused by them. Any complaints should be directed to the Editor.
Jan 30 2008 14:12

On the issue of bursarys people might be interested in a question in the Lords on the 29th Jan and also the full report is here . Obviously I will not be commenting about.

2. Hmmm   
Jan 30 2008 23:45

It could be worst than porridge, I've seen people survive on Union pies and pasties (and whilst this statement may seem funny, I'm actually being serious).

3. Hmmm   
Jan 30 2008 23:46

*Or it could be worse

4. ant   
Jan 31 2008 15:01

"I've seen people survive on Union pies and pasties"

They must have been the rich kids....

Jan 31 2008 16:44

No, Union bar staff get an allowance which is intended to be used on a drink at the end to relax after a shift, but can be used to get pies or crisps etc... no money passes hands.

Union stewards get food vouchers to swap for union catering food whilst working.

I'm not attempting to paint the picture that all union employees are starving and broke, most do just do it for fun/pocket money/to improve their english etc, but sometimes some are really are struggling.

Can we have a Sabb equivilent to "supersize me" and make them eat only union food for a month, to see what the effects are? Or do they do that anyway?

Jan 31 2008 17:26

Where do you think 'sabbatical spread' comes from?

Jan 31 2008 19:37

There is an important point to all of this.

Whilst the government have attempted to link degrees with increased salary, is this really true for all Imperial students?

Yes, perhaps if you use your degree to enter the city or industry where it is very likely that you will end up earning loads.

But what happens to those who chose a life of accedemia and research? Are Imperial post-doc salaries comparable to a salary of an Imperial post-grad entering the city?

Any funding model and higher education policy needs to reflect the fact that Imperial is not here to purely to produce CV monkeys to be recruited into the city. It is important that any HE policy we produce is balanced and addresses the needs of all our students.

Feb 04 2008 17:32

In your proposed system, taking a set amount could work, but I think the way it is now (proportional to yearly income) is better.

You mention striking off the repayment if the graduate has not earned enough - how could this happen? The amount must be a small proportion of their yearly wage, otherwise you might find the situation where the repayment is comparable to the yearly income. This is ridiculous, as the graduate would be paying their entire wage on repayment. Let alone striking off the remainder (they have spent their entire years income on the repayment?).

Also, the system is not only flawed in giving out too little money to those who need it, but giving too large a loan/bursary to some. A good friend of mine is considering investing a large amount of his loan money, since he believes it is not being used at the moment.

Feb 04 2008 18:03

You seem to have misunderstood my point with writing off sections of the debt. The amount paid would remain to be a small percentage of income and would never be the full salary, this really would be silly.

However, a set amount to be repaid each year should be calculated. If the graduate earns enough to pay this from the pre-set small percentage then they do so, if not, they pay the same small percentage and the shortfall to the minimum annual payment is written off.

To make this clearer (with completely arbitrary figures):

  • Graduate minimum to be paid ?100
  • Graduate A earns enough above threashold to pay ?175: ?175 paid
  • Graduate B earns enough above threashold to pay only ?75: ?75 paid, ?25 written off
  • Graduate C does not earn above the threashold: nothing paid, ?100 written off.

Hope this clarifies things.

10. Hmmm   
Feb 04 2008 19:27

Could the figures work? Perhaps, although in practise there would need to be fewer people entering the HE system...

Perhaps we should ask the question, do you believe that the government should profit from student loans?

No, don't recite the linked to inflation line...

That works only if the rate is actually linked inflation, RPI in december fell from 4.3% to 4.0%... well below the 4.8% currently charged on Student Loans.

Also if we only pay back what we owe, why are the interest charges linked to inflation also, rather than just the original sums borrowed...

You could argue that if the student has the money in the first place and kept it in a savings account they would earn compound interest and so in real terms it is fair that students loans are also subjected to compound interest...

which is fine, but lets stop pretending that the government is running student loans "not for profit" and start thinking about how we really think of HE system should be run.

11. YAWN   
Feb 10 2008 05:54

I'm so bored reading this article, I ripped my eyes out and shoved them into my anus

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See Also

  1. Union Launches HE Funding Survey
    25 Jan 08 | News
  2. Take a step back from it all
    25 Jan 08 | HE Funding Debate
  3. Imperial Rises to 5th in World
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