UK universities in trouble - why not add VAT to tuition?

[80smonster]

UK universities are in trouble, apparently many could close, why not charge VAT on tuition fees (for those that are financially viable)? Bridget Phillipson says they are autonomous institutions and won’t be given a public bail out - they should rely on their own resources:
https://www.theguardian.com/education/article/2024/aug/09/english-universities-face-autumn-tipping-point-as-financial-crisis-looms

YABU - don’t add the VAT
YANBU - add the VAT

So you know admission is merit based but the scholarships are needs based. That is, if you manage to get an admission you will be provided with the means to attend based on your financial needs.

Approximately 100 UK students and rising enrol at Yale each year. Most will likely be wealthy anyway.

But if any had an annual family income less than circa £70k - they would qualify for a full ride

I agree - VAT is silly for university. But how do you fund 30-40% of the population going to uni without tuition fees. I think there should be tuition fees as the student gets to have a stake in their own further education and they are adults at that stage. But I feel parents should save and plan for it from birth and there should be grants for those with very low incomes

Then who pays for it?

There are tuition fees and there is a loans system.

The poster said she does not believe there should be tuition fees. Hence my response stating what I think would work better than no tuition fees, or even tuition fees with the current loan system

What happens to those whose parents can’t or won’t save £70k per child? The vast majority won’t with the cost of property, rental and the cost of living.

What does spoon feeding even mean?

It’s one of those phrases that gets mentioned every time there’s a thread about private schools like ‘entitled’, ‘unqualified teachers’, ‘privilege bubble’, ‘posh snobs’ etc.
I guess it means something like the teachers teach the syllabus and answer questions about it. Or something like that.

You are right that VAT isn't the answer.

You are also right that the public gets what it is willing to pay for in taxes.

Pay little, get crappy state services - be that the NHS or schools not fit for purpose.
Pay more, and hold politicians accountable for services - get an improvement. Or so goes the hope.

I did take the paraphrase to its inevitable conclusion, so yes, I took a liberty. I agree with you that at present there is a choice - but only for those who can afford it (and for those who have taken care to live in a grammar area).

In my opinion - grants for those with low incomes (similar to say FSM, government determines what low income is). The others save for their kids to go. Government announce it so that those with kids from Year 3 downwards know they have to save for them to go if they want them to. So everyone has a minimum of 10 years to save and future generations have 18 years at least.

Loans available but not the types that you never pay back.

Apprenticeships and trade options made more widely available.
Universities allowed more leeway to set fees so they are not perpetually on the brink of bankruptcy but some legislation in place to ensure they are reasonable. International students very welcome but workforce plan in place to ensure there are enough places to support workforce needs for the UK (since internationals may go back to their countries or elsewhere).

There should be fewer universities and employers should recognise accredited apprenticeships as equivalent where appropriate.

For someone from a family with a household income of say £40k - going to university to obtain a degree that increases your value in the marketplace and coming out with little to no debt is more likely to improve social mobility than the current situation with degree inflation and no real added-value/differentiator to many of them

Ridiculous.

The life chances of adults decided by parents they no longer live with.

Very few families now will be able to afford £70k per child when most are struggling to get on the housing ladder.

Are we overlooking the fact that a cornerstone of an economically successful country (one with high wages, good public services, high growth etc) is a highly skilled, highly educated workforce. Which yes means traditional highly skilled jobs (drs, engineers, computer scientists, professors etc) but also those with vital skills to make the rest of the country work (nurses, tradesmen, farmers, teachers).

The more we can upskill our populace, the wealthier we will all be as a country. A successful university sector is vital.

The biggest problem facing universities is a large drop in the number of Chinese students choosing to study abroad. This was a cultural change that happened during the covid lockdowns.

It’s not possible to replace these students. Chinese students are wealthy. They come to study, they don’t bring dependents, they don’t break visa terms, they don’t seek work visas. Politically it’s not possible to encourage students from poorer countries because they nearly always want to stay here either legally or illegally.

