Paying for a degree

The topic of student loans and student debt is back on the agenda. There is wide dissatisfaction with the current system. Students worry that they are asked to pay too much and borrow too much. Universities worry that some course fees do not cover the costs of providing a good education. The public debate worries about access to higher education for students from lower income backgrounds, and about the value of some courses to a person’s life chances.

I am a fellow of an Oxford College drawing no salary. The College is a research institution financed from Endowment income. It has no students and no fee income so I am not conflicted or pursuing self interest in this matter.

The case for the student loan system initiated by Labour and extended by the Conservative/Lib Dem Coalition government was straightforward. Going to loans allowed universities to expand and more students to attend. A grant based system implied rationing as there were limits to the amount of state cash allocated to this service. Universities themselves would decide how many places to offer and set entry requirements. The system as a whole would supply money and a place for anyone wanting to go who met a university’s standards. The taxpayer was let off paying grants. In some cases lower income taxpayers without the benefit of a degree had to pay more tax to give a grant to someone would go on to earn many times their income, which was generally thought unfair.

The problems of the loan scheme were also well understood. Many students would not repay them, leaving taxpayers with the debt after all. Graduates with a large debt might feel constrained about buying a home or building their own business as they had already borrowed a lot. Some people would be put off going to university, not liking the idea of starting adult life with a big debt.

There were attempted fixes for some of these problems. People from lower income backgrounds can apply for access funds or scholarships, so they can borrow less and still pay the bills. In an attempt to cut taxpayer costs from non repayers the interest charge was set high. The successful and honest ex students are asked to pay more to cover some of the costs of those who never earn enough to repay or of those who leave the country to try to walk away from their debt.

Reform is the air, with both Labour and Conservative wanting to move to lower fees or no fees. Replacing the whole system with grants would be very expensive and raises the issue of state rationing again. Cutting the maximum fee will curtail universities and militate against more dearer courses in science which require expensive facilities and more intensive teaching.

Offering more scholarships to lower income students might be a better way forward, with scope for government and universities to negotiate over how many and who pays. Universities do provide access funds, and many are building endowments with independent financial capacity to help students.

The provision of university places is not a proper market. There is a fee cap, which means they all tend to charge the same maximum permitted, whilst there does have to be a system of rejecting some who want the service but are not qualified to benefit. Just as under the state financed system that went before, there is a market for talent where the brighest and best qualified tend to go to the universities that come out highest in league tables, thereby reinforcing their positions.

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134 Comments

  1. Mark B
    Posted February 15, 2019 at 5:26 am | Permalink

    Good morning.

    The topic of student loans and student debt is back on the agenda.

    Only in England. I think you will find that the others in our Union, and indeed the European Union, are quite happy with it.

    I think it is time we looked at what degrees need to be funded by the State. I like many here are quite happy for the sciences and mathematics to be funded but stuff based on the humanities etc can be funded by the students themselves. I would also like the UK government to pass a law preventing the devolved governments from discriminating against other members of our Union.

    • Lifelogic
      Posted February 15, 2019 at 7:31 am | Permalink

      It does not cost much to teach people maths or even theoretical physics in this internet age. Anyone can watch the very best lecturers for almost nothing. If they have the right sort of mind and determination they can virtually teach themselves. They only need occasional assistance or guidance from a tutor and even this could be on line.

      Medicine, Engineering, Vetinary, Chemistry and some other sciences are rather more expensive. Most other subject can be taught for far less than is currently charged.

      • Al
        Posted February 15, 2019 at 9:06 am | Permalink

        While you can watch lecturers for very little, this presents the same problem that can affect OU – the lack of practical experience and group exercises. People do not simply learn from watching the lecturer, but from classes and group exercises, and the input of other students. Also many of the online courses are not disabled accessible, presenting another barrier to entry. (e.g. a blind employee who has found most online training courses use video or video chat, which is useless.)

        Among other fixes, I would suggest that allowing tax breaks to corporations, organisations, and individuals, that provide scholarships in fields they operate in, would allow the market to directly affect what skills are supported may assist.

        • Hope
          Posted February 15, 2019 at 8:53 pm | Permalink

          Will teachers, parents and local authorities be prosecuted for taking children out of school like to protest about issues they do not fully understand like the parents who took their children on holiday?

