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

The angry private school parents are so enraged that they are not thinking clearly.

Surely that is because our schools are failing and have been for sometime? There are only so many foreign uni students we can pilfer from our mostly better educated european counterparts.

having a few kids in the uni system right now I am amazed at some of the research and specialisms in some very niche areas. I am sure some departments could prune back but I think those are the elements the academics working there like.

Bit of a logic fail here, OP.

The government would have to stump up the cash to pay VAT back into the treasury, most of which wouldn't get paid back because most students don't fully repay their loans in any case. So student debts would be bigger on paper but neither the Treasury nor the Universities would be any better off.

Nice try though.

@JasmineTea11 Yes but if applications are falling, we need fewer places offering the degrees. Having places available doesn’t guarantee anyone wants them. Secondary teachers have degrees in subjects. So what we need are more mathematicians and scientists and MFL students wanting to be teachers. These aren’t in the lowest ranked unis.

Again you can join the police with any degree and train for social work too. How did we manage before 1992? We had all these people then.

So the government owned student finance loan companies would be loaning more money per student, how would that be a win?

They’d have to lend more to students and since many loans are never repaid, it’s not going to improve public finances.

Because so few people ever pay it back that it will just be a higher number that doesn't get paid back.

I think this is the bit op is missing. Not understanding where the loan comes from and how it's paid back/written off.

You do know HMRC collects tax to fund public services - right?

No, it’s actually due to lower birth rates, the U.K. education system isn’t that bad on the world scale.
https://www.gov.uk/government/news/england-among-highest-performing-western-countries-in-education

Are you able to understand that universities are not a luxury, and that private education is a luxury? This seems to be confusing you

A combination of high fees and young people doing apprenticeships etc has caused the fall in numbers.

The loan debt is already £285 billion. That’s us, the people, who are funding most students. Piling on vat is surely stupid? The unis don’t get it.

Vat would have to go to the govt, not the uni

It would hinder, not help!

A lot of university courses aren't worth the money they cost. They need to look at their courses and improve them to offer better employment prospects. Kids are looking at it with a critical eye and deciding it's not worth the cost, which is a good thing.

In this case, the VAT would be funded by student loans which is public debt…so the Gov would literally be borrowing money at RPI to pay itself VAT. Very bad deal.

There are only so many foreign uni students we can pilfer from our mostly better educated european counterparts.

Except we're not recruiting students from Europe 🤷🏼‍♀️
I'm involved in international recruitment at a university and Europe isn't a market we target.

For the record i don’t think vat should be added to university fees but there seems to be a misconception on this thread that universities are ‘state’ education. No, they are not state education - like private schools they are private entities (with charity status) I get the concept is very different but at the basic level they are also, technically private education.

And the reason so many universities are in trouble is way more complex than simply dropping numbers (although the downturn in overseas students is one factor - of many)

I’m afraid that’s a matter of opinion, not fact.

Adding VAT to private is a very dangerous move.

University education’s not a “necessity” for an individual as millions don’t have it.

I won’t be one of the people paying private VAT but I am strongly opposed to it.

Tuition fees should rise to be much closer to the actual cost of providing a degree. Yes this will mean less students and universities merging - I am very comfortable with this. We shouldn’t be subsidising 3 year jollies where there is no economic return or wider societal benefit (e.g teachers/doctors etc).

Charging VAT is all a bit circular though given direct subsidies and subsidies via loan.

The government is looking to raise money and they have identified VaT as a way to do it - expect more debates about the various exemptions out there including healthcare, new build house, financial services or even children’s clothes!

@Simonjt Degree apprenticeships going to 18 year olds is tiny when compared with those going to uni. Uni is more popular by miles and miles. We’ve lost a lot of EU students but had gained them from elsewhere, eg India. We now find they aren’t quite so keen on us. Our unis expanded too much and it’s doubtful many are as good as they were.

Our schools aren’t failing. Unis have pretty low entry standards for many courses. It’s the cost of uni and not getting a good enough job afterwards. That makes it expensive for no advantage in the labour market.

Universities that receive government funding (which is most of them) are part of the public (state) sector, they are not private. Universities are not charities, they are a seperate institution.

Not a surprise when you look at the costs of attending university in many european countries, we live in Sweden and fees are free for citizens, permanent residents and EU residents.