Some universities will go bust

[GinForBreakfast]

Reported in the Times today. It must be so worrying for students joining or returning in September/October.

My question is around the regulator, who knows where the issues are. What should they be telling students and when? It seems cruel, especially to young people, to withhold information. It has financial implications as well - people moving, paying deposits etc.

I seem to remember the whole argument about raising fees to £9k about a decade ago was that Unis would charge different fees based on the type of course (higher charges for more expensive courses such as engineering and science), and according to status/standing of Uni, i.e. higher charges for Oxford compared with "BogStandardTown ex Poly". That differential never happened, they all just charged the full amount regardless.

It was never going to work like that.
Charging differential fees didn't see students looking for value for money or perceiving particular degrees/courses as 'premium' products if they charged more. Students just didn't behave that way.
I worked at a university who decided to charge lower fees and it made zero difference to recruitment. It just meant our fee income was lower.
We lasted 2 years before we raised our fees to £9k

Except there are premium courses and premium earnings after some of them. It does not seem fair to charge all degrees at the same level.

What do you think costs less to deliver in a so called non premium degree? Do you think electricity is cheaper, or that the lecturers should be paid less per hour? So consumerist!

Student consumer behaviour disagrees with you.
When it comes to tuition fees the UK doesn't appear to be price sensitive market.

What are the premium courses with premium fees? Masters degrees already cost more for econ and the like.

A history undergraduate may go on to do a law conversion and work for a magic circle firm, or they might teach history at a comp on the coast. Is it a premium course?

Engineering definitely costs more to deliver, but it seems very self defeating as a country to dissuade students from going into STEM. Careers in engineering don’t have fat salaries like finance, etc.

I don’t understand how it would work.

Careers in engineering don’t have fat salaries like finance, etc.

Which is why a significant proportion of engineering graduates progress to careers in finance. Big banks love them.

Careers in engineering don’t have fat salaries like finance, etc.

Neither do careers in education, (most) health professions, social work, counselling etc. Not to mention geographical differences in salaries.

Which is why equating degree success to earnings is too crude a measure to be meaningful. It shouldn't be ignored completely but it doesn't paint a full picture.

You keep on opining with little or no knowledge or evidence ...

But that’s not the case for everyone isn’t it?

And many PhD students are reliants on ‘being a tutor’ for undergraduates to be able to afford said PhD….

That’s because more or less everyone charges the same - the max allowed by the government.

This is NOT a free market. So why would you expect those rules to apply??

That’s because more or less everyone charges the same - the max allowed by the government.

This is NOT a free market. So why would you expect those rules to apply??

Perhaps read all the posts instead of just taking this one out of context.

We were discussing differential fees. When higher fees were introduced some universities did charge less. I worked at more than one during that time who opted to charge lower fees. They looked at consumer behaviour in relation to other large 'purchases' and applied the same principles.

Turns out 18 years olds don't view going to university in the same way people view buying a car.
Differential fees did not have an impact of student behaviour and choices. In fact, students fed back that differential fees were confusing.
All that happened was that those charging lower fees lost money. With a few years everyone was charging 9k

This shows a fundamental ignorance on how student loans work. You repay your loan (repay your tuition fee) at a higher level if you earn more. So premium earners are "charged more".

The link between the course you do and the amount you earn is not so strong that you could charge more upfront.

“Premium earners” can potentially pay back their loans more quickly so pay less than middle earners because they accrue less interest.

Except, having had a son who just completed an engineering course in a technology area, the poor value for money they had was shocking. Few lectures, lecturers not turning up, recycled online courses from US universities (and as a tech course in a very new area of technology, out of date), no proper access to practical facilities until year 4 of a degree, powerful computers shared between course members because there were so many etc etc
Yet the uni in question has amazing new sports facilities, multi-million pound luxurious new accommodation which is nicer than the hotel room I have stayed in, a fleet of nice cars for the staff to use (or stay sat in the car park all day as they were barely used) - yet the teaching and resourcing was poor.
Over 60% of the course dropped from a masters to an undergrad course - and so the Uni just lost £000's through that.
Do I think the uni in question has done a good job? No. Have they ensured engagement to keep the income flowing? No. Have they spent money carefully and in areas which really matter? No.
Am I bothered if they go bust? Not really - they have proven in 4 years that they are pretty incompetent.

