Who pays this bill?
OFFA must make higher fee paying institutions, most institutions, fund the widened access policy. Vince Cable has suggested that of a £9,000 fee loan, £1,000 of this should be used for wider access.
This means that when a student carries and pays this debt for their adult working life some part of it has in fact have been used to fund the support, including possibly fee waivers, for a student from a family which was worse off in the year of university application. But at the moment of payback it is possible the funded student is the wealthier individual, yet paying back much less. This is not payment for education by ability to pay.
In search of how this will apply I have discovered numerous intentions.
LSE for instance states:
This also represents a generous package of support for lower income students, with 50 per cent of additional fee income being redirected to access initiatives, bursaries and on course support'.
This 'fee income' is from loans taken out by other young people. The funded student may only be slightly less well off but falls on the right side of the decision line.
The needs of the less well off are usually funded by general taxation; the sick and unemployed are not funded by others 'in the same boat'.
This, after all, the government claims is a loan, not a tax, and therefore is not being collected as a universal charge for the good of the whole, but is a charge levied against an individual to pay for their tuition. What right does the government have to redistribute this money as though it was a tax? I think somewhere in its confusion the government has got its loan and loan repayments mixed up with tax revenue.
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Government is lending money to students so students can give it to other students, why not miss out the middleman and give it themselves?
Surely the funding of less well off students must be an obligation of taxpayers as a whole, and therefore fall to central government funding.
I stated the help for poorest students had no bearing on the debt and situation of the majority, in Section 2 page 3, and therefore from the start could not understand why it was used so strongly to defend higher fees. I was mistaken. The help for the poorest students increases the debt of the majority, which makes its use to justify bigger loans even more bizarre.
Why any fee waivers if the system is fair?
If the loan payback is based entirely on ability to pay, and is as fair as claimed and offers no deterrent to application why the need for fee waivers? Surely a graduate tax, as proposed by Labour, to be levied on all graduates based on ability to pay at the time of payment, is much fairer.
It would offer no opt out for wealthiest through upfront payment and no opt out by use of shifting 'normal resident' status between England, Scotland and Wales.
If the government is following this policy in a move to 'redistribute' the income of wealthier parents then it should be focused on these parents(income tax?) not their children. This is already done through the sliding scale of maintenance grants and loans for 2012 entrants, these are shown below:
Household income | Package of Support | |||
Non repayable Living grants | Living loans | Total | ||
£25,000 or less | £3,250 | £3,875 | £7,125 | |
£30,000 | £2,341 | £4,330 | £6,671 | |
£35,000 | £1,432 | £4,784 | £6,216 | |
£40,000 | £523 | £5,239 | £5,762 | |
£45,000 | £0 | £5,288 | £5,288 | |
£50,000 | £0 | £4,788 | £4,788 | |
£55,000 | £0 | £4,288 | £4,288 | |
£60,000 | £0 | £3,788 | £3,788 | |
Over £62,500 | £0 | £3,575 | £3,575 | |
For students living away from home and studying outside of London 25 | ||||
Most parents try to make up as much of the difference as they can. If the government thinks this is not sufficient contribution by well off parents it is the existing parental income they should be looking to for greater contribution, not some hypothetical future income of the student.
A longer-term result
I have heard parents discussing taking an 'earnings' holiday whilst their children are at university, there are families who will have more than one child at university at one time, who are advance planning this now. Will the £150 million fund set aside cover this or could this create a rising bill for a future government.
Latest Idea
It has been suggested that in competition for the best students, and the funding that accompanies them, students with AAB 'A' levels, or better, may be offered reduced fees. Commentators have pointed out that many of these students will come from independent schools, thus many will be from wealthier families. What I have not heard talked about is exactly where the money to cover reduced fees will come from. Will it be from fellow less well off students who could not afford the advantage of private schooling?
