So uni fees are going to increase?

[nearlylovemyusername]

University sector calls on Labour to raise tuition fees to ‘stabilise the ship’ (ft.com)

Given paywall, the essence it this:

"One former university vice-chancellor said the fact that Labour had acknowledged the sector was “in crisis” indicated that Labour leader Sir Keir Starmer and Phillipson, who have not ruled out a tuition fee increase, were likely to act.

“The short-term pain of putting up fees could be blamed on the Tory inheritance . . . and then traded against a transition to a better deal for young people, which Labour can deliver before next general election,” he said."

So it won't be limited by VAT on PS, uni fees will be up, potentially significantly and repayments for higher earning grads will go up much more - this is what artical says.

@TizerorFizz I understand the way it is currently being measured. My question was more analytical or conceptual i.e. will we only come to teach Sociology or history or media studies in London because kids have access to well paid jobs thereafter. Is a good degree only one that gets you a job in London? Thats not because degrees are better but because our economy is geographically skewed. The conversation about worthwhile or not worthwhile degrees is often rather simplistic even when it comes to financial outcomes.

Our national economy is very skewed but so are living costs. Is a history grad's degree that landed them a teaching job in London more worth while than if they got the same teaching job in Manchester. What about the fact that this same person would be able to afford to live in Manchester but not in London. So what do we think was better when it comes to individual or societal outcomes?

@HowardTJMoon I think there’s always room for academic study and archaeologists and anthropologists. However, you mention Oxford. Great if you can get there and follow your dream. I know of others who never get near getting a job in that field. They have to try for other work and probably aren’t happy! I agree it’s not a job going to make a fortune but it IS graduate work. Lots of grads do not do graduate work. Plenty we know! So they don’t get any reward and the country is even more in debt.

Computer Science has expanded beyond belief and it’s not always great for jobs. Like most degrees, it depends on the degree holder! I do not think all degrees should be vocational either. However quality of degree matters and so does the individual getting it.

I don’t see why we rail against people who earn a lot. Your family member won’t pay much tax, nor much Grad tax, I assume. So she’s happy and her degree has facilitated this. Financially it could be a big win for her, but what would we do if everyone earned at this level? Clearly a huge tax hole. We actually need the high earners. They pay the higher rate taxes (and way more vat) that we need to pay the teachers, social workers and nurses. We do need to understand that high earners are vital to society, and that’s why degree and earnings matter.

Finance England has a £250 billion black hole. Yes, the grad tax is being extended to 40 years so it’s even more vital students get money from their jobs because this means lower earning grads pay for longer. Also, the uk is still subsidising unis. It’s not paid for by students. So yes, society needs a return on their investment too.

@Ifyubrgku Obviously dc decide where they want to work. The IFS studies aren’t remotely simplistic. Many students obviously have no intention of coming to London and stay in their uni city. Bristol, Sheffield, Manchester, Newcastle all have happy ex students still there. No doubt nearly everywhere else too. I’m more concerned about the expense to society of a hugely expanded uni sector where dc don’t get a grad level job anywhere!

Not just expense to society either. Expense to parents too!

But they’ll pay back many, many times more than the 60k they owe under the current student loan repayment system.

But they’ll pay back many, many times more than the 60k they owe under the current student loan repayment system.

My point was that we shouldn't simply equate the value of a degree with the likelihood of repaying the loan.

Your point though - the new plan 5 loans have interest pegged at inflation so won't increase in real terms.

In Wales student loans interest percentage is 7.8% which is a lot compared to a straight bank loan at 4.8%. I guess it covers the students who will never have to pay back. Unless they move the goal posts of course.

Who do you perceive “they” to be @justasking111

They being the private company that were handed student loans by the government to administrate. There's a huge headquarters down the road from us which employs a lot of people including friends and offspring who handle the student loan repayments.

Student loans company isn't a private company at all - it's Government owned - mostly Dept for Education.

As I said before, plan 5 loans have interest set at inflation so no real increase in amount owed accrues.

How many 17 year olds are going to be able to get 4.8% bank loans?!