          Where is Hinds and what is he doing?

      • Hope
        Posted February 15, 2019 at 9:47 am | Permalink

        Students going to university for pathetic degrees when they did not even pass GCSE or A level. That about sums up the discredited courses. Some degrees were learn on the job and not even apprenticeship status: design, photography, nursing and many others. This was about reducing unemployment by the Labour govts while placing the cost on the individual. Despicable. Especially when politicos debate and tell us about skilled workers.

        Put technical colleges back in place, have proper apprenticeships, not the current crop of crap.

        People will wake up to the discrimination the Tory Govt is imposing on English students. The lib dems found out- how come the young did not vote for this remain party as claimed by all remain fanatics?

        Your party MPs conspiring in parliament yesterday on how to overthrow the government because they did not like the result and want to remain in the EU- Letwin, Grieve, Clarke etc while Bercow looked avidly on. Why are they not arrested? Letwin actually said they would have to take the role of the government! In contrast in Spain politicos on trial for rebelion for asking for a referendum! You were there sitting next to Peter Bone.

        Today the govt allowing brainwashing of children to go on protests on climate change! They do not understand the issues, should be in school being taught, teachers should be teaching not protesting in school time. If parents want to take their children on a protest do it at weekends. Your govt is simply unfit to govern in area any more.

        • Lifelogic
          Posted February 15, 2019 at 8:47 pm | Permalink

          It is probably the schools (and the BBC of course) who have filled their young impressionable minds with this new anti-scientific climate alarmist religion.

        • Hope
          Posted February 15, 2019 at 8:52 pm | Permalink

          Tory associations need to stand up and act for our representative democracy and deselect Letwin, Soubry, Steve Hammond, Harrington, Grieve, Clarke and all the extreme remainers who now make it clear that they want to act like dictators and become the government!

          The Gaul of it bearing in mind they let people raise money for them, campaign for them and get them elected to say they did not beleive in what their supporters did for them the principles being in the maifesto,referendum! They even now say the UK should be in the customs union and single market exactly the opposite of the referendum and manifesto and what theynstood on to be elected and most voted for in a series of previous votes! Utter shysters. Hartley- Brewer is correct in the radio today these extremists need to be disposed of.

          • Lifelogic
            Posted February 16, 2019 at 4:40 am | Permalink

            Indeed but two Clarke’s not just one.

    • oldtimer
      Posted February 15, 2019 at 7:58 am | Permalink

      I think there is a case for a limited number of state funded scholarships based exclusively on merit. To encourage universities to compete for them they should only be available to departments/disciplines that meet top research criteria that are already assessed. Such a process would reinforce success and focus on those areas where universities demonstrate world class performance.

    • JoolsB
      Posted February 15, 2019 at 8:50 am | Permalink

      “Only in England. I think you will find that the others in our Union, and indeed the European Union, are quite happy with it”

      Exactly! I met my (Tory) MP at Westminster in December and complained how unfair it was that English kids were being clobbered with £9,250 fees whilst of course Scottish kids pay nothing and the Welsh & NI were heavily subsidised. His reply was “yes, and we’re paying for it” …….we, being the English. What chance have our kids got of a level playing field when our so called representatives think this but do not utter one word of protest at this discrimination against England’s young (and their sick and their elderly)

    • a-tracy
      Posted February 15, 2019 at 9:50 am | Permalink

      Mark, did you go to University? Get a Grant? Study a STEM subject.

      I worry sometimes about this my degree is superior to yours, we should all only allow STEM degrees, people in design, art, often earn many more £’s for the whole Countries economy, employ lots of people, creatives solve problems in other ways than a logical person would, you should value all skills, this is how we end up in this blimin mess because people underestimate people that aren’t like them.

      • Mark B
        Posted February 15, 2019 at 6:43 pm | Permalink

        No ! I went to work, got an apprenticeship, worked 4 days at work one day at college, obtained my engineering qualifications and was then made redundant thanks to the ERM fiasco. All whilst I was being paid a pittance.

        Happy days !

      • NickC
        Posted February 15, 2019 at 7:19 pm | Permalink

        A-tracy, I agree, STEM subjects should not be artificially favoured by the government. It is the government picking winners again. And “creatives” do in fact contribute greatly to the country. If STEM graduates are needed their pay will increase and that will attract more STEM students and fewer arts students.

