Review of higher education

[alreadytaken]

So - since we know the Conservatives look to mumsnet for ideas what would you change?

I'd drop the ridiculous 6.1% interest rate and go back to rate of inflation while at university. At a stroke reduces the amount of debt students have when they leave and yet costs the Treasury very little as most people wont ever pay their theoretical debt back anyway. Doesnt benefit the rich much so not a traditional Tory policy but silences a lot of the fuss for no cost.

But the people to whom the interest rate matters on the student loan are the high earners......to the rest of them it doesn't matter if its 6% or 30%?

INterest rate is bogus. Repayments don’t start till you earn £25k and capped at 9%. So however large the capital plus interest becomes the repayments stay the same (proportionately speaking).

The biggest thing that needs to change is the living costs. With many Uni accommodation far in excess of the maximum loan it is this in my view that prevents kids from poor families going to Uni as parents can’t provide top ups. Accommodation costs need to be capped or the maintenance loan match actual expense

But the interest rate does matter. It adds thousands to the debt before you even leave university and it also makes it very much more difficult to ever pay off the debt. So you go on paying 9% of salary for the full 30 years.

You pay 9% of salary over the threshold, which is increasing. So based on a £25k threshold if you earn £35k you pay 9% of £10k which is £900 per annum. The interest rate could be 546% and your repayments would not change. Therefore it is bogus to argue that the interest rate alone is a barrier to taking up the loan in the first place IF (big IF) people actually understand how the system works. Which on the whole I fear they do not.

No-one is under any illusion that any more than a handful of loans will be repaid in full given average salary rates and the active threshold. Which is why in my view it should be seen and marketed as a graduate tax not a loan system

Home well said.
If people actually understand how the system works. Which on the whole I fear they do not.
This is what worries me. So many people look at the interest rate and think it makes a difference. The vast majority of graduates will not have a starting salary of £40k and will not be super high earners.
The government will play on the psychological impact of lowering interest rates which will help only those who are already better off.

The average student will leave uni with an outstanding loan of £50k+

To quote Martin Lewis.
What you repay each year solely depends on what you earn.

What you borrow and the interest doesn’t change this. Whether you owe £5,000, £50,000 or £500,000, if you earn £30,000 you still repay £810 a year (£450 a year from April).
The only impact borrowing more (or higher interest) has is whether or not you will clear ALL the loan and interest within the 30 years before it wipes. Currently it’s predicted only 17%, the highest earning graduates, will clear it all. Everyone else will simply repay 9% of everything above the threshold for 30 years regardless.

My DC who are both headed for middle range salaries will never pay off their loans even if they were interest free.

There should be no interest rate attached to the loan, and people should feel there is some possibility of paying it off, rather than being chasing an ever receding horizon.
The other problem is that students with high wages will be paying for the students who don't, as well as paying tax in the normal way. Surely that create further divisions in years to come? If even poorer students felt there was even a possibility of paying off the loan (which with interest rates adding to it annually there isn't) there would be more incentive to get good jobs, or do overtime?

I think less money should be spent on shiny new buildings and expensive accommodation in unis as well, and more on the lecturers. I've now been on several open days/applicant days and I am wondering how there is so much money swilling around in these projects, and yet we are told there isn't enough money to subsidise higher education? Higher education should be about education, and facilities to further education, not just a fancy state of the art display. who is benefiting from the massive expansion of the campuses? Business, the unis themselves, the nation? what is the end goal? training or something else?

The Uni benefits from increased accommodation standards as they rent them out in vacations for conferences etc. Great sports facilities attract students who are into sport. Ditto actors/singers (and where do students of lighting engineering or stage management learn their stuff if not in a state of the art theatre?

And you say it is only 9 percent of their salary. But you have to add that to the other taxes people pay. Or the fixed costs that come out of their salary like a mortgage and council tax. And VAT that we pay for all our services, our fuel. There is going to be very little disposable income, and that will affect the economy surely? Just so a "Uni" which used to be an excellent poly can expand, be all shiny and state of the art and offer degrees which are interesting and life enhancing but don't ultimately increase your earning power any more than a year spent working would?

There should be no interest rate attached to the loan, and people should feel there is some possibility of paying it off, rather than being chasing an ever receding horizon.
Even on zero interest rate a teacher or nurse will never pay off the loan.
A genuine graduate tax might be different. If we returned to grants for fees and living expenses but then all graduates paid a % more in tax. The highest earners would still pay more. The poorest would not be put off going to uni because they couldn't afford the living costs and were afraid of the debt.