They being the private company that were handed student loans by the government to administrate. There's a huge headquarters down the road from us which employs a lot of people including friends and offspring who handle the student loan repayments.

Why would you think they are a private company. What, unless genuine ignorance, would motivate you to write that? @justasking111

As @Titchy said they are not.

https://www.gov.uk/government/organisations/student-loans-company/about

We are a non-profit making government-owned organisation that administers loans and grants to students in colleges and universities in the UK. Our mission is to enable people to invest in their futures through further and higher education by providing trusted, transparent, flexible and accessible student finance services.

Our vision is to ensure that SLC is widely recognised as enabling student opportunity and delivering an outstanding customer experience in the efficient delivery of the four UK Governments’ further and higher education finance policies.

The only people who "move the goalposts" are governments - the Welsh government in this case aS education is devolved. By "move goalpost" you presumably mean "review and reset higher education policy".

Further from the website

We play a central role in supporting the higher education (HE) and further education (FE) sectors. We do this by making timely and accurate payments of Maintenance Loans to learners and Tuition Fee Loans to HE and FE providers.
We work with the Department for Education (DfE, England), and the devolved administrations in Scotland, Northern Ireland and Wales. We also work with the Student Awards Agency for Scotland (SAAS), the Education Authority for Northern Ireland (EANI), HE and FE providers and other delivery partners.

We provide financial services (in the form of loans and grants) to over 2 million new and returning students annually, in colleges and universities across England, Northern Ireland, Scotland and Wales. We have 9.4 million customers and manage a loan book worth £227.5bn.

We:

• manage the full end-to-end ‘apply, assess, pay and repay’ process for undergraduates in England and Wales and provide the payment and repayment parts of this service for Scotland and Northern Ireland; we also maintain the assessment systems and online portals used for applications and assessments in Northern Ireland

Who we are

We employ over 3,300 staff across four sites in Glasgow (Clyde Place and Hillington), Darlington and Llandudno Junction

Student Finance Wales
Welsh Government Office
Sarn Mynach
Llandudno Junction
Conwy
LL31 9RZ

and to round things off

Who we work with

Partners & Stakeholders

The Welsh Government is responsible for student support policy for students from Wales. Student Finance Wales is a service provided by SLC, providing higher and further education student finance on behalf of the Welsh Government

Student finance sites

• Student Finance Wales provides online services and information for those in Wales interested in the financial support available to students in HE.

Funding Councils

• Higher Education Funding Council for Wales (HEFCW) funds HE in Wales, using funding made available by the Welsh Government to support education, research and related activities at twelve HE institutions. HEFCW also funds the teaching activities of the Open University in Wales and HE courses at FE colleges.

University income and expenditure is fairly key to this thread.

HESA - the Higher Education Statistics Agency - recently published sector data for 2022/23

Total income for the UK higher education sector in 2022/23 was £51.6 billion, excluding eight HE providers who did not finalise their financial data by the publication deadline

• Tuition fee income of £27.0 billion accounted for 52% of total income for the 292 HE providers included in the data.

• Income from non-UK domicile students’ HE course fees came to £11.8 billion – 23% of the total income.

• 12% of HE providers’ income was from funding body grants and 14% from research grants and contracts.

• Total expenditure for the sector was £48.6 billion, with staff costs accounting for 51% of expenditure.

• Expenditure through academic departments was £17.8 billion, of which 62% represented academic staff costs and 15% other staff costs.

Other information in today’s release includes balance sheet data showing total reserves of £65.1 billion and capital expenditure data showing £4.6 billion total spend for the year.

Further tables show providers’ sources of income, categories of expenditure, cash flow, and senior staff pay.

https://www.hesa.ac.uk/news/16-05-2024/he-provider-data-finance-202223

This.

To those quering repayment interest - last year inflation ran at over 10%. So 7.8% actually does reflect inflation. Not the Bank of England interest rates or the subsequent rates that bank give us on loans. These figures are different from each other. But it is important to understand the difference

Pegging the interest rate to inflation is not what makes the loans expensive. The repayment rate is set too low to make a serious dent in the loan, so you’re signing up to a graduate tax, when you’ve been sold a loan.