        I would halt interest charges during the course and for 3 years after; then restrict the interest rate for a further 10 years. That would encourage early repayment. Previous students would need their debt adjusting down to be fair to them, or compensated if they have already paid off the debt.

        • a-tracy
          Posted February 16, 2019 at 11:08 am | Permalink

          Totally agree Nick.

    • Mockbeggar
      Posted February 15, 2019 at 10:35 am | Permalink

      The science graduate asks “What’s it made of?”
      The engineering graduate asks “How does it work?”
      The accountancy graduate asks “What does it cost?”
      The arts graduate asks “Would you like French fries with that?”

  2. /IKH
    Posted February 15, 2019 at 6:26 am | Permalink

    John,

    I am not sure I agree with you or MPs in general on this issue. When 3% of the population went to University it was paid for by the state. Today when around 50 % of the population go to University the kids pay for themselves ( sort of ). This does not seem fair as the more educated the working population the better we all do.

    However, there is a second question which politics does not yet address. IMHO too many people are going to University getting worthless degrees and going on to work in jobs that do not need or benefit from tertiary education such as call centre’s etc.

    You need to find a way to get approx the right balance of people going on to University and a fair way of funding it.

    /ikh

    • Lifelogic
      Posted February 15, 2019 at 7:43 am | Permalink

      “the more educated the working population the better we all do”. Well in part perhaps, but many people would do better without the £50K of debt and without a useless degree. Many like Michael Dell, Bill Gates, Evan Williams, Mark Zuckerberg
      Larry Ellison, Jan Koum just dropped out of university. Nor does it help many footballers etc. to earn more.

      People graduating in many humanities subjects earn less than the average wage and have debt and have lost three years of earnings too. Also do not confuse cause and effect. The people who go to university are in general brighter than those who do not and so might be expected to earn more anyway. This even if 50% of them do have 3 Ds or lower at A levels – which is the apparently the position.

      • Iain Gill
        Posted February 15, 2019 at 2:22 pm | Permalink

        many people manipulate what they earn to stay precisely one quid below the limit for earnings below which you are exempted from paying back student loan. in the same way people manipulate what they earn to stay below the threshold of earnings allowed before the state takes back the “family allowance”. all these state manipulations discourage work and earning on a massive scale…

        • Lifelogic
          Posted February 15, 2019 at 5:43 pm | Permalink

          Well that is what the daft tax and student loan system system encourages many to do. Perhaps form a company and pay yourself what you choose and leave the left in the company or put it into pension. Lots more work pointless and unproductive work for accountants and directors to do. Distracting them from productive activity.

          • Lifelogic
            Posted February 15, 2019 at 8:48 pm | Permalink

            “Leave the rest” I meant.

        • a-tracy
          Posted February 16, 2019 at 11:11 am | Permalink

          Paye earners can’t do this Iain.
          But please tell me how the new graduates can achieve, I have three and would love to know because they are all paying theirs. How do you get a mortgage without true earnings shown.

          Pushing money into a pension doesn’t buy a house and run a car and feed a family, and you could be dead at 50.

      • Geoffrey Berg
        Posted February 15, 2019 at 3:51 pm | Permalink

        I very much agree with the above two comments. Education has become one of many and possibly the most damaging ‘sacred cows’ in society. It needs to be challenged. Things were much better when I went to University and only 11% of the age group went to University and were even better in 1961 when only 3% went to University. Then there were good job opportunities for people who didn’t go to university and there weren’t mountains of debt for those who did. This education mania is wasting years of most people’s lives, what with post16 (indeed even post14), degree and commonly nowadays post-graduate education. Nowadays the percentage at university is twice as high as those who could pass the 11+ exam in my day. People nowadays are no cleverer – indeed the abilities of people in ‘graduate’ jobs is much lower than previously. The present system needs major reform to restrict further education to people who can really benefit from it and to stop it wasting so many people’s time and money. No politician seems brave enough to say this, let alone do anything about it.
        P.S. I graduated from Cambridge University in 1977.

        • NickC
          Posted February 15, 2019 at 7:25 pm | Permalink

          It is not helped by Remain politicians describing all Leave voters as “uneducated” simply because older voters were part of the 97% who did not go to university in the past.