But you could probably learn all that in a lowly job in the actual theatre, and waste less money than you do as a student, even on a pittance wage.
Conferences on important matters maybe but perhaps a lot of conferences are just hot air, and we are all going round in circles? Universities make money for universities to attract business and they become businesses, is that what the end goal is? It is like when hospitals become businesses. If you set up unis just to sell conferencing facilities or hostel accommodation for the holidays, you inevitably undermine the point of them in the first place, the students you are trying to educate or the research you intend to enrich.

Teachers and nurses should get their fees paid in that case!!!!! Which was always the case in the past... If you are going to use them as an example, then they should be an example of training which should be subsidised as of old. Because they will be working in placements throughout their training benefiting others, and should therefore be treated like apprentices and SUBSIDISED. If you are using the argument that it is not fair. But at least there would be incentive for them to train in the first place.

I’m not sure great facilities and student learning / academic research are necessarily mutually exclusive. And yes it is a business with paying customers

The government have admitted they did not intend the system to work as it has, as they had no idea so many unis would charge the maximum fee, and that so many people would never pay off the loan in their lifetime. If they can admit that they didn't know what they were doing THEN why would their assurances that it still is going to work out alright NOW hold any water? |The economists were not very good with their predictions were they, why should we trust that they know what they are doing now?

The current system is actually working OK now - illustrated by the record numbers of university applications and higher than ever take up rate by those in lower socio economic groups. The ONLY reason the current govt is paying lip service to this issue is because they see Corbyn's promise to abolish fees as a threat.

We can have a conversation about whether some courses are not actually worth the paper they are written on and whether some establishments exist purely to put bums on seats, but that's a different matter. In my view the aim of 50% of school leavers going to Higher Education is a nonsense. The focus could instead be put on better vocational learning and apprenticeships in terms of both status and availability

But universities and schools and hospitals were not businesses, they were charitable foundations set up to help people.
Inevitably if you turn them into businesses you start to sell a product, and that product is a degree. You start to undermine the basis on which education is experienced especially if it is a massmarket product: I am not talking about niche training - someone wanting to learn to be a craft baker in 2 weeks paying a certain amount - I am talking in a more general way about how the universities will be tainted by the vast amounts of money they get through expansion and there will be no way back from this investment except to continue to peddle the idea that everyone needs lots and lots of higher education...

it is very difficult for students to opt for low cost accommodation now because universities put up more and more places that are en suite - and the conference trade is not big enough to fill them in holidays because businesses dont hold all their conferences in holidays. For those that do you want more parking, good road access and better service than universities provide. Universities like Oxbridge get conferences for the snob factor but there isnt enough conference trade for them all. If universities arent made to break that down in their balance sheets they should be.

Yes many people dont understand cumulative interest, you dont have to be a very high earner to pay off a loan if interest rates are lower. Dont have access to my spreadsheets right now to demonstrate with figures but a lot will pay considerably more than they borrow. The government has managed to increase tax rates by 9% and no-one even registers it!

On a different note - the government doesnt understand that for students universities appeal more than apprenticeships because you get to leave home and go to a place where there are lots of young people looking for a good time. Their parents fear the debt, the young dont appreciate what it will mean when they want to get a house or raise a family. Maybe the people who would like National Service brought back had a point.

I agree about accommodation.

Also I would look at how parental contribution works. We are not a very high income household. Not bad but definitely in the Just About Managing group. DD's maintenance loan will not cover her rent even in the cheapest student halls. We will have to make up the shortfall plus give her money to live on.

We will expect her to get a job in holidays but the course she is aiming for is fairly intensive during term time and I dont want her to end up mentally struggling trying to make ends meet.

Sensibly she is looking at cost as well as course but not all courses or institutions are equal. I dont want her to end up on a course/at an institution simply because it is cheaper.

I have seen past student loans sold off to private investors/debt collectors and it looks like when that happens the terms can be changed - I would like to see that banned. There needs to be certainty about what is being agreed. (If I have misunderstood what happened in the past or if that is already banned I'd be happy to be corrected).

I'd also like the salary at which it is paid bad to be linked to inflation so it automatically goes up over time.