Current loans are linked to parental income. And life chances of individuals are markedly determined by their parents - newsflash. More important factor than type of school for instance.

And many countries have models where parents save for university costs to set them up.

£100 a month per child would make a huge dent in that and summer jobs leading up to uni; the child gets to go to uni with little to no debt

Well I think we all know current loans are linked to parental income. It’s a stupid system however better than the even stupider system of making parents shell out £80k for future adults as opposed to those adults getting loans they fund themselves.

£18k is not £70k.

I'm not wrong. I live in the US, and for various reasons that I'm not going to go into here, I am very aware of how scholarships and financial aid work for both domestic and international students.

Tuition is not the same as "cost of attendance".

A student looking to go to Iowa on international student merit scholarships plus a patchwork of other scholarships (faculty merit, special interest, specific population/ heritage, etc) would be trying to 'enter by the eye of the needle' - and there would be no real reason to do so when there are better universities in the US and elsewhere.

The bottom line is that an international student at Iowa would have to come up with $50k-$54k every year. This number is the cost of attendance, which is comprised of tuition, plus room and board, plus required incidentals such as various fees and student health insurance. As you can see, cost of attendance is significantly higher than tuition alone.

Depending on cobbling together several scholarships wouldn't be a good idea unless the student was either very gifted academically or very reckless, or had the bank of mom and dad to fall back on if the scholarships went to someone else. If they came up short for whatever reason, the bursar would politely explain to them that without their check for the full amount owed per semester, enrollment wouldn't be possible.

If very brilliant, why not try to get into one of the half dozen or so universities that offer a full ride to the highly qualified international applicants they welcome, if family finances mean they otherwise wouldn't be able to attend? MIT, Harvard, Princeton...

Being bright isn’t enough for those 3 unis on a full ride. Insanely bright students will find it harder than Oxbridge. You’re competing against the whole world and need to have something different in addition to being the best of the best with beyond impressive relevant extra curriculars.

£100 a month over 18 years is £21k; saved in a global ETF tracker fund at 5% annualised interest (conservative) is £35k. That is half of what is required. Better than facing the prospects of carrying the burden on your own at 18 but you do you.

University of Iowa was a random example as I know someone there on multiple scholarships - who is academically gifted.

Cost of attendance is exactly that - I mention that in another post. It is the same concept in most countries - tuition, board, books etc

And my posts always referred to academic giftedness and other (e.g. sport). However I do know that sport in the UK is often elitist unlike parts of the States

If it helps, we lived in the US, hubby went to university there and we still have family at uni there.

Also posted about the 100 or so UK students that go to Yale each year. Most likely wealthy but if a non-wealthy kid did get admission, they would be eligible for needs blind support up to full ride

But why would anybody want to go to Iowa or any other obscure US uni as opposed to a perfectly good UK uni with safe funding that UK employers would have actually heard of.

US degrees are different too. Broader. Suits some but not everybody or all careers in the UK.

@ImpossibleTh1ng This is, of course, why we have loans. Unis do give bursaries to fsm dc. This can give them more ready money then those from hard up slightly higher earners who might have two at uni at the same time. As we’ve been doing this for years, has it worked for social mobility? Not entirely sure if we have data on this.

I do actually think new parents should be encouraged to save for uni if they can. So many still don’t understand they should pay, therefore info given when dc start school would be good. Even a high interest savings account to be used for this could be launched. Info is key,

Needs blind at Yale is harder than getting into Oxbridge. The entire world will be applying.

The broadiness is the appeal for many. A liberal education. I feel the UK narrows far too early. Basically at Alevels

I agree re random US uni - the topic came up based on comments made earlier in the thread

Why would we want to charge our young people more money?
Many adults got a free degree.

Young people need to get out there and vote - get their voices heard!

I agree - we need to be looking at ways of supporting them so the next generation is better off than the one before