        • Lifelogic
          Posted February 15, 2019 at 8:52 pm | Permalink

          Exactly.

    • Dave Andrews
      Posted February 15, 2019 at 11:21 am | Permalink

      How about the universities have to pay back the student debt whilst the graduate is unemployed or emigrates. Then if they get a job, the employer pays it. The employer will then have to decide whether the degree is worth the extra cost, as opposed to employing someone who just has plain common sense (what the employer really wants).
      Maybe that will curtail the useless degrees.

      • Al
        Posted February 16, 2019 at 7:50 am | Permalink

        Darren Andrews, this unfortunately does penalise people who set up their own businesses out of university and the self-employed. It also risks universities declining students from areas with poor employment prospects to avoid the future bill, and adds yet more paperwork to employers.

        How about simply writing off a proportion of the debt on a per-annum basis for those graduates who are actually paying tax to the British Government (and those who are physically unable to work), which encourages getting a job, and discourages getting a degree purely because it’s ‘the done thing”. If you aren’t in those groups, you have to pay it back once you are earning. It could be handled annually through the loan company, just like everything else.

  3. Dame Rita Webb
    Posted February 15, 2019 at 6:28 am | Permalink

    Looking at the state of the Chinese economy the universities may quite soon be deprived of one their main cash cows. I wonder how much of their debt was financed on the expectation that there would be a continual flow of students from China, who would cough up fees usually twice as much as they charge British kids? I presume HMG will stick to its word that they will be no bail outs for universities that can no longer pay for all those shiny new buildings?

    • Dominic Johnson
      Posted February 15, 2019 at 10:56 am | Permalink

      And given the collective responsibility for USS once a few fall the lot will collapse very very quickly

  4. Dominic
    Posted February 15, 2019 at 6:38 am | Permalink

    When Labour came to power in 1997 their fundamental objective was to construct a client state and all and everything was directed towards this sole purpose. They’ve achieved what they set it out to do.

    Across all areas of education Labour’s presence is felt and especially in higher education where pro-Labour sentiment is very high and reinforced by the loyalty afforded to it by other areas of Labour’s client state

    Labour’s free-lunch politics is once again being invoked to buy the youth vote using other peoples money, the taxpayer. In return for voting Marxist Labour you’ll be awarded a free higher education. Even the socialist May will no doubt be considering such an abuse of the taxpayer

    And lecturers will once again by whooping with joy as they have been since 1997 and all their whining and moaning is mere client state strategy. Cry poverty, cry foul to promote and expand their budgets and incomes.

    With a proper Tory as PM the solution is a Stalinist purge of Labour’s client state with Britain being told that free-lunch politics is corrosive and ultimately self-defeating as it always leads to bankruptcy and higher taxes

    In effect the economically productive members of this once great nation will be systematically abused to finance the political ambitions of both main parties

    We are in effect financing our own incarceration and impoverishment

    • Dame Rita Webb
      Posted February 15, 2019 at 7:39 am | Permalink

      Yep in other words we need a House unBritish activities committees to investigate and remove common purpose and its acolytes

    • Peter Wood
      Posted February 15, 2019 at 8:25 am | Permalink

      You touch on perhaps the most serious issues confronting our nation’s political character. In effect we have 2 quasi-socialist main parties, just different names. Have the Tories reduced the tax to GDP rate, hardly, have they balanced the budget, have they even reduced the number of civil servants… etc. Even our host talks of ‘spending the money we don’t need to send to the EU’ when the government is still borrowing more money each year despite being 8 years into an economic expansion.

      Our country’s only hope is that within the present conservative party there are some that can come forward to lead it who do know what economic and social principles should be employed.

    • Adam
      Posted February 15, 2019 at 9:36 am | Permalink

      Reform is needed only because of previous error. People devising schemes should try to achieve Right First Time, not create a vicious cycle of corrections.

      Student Loans were cooked up like a pig’s breakfast. Their recipe lacks allure. Adding ingredients won’t add taste to the mass already discarded into a pile of student debt. Such industrial waste causes costs all our citizens pay to swallow in clearing up.

      Qualifications exist to distinguish rank. 100% admittance lowers standards. We need fewer degrees. Grant students who pass entry criteria. Enable those who fail opportunities linked to their performance.

