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

Reading this with increasing disbelief. We as a nation need a highly educated workforce to succeed. A middle income just over the threshold for anything more than min loan household who struggled to support ds at an expoly( with better employment rates than the Russell group uni in the same city) how on earth is raising student loans and adding vat going to help. Students just won't go. We won't have teachers, health care staff, engineers etc. Yes apprenticeship sound fab on paper, degree apprenticeship are few and far between and are in general more competitive than medicine to get into. Wages for apprenticeship are often only £6.50 an hour so you have to fine one within commute of home fine if your in a city sh*t if your not. Very able academic dd is currently thinking she may not go she's a straight A student doing math, bio, chem, but the cost scared her to death, many of her friends say the same thing. All very bright but not affluent kids. We are about to loose their potential and need to fund this properly for all. I should add its made worse by seeing her scottish cousin with richer parents get a free degree. As we are supposedly one country this also needs addressing. For those of you saying part time job, she's tried all summer but there is nothing near us that is not filled by the semi retired or you need to be 18 for, so not until next July. My suggestion yes increase degree cost to support uni , give every adult the same amount, based on mimimum wage, paid back on the loan at the current Base rate only, not the current 7 to 8% charged. Reduce degree length to 2 years. (Completely possible for most degrees) Once working in a role that needs your degree ( with the exception of public sector, who just get a discount) your employer also contributes to paying of your loans at a set level of 3% above £25000 or equivalent for example. So costs covered, degrees shorter so less loan, appropriate ways of paying back and buisness contribution to cost of traing their staff. Unis better funded. Less economally viable degrees lost.

Agree with shorter degrees where appropriate. And reducing the repayment rate.

Employers contributing to cost of training their future staff....not sure how that would work. They should just pay decent salaries.

And I don't agree that every student should get access to the same loans. Also feel strongly about grants for those from low income households but someone upthread said they get bursaries - which is as it should be.

I agree that money spent on education is an investment in the future of the economy but where do you suggest the money comes from?

Other than the typical MN response of "tax the rich " where rich is defined as anyone earning 50% more than the poster or increased debt which as Liz Truss found out the hard way is not an option.

In Wales everyone gets the same amount, thena count you pay back is i belive dependant on household income. But tbh while I support kids from lower income families getting more support in the current system, why are we basing loans for adults on their parents income?

They are barely adults and they are our offspring. I feel like in the UK, if you don't have legislation to support your kids beyond 18, most would chuck them out the second the clock strikes midnight on their 18th birthday.

If you, as a parent, don't see it as your duty to help support your child into early adulthood - why should I (the taxpayer) do so? No 18 year old can do it on their own - so if parents don't help at all, it is all on the taxpayer and the 18 year old. Parents have a lot of skin in the game - and rightly so

18 is arbirtary anyway - some countries have it lower and others higher. The brain finishes developing in your early 20s. It is not infantalising to support offspring that are clearly not yet financially independent and staying in full time education. And these loans don't just disappear into thin air - there is a risk to the lender. It protects the taxpayer/lender, especially in a low wage economy where it seems most of it is bad debt anyway

I think the uni set up needs a clear thinking review. There are courses where students attend lectures / practicals 9-5 4.5 days a week, have heavy homework, self study and assignment expectations. There are not all courses with clear vocational outcomes like medicine and law.

Other courses have just a handful of attendance hours per week, little additional study expectations, and additional 'reading weeks' .

Students taking these all have the opportunity leave that uni with a certificate showing a 1st, 2:1, 2:2 etc. and in many cases those certificates are seen as equally valuable or useful despite an enormous difference in study and teaching time.

Absolutely bonkers.

Many Universities also shot themselves in the foot when they insisted that students could perfectly well take their courses online during Covid instead of admitting it was a necessary but very poor alternative to attending and being taught in person. It devalued their offer and the value of attending university althogether.

Falling birth rates and the sad state of the economy forcing young people to feel despondent about their chances of financial security are other factors.

It probably has been mentioned as I’ve not rtft, but I presume you mean in England. Not uk. Because in Scotland, we don’t pay university fees.

your employer also contributes to paying of your loans at a set level of 3% above £25000 or equivalent for example

I think this would be a fabulous way of encouraging employers to recruit non grads or take their graduate jobs to other countries.

But parents have nothing to do with the paying back of student loans these adult 18 year olds are responsible for. Parental income is not considered for any benefits post 18 as recipients are adults. They are adults in all sense of the law- medically, educationally,socially…..

This bonkers system is pushing more and more students into poverty and mental health struggles. To get the full loans households have to be earning less than £25k. The minimum loans do not cover costs and families can’t afford to top up. There is a CoL crisis and a rental crisis. Parents often struggle to pay mortgages, heat and feed families in their own home so expecting them to be responsible for running another is ridiculous.

So from a long line of plumbers....

To be successful, you need to be gas registered ( unless you particularly like to spend your entire time unblocking toilets.....) and that means finding someone who will take you on as an employee, pay for your college studies, only for you to leave once qualified and set up your own business.... same with electricians.

There isn't this obsession with Uni, only about 36% of school leavers go to Uni, similar to the EU average.

If we want more trades, we will have to make it easier to qualify in them, whilst still keeping standards high.

@ImpossibleTh1ng If they don’t earn much as grads, they hardly pay anything! They don’t have a debt that must be paid off.