@outdooryone

Yet the uni in question has amazing new sports facilities, multi-million pound luxurious new accommodation which is nicer than the hotel room I have stayed in, a fleet of nice cars for the staff to use (or stay sat in the car park all day as they were barely used) - yet the teaching and resourcing was poor.

Yes, my son's experience too. Brand new ultra modern sports centre resulting in the previous one that was only ten years old being demolished! But some of his lecturers not even in the country, let alone in lecture theatres, so doing all the "lectures" for the entire module online and getting random PHD students to do the seminars and tutorials, who sometimes either never turned up or turned up and had no instructions as to what work to do. When that happens in one module, fair enough, maybe special circumstances, but when it's several modules over the 3 years, there's something amiss!

Yet, at the same time, the Chancellor and Vice Chancellor turning up in chauffer driven limousines! Fair enough for special events like graduation ceremonies, but it was also for routine attendances on campus for "normal" meetings etc. Obviously they're "too special" to drive themselves in normal cars. Not to mention that one of them actually lived in campus owned accommodation at the outskirts of the Uni campus, so could probably have walked or cycled! (There was also a lot of controversy because he "improved" the campus owned house to the tune of about half a million pounds - obviously taking the lead of a previous prime minister who like hugely expensive wallpaper!). And yes, they had a "staff car pool" too with a number of expensive cars that were usually sat in the pool car park most of the time - heaven knows why they needed so many or why they had to be top of the range expensive cars rather than perfectly capable "average" cars!

Which universities were these? I have DC interested in STEM, and I would like to avoid!

No, premium earners are not charged more.
They are repaying more each month which means they repay their debts quicker (and actually end up paying LESS than those on lower incomes because they pay so much less interest).
The ones who are literally fleeced are the ones on a medium wage.

@DullFanFiction it's slightly more complicated than that. Up to recently about 51% of student loans weren't repaid in full, meaning that the (higher paid) tax payers paid for those loans.

The new plans are predicted to potentially cost middle earners more than higher earners, with low earners never repaying in full.

Yes we agree there.
And yes I was referring to the new system as this is the one that students will have to live with now.
Im acutely aware my own dcs will fall into the ‘middle of the road’ group (one because if his job, the other because he is set to work in the civil service)

Our VC is supportive of graduated fees. I think the idea is that some courses will then become 'premium', such as medicine etc. and higher ranked universities should be able to charge more. But of course that essentially means only rich people can do those degrees and study at those universities.

Turns out 18 years olds don't view going to university in the same way people view buying a car.
Differential fees did not have an impact of student behaviour and choices. In fact, students fed back that differential fees were confusing.
All that happened was that those charging lower fees lost money. With a few years everyone was charging 9k

And furthermore, students suspected that the courses charging lower fees were not as good as the full fee courses (and in some cases, particularly in post-92 universities in the arts & humanities, this is the case). So again, the preference was for the full-fee courses.

If there weren't a highly subsidised (by taxpayers) scheme for tuition fee loans, it might be different, but I think in terns of a university education, students & their parents are very attuned to sourcing quality, rather than cheapness.

No, overall premium earners are charged less since they pay off nine percent of a higher salary so pay down the capital more quickly and thus pay far far less interest.

the line about “most never pay off their student loan” was only true because of the massive levels of interest that some can never hope to pay back

@user8464987632 it really is a more complicated picture than that. Under previous loan arrangements many, many students had their loans written off before repayment in full. The most recent arrangements are attempting to change this but how it works out is still to be determined.

People who were self employed, or form their own company, have lower rates of full repayment because they can adjust their income to reduce their student loan repayment liability. People who move abroad and default are rarely chased by the student loans company .

As with any loan if you pay it off more quickly then you will pay less interest, but if you are earning more then you are also paying more tax, some of which goes to universities.

Finally, the amount you owe is of course related to the amount you borrow, not just your fees but your maintenance loan. If you were from a wealthy background and were subbed more by your family, so borrowed less, then you would obviously pay back less. Or if you couldn't afford to live away from home for uni you might have also borrowed less.

So as I said, it's more complicated than saying "lower earners pay more".

So premium earners are not charged more. The vast majority of premium earners are charged less one way or another.

Did you actually read and understand my post or are you content with a simplistic explanation that fits your narrative?