    • a-tracy
      Posted February 15, 2019 at 9:57 am | Permalink

      Yes Dominic, BUT, Labour may grab the students whilst they are young and naive, whipped up by fanatical student union leaders, then they leave education and start paying taxes, saddled with £40,000 to £60,000 worth of nominal debt, now with a 6% interest rate so that they are paying 9% extra tax for at least 30 years (at least on scheme 1 there was a light at the end of the tunnel and the brightest could pay their loans off in total plus 3% interest – more than the mortgage rate right now) and then these bright workers are being told by Labour that in future all those graduates following up behind them won’t have any loans and won’t have the 9% tax to pay [and the Tories are actually considering this too now]- oh yeah! That’s going to work… light blue touch paper – BANG!!

      • JoolsB
        Posted February 15, 2019 at 6:11 pm | Permalink

        I agree. It’s already bad enough that you can get four graduates each from a different part of the so called United Kingdom all doing the same job on exactly the same salary, and yet one of them will end up paying the Government at least three times more than the others purely because he or she is English. No doubt the English graduate’s taxes will then be used to enable the Scots, Welsh & NI students to carry on receiving their free or heavily subsidised fees courtesy of English taxes.

        As 78% of the debt is never repaid, if fees are scrapped or lowered, then it should be retrospective for all those already saddled with massive debts for the next thirty years.

        • a-tracy
          Posted February 16, 2019 at 11:35 am | Permalink

          Exactly.

          The Government are getting lots of money from English graduates, don’t let them kid you that the English are paying their 9% extra taxes.
          From April 2019 in England:
          20% From £12,500 income tax
          12% ni from £8632 to £50,000 then 2%
          5% nest from £6136 (national insurance renamed) with no guaranteed return.
          9% student loan from £18,935 plan 1 and from £25,725 plan 2
          6% Postgrad loans from £21,000
          40% tax From £50,000 to £150,000 then 45%

          Plus any class 1A,

          13.8% The Employer pays in ni from £8632
          3% nest from £6136

          Then there are claw backs of child benefit if one parent earns over £50,000. Personal allowance claw backs from £100,000 to £123,000 this total includes benefits of company car for example so the tax rate there will be 60%

          • a-tracy
            Posted February 16, 2019 at 11:38 am | Permalink

            Should be: don’t let them kid you that the English AREN’T paying their 9% extra taxes and 15% if they did a postgrad and weren’t one of the favoured scholarship students.

            Can we see published just the English loans and the plan 1 repayments charts? Leave out the EU students and the other preferred nations in the UK.

  5. bigneil
    Posted February 15, 2019 at 7:16 am | Permalink

    Off topic
    On BBC radio news this morning, About SJ doing all he can to stop pregnant terror supporter Ms Begum returning to the UK. A few seconds later it also said several hundred had “already returned”. Isn’t he very good at his job or was he over-ruled by the ECHR on every case? I have NO doubt that Ms Begum will return to a full media fanfare, straight to hospital for care paid for by the culture she hates ( but is prepared to make pay for her baby and their comfortable lives ), then out to several VERY well-paid tv interviews.
    Roll Up ! Roll Up ! – -See the UK govt be told what to do by a pregnant teenage terror supporter wanting to get her child born here so we HAVE to pay for it, and also inevitably, the whole of her “family” members out there being given the “right” to turn up here as well, for their taxpayer-funded lives.
    Brian Rix would be too ashamed to star in the farce that is now Britain.

    • Mitchel
      Posted February 15, 2019 at 10:51 am | Permalink

      Not only that but following a meeting between Sergei Lavrov and the Jordanian Foreign Minister a statement was releasing demanding that the West,as promised,remove the “white helmets” that were evacuated from Syria to Jordan.And then there is the issue of “our” jihadists penned up in Idlib-the Syrians,Russians and Iranians are losing patience-they want that pocket liquidated.

    • agricola
      Posted February 15, 2019 at 2:51 pm | Permalink

      Totally with you here. Do you realise how lucky you are to get published given our hosts past record of avoiding anything that comes close to criticising islam.

      • Bob
        Posted February 16, 2019 at 1:45 pm | Permalink

        Mr Redwood,
        This comment was mine, I don’t know how the stray “I” crept into my name input box. Feel free to correct it.

  6. Anonymous
    Posted February 15, 2019 at 7:20 am | Permalink

    Too many young people are going to university.

