Tuition fee £9K ceiling gone under the budget

[mummymeister]

I was watching Question Time last night and the point was made that under the current budget the £9k tuition fee ceiling is going. Have looked into it and it seems that from 2017 institutions can increase the £9k fee by the rate of inflation year on year. bit of a slippery slope and very worrying for my younger kids. Not sure much has been made of it so wanted to let everyone else know.

If the fees didn't increase with inflation your younger kids would be paying less in real terms. Why would it ever make sense to set a tuition fee and then fix it in stone, never to be changed?

Universities' costs increase at least as fast as inflation (and in fact usually faster, since utilities etc usually go up faster than inflation), so if the fees didn't increase they would have to fire staff, stop offering loss making courses etc etc. In fact universities will lose money even though the fees increase with inflation, because their block grants (which subsidise the fees) are being reduced year on year.

With one DS just finishing, one in the middle of a 4 year course,and a third DC due to start in a few years, I think the whole loans situation is very unfair.
Thank you op for highlighting this - it's all very worrying, and I hadn't realised that loans were about up increase even further

Spinoa we are currently looking at a DC leaving uni with almost £100,000K worth of debt. something has to happen. courses have to be compressed into 2 years. the holidays have to be reduced. you cannot lumber kids with this much debt and more. how long before mortgage companies take into account the size of your student debt? No one is suggesting that higher ed costs are rising. my point is someone needs to get a grip now and reduce courses to a reasonable level to keep debt under control.

Courses cannot be compressed into 2 years and remain academically comparable with courses in other countries. UK graduates would be a joke compared to those from other countries with 3/4 year degrees.

This country makes a choice to have relatively low taxation, loans (graduate tax) for students and no number caps on students. Other European countries fund undergraduate education from far higher taxation (tax rates of 50-60+% are not uncommon for middle income families). They also tend to send slightly fewer students to university than we do.

The United States has far higher tuition fees but parents save for these from birth and students from lower socio-economic backgrounds receive scholarships and loans (the latter which they struggle to repay).

The UK has instead adopted neither of these strategies, but instead introduced what is effectively a graduate tax. This is what it is, as many graduates will pay a higher rate of tax until their loans are wiped out at 50 or so. You might disagree with this choice, but UK voters have consistently voted for lower tax and fewer services, than voters in other European countries do. A graduate tax is in the medium term fairer than those who didn't go to university subsidising those who do, through taxation. A big question is whether enough of the loans will actually be repaid for the system to be self-sustaining, but the UK system is arguably financially healthier than the US or European model.

courses have to be compressed into 2 years

Which would make UK degrees a joke, as no research-active department could offer them. The Bologna process would probably refuse to recognise them, and even if they did, employers would instantly realise this was the US system of "two year schools" and "four year schools" and ignore them anyway.

Spinoa we are currently looking at a DC leaving uni with almost £100,000K worth of debt.

Presumably from doing a five year course, such as medicine, or living in London in naice accommodation and doing an MEng or other integrated masters. How do you propose squeezing those into two years? And if it's a three year degree, how on earth do you spend £30k per year doing a first degree?

Also, under the current arrangements it actually doesn't make that much difference whether a student has £30k of debt or £60k: they will pay the same fraction of their income over £21k. The overall amount of debt will only come into play in determining how long it takes students to pay off their loans (for many they will anyhow be paying them for 30 years) or if the government has to change the terms of repayment, so that the amount paid does depend on the overall debt rather being a set fraction of their income.

I suspect that at some point the government will have to deal with the "obvious" group who aren't paying back their loans: stay at home parents. Currently a stay at home/part time working parent who earns less than £21k won't pay back their loan, even if their partner has a very high salary. One could argue that it would be more reasonable if the loan repayments were based on household income, rather than individual income.

Also, under the current arrangements it actually doesn't make that much difference whether a student has £30k of debt or £60k: they will pay the same fraction of their income over £21k.

You can make that point until you're blue in the face: people aren't listening. Tragically, there are people telling their children that as of Gideon's changes last week they can no longer afford to go to university. It's crazy, but it's happening.

I suspect that at some point the government will have to deal with the "obvious" group who aren't paying back their loans: stay at home parents.

Making people retrospectively liable for their partners' debts would be quite a Rubicon to cross. I suppose the hack that might get used would be to deem some proportion of the income in of a working parents be their partner's, as part of the stuff about passing tax allowances overs. Not nice, though.

In other European countries it is routine for families to file their taxes jointly. They can file separately, but then they can't get access to the equivalent of child tax credits, family tax allowances etc. Other European countries don't have student loans but if they did it would be fairly straightforward for repayments to be based on the household income. I don't anticipate the UK introducing such a system of joint filing by families, but if it did child benefit would also be fairer.

I don't think the current system of student loan repayment is fair. I have female friends who aren't working, so aren't paying back their loans and probably won't ever pay back their loans, while their husbands earn hundreds of thousands per year. Meanwhile I know single mothers who have no choice but to work, take home far less money yet are paying back their loans.

Tragically, there are people telling their children that as of Gideon's changes last week they can no longer afford to go to university.

But sadly these are the same families who often don't see the point of university at all.

Personally I have no problem with increased taxation and reduced tuition fees (although I would wonder whether this would be sustainable as the number of students is inexorably increased) but low taxation is just not compatible with a return to no fees and student grants.

Student debt is rising every where students pay tuition fees in the U.S. Average student debt for the class of 2015 is 20% higher than the class of 2014. The message there is every dollar saved towards tuition fees is a dollar less you have to borrow.
I think if we like low taxation we have to look to support our own children to attend Uni. I would like my DD to attend Uni I was aware that she would have to pay and so I started saving when she was born 11 years ago.

Which would make UK degrees a joke, as no research-active department could offer them. The Bologna process would probably refuse to recognise them, and even if they did, employers would instantly realise this was the US system of "two year schools" and "four year schools" and ignore them anyway.

They already exist. Ten universities run them, they have the same number of weeks teaching as a 3 year degree, but do not have a summer holiday.

So instead of 2 semesters in a year you do three (maybe they should change the name) but basically 60 credits studies over each summer and you graduate in the September after your second year.

And it is not just 'new' universities, it is possible to gain enough credits to get a degree from Oxford in 2 years, but you have to live there for an extra year to graduate as you have to spend a certain number of nights in Oxford.

Very few UK degrees are two years, and those which are not respected in the same way full length degrees are. Why would an employer choose a 20 year old who had completed a two year degree (cramming) over a 22 year old who had studied for 3-4 years and done relevant work experience over the summer vacations? The latter would in general come in with significantly more experience and maturity.

BTW in practice it would be impossible for timetabling reasons to simultaneously attend 1st and 2nd year, and 2nd and 3rd year courses in Oxford, which would be needed to pass finals after two years.

100k debt, OP? I feel naive, I hadn't thought that much debt would be accrued for education.