@shockeditellyou It’s shocking that so many don’t understand how student and university finance works. If only we had 100% repayment of loans! It’s a pipe dream though.

It seems a simple concept to understand repayment is linked to earnings. The big issue is now that the period of time the “tax” will be levied it means the lower paid pay for longer. However, as so many want the world and his wife to go to uni, we do have to think how we pay for it. High earning grads is one way. Taxing the less well off is another way: through general taxation. We tried this for decades, when 3-15% went to uni. Now it’s as @boys3 says, circa 40%. So we need another think, or the uni sector contracts.

What they need to do is give students more of an interest to repay their loans earlier. A structure where first 20 years post uni it’s only repayment of capital. After that interest accruing kicks in. Something to incentivise them to get earning as soon as possible and as much as possible and also allow a good way for early repayment.

That quote made me feel old - I can remember watching it when originally aired. Tongue in cheek script but the financial firepower of Oxbridge still sets those two unis apart.

Taking University income - and remembering in terms of overall student numbers neither Oxford or Cambridge are particularly large, and certainly nowhere near the numbers of a UCL, Manchester, Nottingham and the like.

Oxbridge together for the latest year just published by HESA had an income of £5.4 billion; close to 12% of the university sector (based on the 130ish unis that appear in the league tables). The next four add slightly more than that but include UCL, Manchester and Edinburgh all with far bigger student numbers. The Oxbridge income exceeds the combined total of the 45 unis at the other end of the total income scale.

Oxbridge tuition fee income - nothing too exciting, though perhaps not surprisingly disproportionately larger relative to the size of its overall student body. The main difference is that whilst tuition fee income for the sector is just over 50% of total income, for Oxbridge it is 15-17%.

Funding body grants - about £435m, just over 7.5% of the sector total.

Research Grants & Income - £1.36 bn; almost 20% of the sector total. and higher than the combined total of the 70 at the other end of the scale

Other Income - £2.2 bn ; 28% of the sector total

Investment Income - £230m just under 28% of the sector total

Endowments and donations - £319m - 44% of the sector total

Not that any of those figures are of any great help for the rest of the sector.

@boys3 Oxbridge “Investment Income - £230m just under 28% of the sector total

Endowments and donations - £319m - 44% of the sector total”

That is how the top US unis do it with their bursary programmes for poorer students. They keep increasing their endowments. Our unis should do more in that regard too, across the board. I don’t think it should just be the tax payer. We already have a tax structure to incentivise people to leave money in their will to their university - but I think only Oxbridge taps that efficiently (and could do more). I think they should all be working harder to fund raise as well.

@Araminta1003 How does a Post 92 uni do that??? It’s not as if they have 800 years of endowments and investment to fall back on!!! These unis simply don’t produce the great and the good over a 30 year existence. It’s completely impossible to do this in any meaningful way. Oxford unis have been (not sure about now) huge landowners. They have massive investments . Where’s the money coming from to do the same with the newer unis? The odd better off person - can we name who should give £billions to Bucks New please? Or Mid Beds? I think they would love to know.

Capital and interest make no difference to a tax system based on earnings. Not sure about rules paying off capital only these days, but DD has paid off her loan but she finished uni 10 years ago and paid it off before she was 30.

Friends husband was a research scientist at Cambridge, his wife a supermarket worker. He was poorly paid a friend who'd emigrated to the USA same job but better paid offered him a position.

They thought why not, the children were young, a house came with the job. The change in their lives was astonishing. House in an acre of garden, pool, four bedrooms, bathrooms. Amazing outdoor lifestyle. Low crime. And a salary ten times higher.

On top of that the research labs and equipment were top notch the availability of funds much greater.

Cambridge really isn't the centre of excellence it purports to be, just a lot of clever people making the most of not such great facilities on very limited funds run by a creaking institution.

So this is a research scientist at a uni in the USA or working for a commercial outfit? 10 times more seems a stretch.

@1dayatatime what concerns me is Blair did a number of things that broke down and opened gate ways eg student loans but caped at a reasonable 3.5% so no big deal but he opened that gate.
Then legal aid again what he did was reasonable but it was him who opened the gate same with NHS privatisation and and so on.