Neither have we become a richer country by having more English grads from the uni of Blah. Far too many grads don’t get grad level jobs. There’s a need for humanities grads but at decent unis there is hard work involved. It’s not school snd self study is vital for the workplace. As is learning how to research and hone critical thinking. So we need to ensure we fund enough grads but not fund those who aren’t likely to get grad work.

We, as a nation, have £285 billion in outstanding student loans. Until recently 50% were written off. Students are hardly all worrying about debt and paying it off! The key is to get parents to save, ensure degree leads to a job and get value from the degree. By the way, far more students do law then ever get near a job as a lawyer. Solicitors and barristers have a myriad of first degrees. Around 50.% not law degrees! So we could probably cull some of these law courses too,

Employers pay the apprentice levy, so they do contribute. The big issue is lack of opportunities everywhere.

Making an adults chances reliant on parental choice is ridiculous and just feeds the disadvantaged being shut out. Would sort out the private school issue though as very few families will be able to afford private fees and uni fees. Interesting how so much bellyaching is made re paying VAT on private school fees and apparantly everybody should just cough up uni fees for future children.

Apologises, quoted the wrong poster

Where does the money come from?

The Govt spent £29 billion on HS2, then cancelled it, that money has gone, wasted, according to HMRC, £40 billion of tax is avoided via off shore arrangements, not illegal but not what should be allowed to happen either.

Govt spent £4 billion per year on IT projects which then turned out to be fraudulent.

The 10% entrepreneurs tax rate relief has cost the UK Govt over £10 billion..... made many businesses extremely wealthy.

Close the difference between earned and unearned income rates...

Would cost £10 billion to make FE/HE free (in England) but we don't need to do that, fee's could be halved and interest charged at BOE rate.

If all of Europe has free or very cheap Uni education, why can't the UK ?

Young people are going to find it increasingly difficult to own a house parents who have a spare £70k ( the vast majority of which don’t) would be far better putting it towards housing for their offspring.

Parents don't have that now because they have never had to think about that for their offsprings. It really isn't on to plan that for perpetuity, we will have a society where people will not be able to save £100 a month for their own children

Young people will not find it difficult because we will work to improve access to trades, to vocations and to university. The proverbial 'we'. That is - government and the rest of society. Including those that gave birth to them

I don't have the exact solutions - some good ideas above including options to shorten some degrees (in the States, you can take credits in the summer or even pre-university).
But any solutions should include parents with enough notice to change culture

£100 a month ( a child)does not cover £70k in uni and maintenance fees (a child)or cover help for buying a house which frankly is going to be crucial going forward.

It does not - but it covers half of that - for a parent saving from birth to 18, with compound interest of 5% annualised.

Saving for a house deposit will be important but few buy a house till their mid to late 20s. And a solid education/training stands them in the best stead of buying one

A uni graduate with a graduate job is still in a great position to buy a home. Not in Central London, but in much of the country. Especially if they have little or nothing being deducted from their paypacket.

Random example from near London.
1 bed flat to buy in Luton is anywhere from £180-£250k. Therefore 10% deposit is circa £25k. The average graduate should be able to earn the median wage (circa £35k) within 2 years of graduating. University should carry that sort of premium and rising. That graduate can buy a 1 bed within 5 years of graduating by saving up over that time for a deposit. Hopefully they have progressed over that time as well.

An example is the Civil Service graduate scheme - starting salary of £31k. Salary of 45-55k after 3 years. You don't need a deposit handed to you at 26-28, if you are competitive in the workplace with supportive parents in the run-up

You really have no idea.

This is what 'should' happen. So addressing the uni sector and trades and apprenticeships and economic growth should make that happen

Focusing on house deposits for adults in their 4th decade is even less of a solution

@newmummycwharf1 Unfortunstely vast numbers of grads do not earn that. You are also assuming they live at home. What higher paying rural jobs are there? Teaching? A few others but not many. Then there’s travel? What is available and to where?

The civil service grad scheme is ludicrously competitive. Thousands get nowhere! Are these jobs in rural areas? Obviously not. So then rent has to be paid. Average starting salary quoted by HESA is just over £27,000. For higher paid professional roles it’s nearer £33,000. These are averages. Not guaranteed earnings. They vary by sector and region.

I don’t believe parents should pay everything for uni. However vast numbers don’t see it as anything to do with them. I think we cannot have vast numbers going to uni who don’t contribute a lot afterwards being funded by loans the state pays for. We need to be more discerning.

Who ever thought HS2 was £29 billion - not sure what planet you are on. It was well over £100 billion. And, guess what, some of it’s being built! London to Birmingham and that’s estimated at up to £65 billion now and they cannot afford to get it to Euston. It was Labour’s big idea! Bigger fools them.

@newmummycwharf1 you've never spent time or worked with people living in deprived towns and villages have you? Ex-mining towns in Yorkshire for example?

Reduce degree length to 2 years. (Completely possible for most degrees)

So costs covered, degrees shorter so less loan

Squeezing three years teaching into two won’t make any difference to the cost of tuition.

Oh I know this and also that the CS fast track is very competitive. I said 'should'. What the situation should be or at least what I think it should be. We need to get to where going to university means you are sought after and earn a premium
And trades and apprenticeships are an alternative too

Yes, and students won't have time to work and support themselves.

Yes, and students won't have time to work and support themselves

I was just going to say the same.
We do offer some 2 year accelerated degrees. They aren't very popular and tend to attract mature students.