    This was a cynical attempt to hide the youth unemployment figures but now leaves them open to state debt and indoctrination.

    For decades we have needed trades people, not drama people. We get client state.

    It also leaves Remain able to say that Remainers are better educated when actually they aren’t. Most have phoney degrees whereas (like me) more leavers have trades which command a respectable hourly rate for our knowledge and expertise.

    • Lifelogic
      Posted February 15, 2019 at 7:57 am | Permalink

      In many cases it is little more increasing the school leaving age from 16 to about 22.

    • a-tracy
      Posted February 15, 2019 at 10:02 am | Permalink

      Anonymous, so whose children do you stop? My children – the first in our family to ever go to University – a family of broom makers, potters, farm labourers, miners and engineers – are we to stay in our lower expectations.

      I have great respect for the crafts, trades, burger flippers, cleaners and carers but every single one of those people in my family are proud of first-class degrees from Russell Group universities our children achieved.

      • Anonymous
        Posted February 15, 2019 at 6:09 pm | Permalink

        Unfortunately diminished because degrees are now ten a penny and it’s difficult to discern a good one from another.

        A clue is if people are ringing you up and bidding you with serious money to go out to work for them.

        • a-tracy
          Posted February 16, 2019 at 1:57 pm | Permalink

          Well then their degrees weren’t dimished and all three of them pay back their loan taxes, however, the ridiculous rates of interest charged to two of them on much higher loans will mean that unlike the eldest they will not repay in full and see the light at the end of the tunnel of a heavy debt repayment even if they earn more than him. The same for our nieces.

  7. Old Albion
    Posted February 15, 2019 at 7:23 am | Permalink

    A student going to an English university pays.
    A student going to a Scottish university gets it free. But they won’t take anyone from England unless they pay.

    Yup! that seems fair…………………..

    • Lifelogic
      Posted February 15, 2019 at 7:58 am | Permalink

      But will from anywhere other than England that is in the EU.

    • JoolsB
      Posted February 15, 2019 at 9:18 am | Permalink

      ‘Anyone but the English’ Old Albion despite the fact it is the English who are paying for their free university education. Similar in Wales & NI where they only pay a third of what English kids do and insultingly Welsh students studying at English universities alongside £9,250 fee paying English students still only pay the capped fee.

      And this UK Government, a Tory one at that who would not exist without English support, say and do nothing about this blatant discrimination. I suppose they don’t want to upset the Scots whereas we know they don’t give a toss about us English except when they need our votes of course. Oh and our money to spend on everyone else but the English!

      • a-tracy
        Posted February 16, 2019 at 2:02 pm | Permalink

        We are constantly taken for fools, mugged off we say up here. That we stand for it is a poor reflection on us really, oh for a democratic alternative.

        Our children will quickly go from idealists to realists when these crippling taxes stop them progressing as fast as the Scottish grad sat next to them at work with a paid off loan. Not forgetting these Scot students have many streams of funding towards their living costs only open to Scottish students, Welsh or Irish students, English students cannot even apply for them.

    • a-tracy
      Posted February 15, 2019 at 10:02 am | Permalink

      We are not a United Kingdom.

  8. Roy Grainger
    Posted February 15, 2019 at 7:33 am | Permalink

    One obvious absurdity is that the interest rate on student debt is charged at more than 6% when the BoE base rate is under 1%. I believe this was to enable the government to sell off the loan book to commercial banks. As a start the interest rate charged should be at the BoE base rate, this would help to reduce the lifetime cost of such loans.

    • Lifelogic
      Posted February 15, 2019 at 7:53 am | Permalink

      Someone has to pay either the student or taxpayers, that is the choice. Why should those to choose not to go to uni pay for those that do? Lowering the interest rates just pushes more of the costs onto tax payers.

      • agricola
        Posted February 15, 2019 at 9:38 am | Permalink

        Because ultimately those who are not asked to pay up front will achieve their medical,engineering,or science degrees. This will lead to most of them becoming top tax payers in all its myriad complexities, paying back big time for the start we gave them. It is the way the system works with all its imperfections. We always have the ultimate sanction of emmigrating to a more desirable system.

      • William
        Posted February 15, 2019 at 9:47 am | Permalink

        It pushes the cost onto the tax payers if the taxpayer is made to make loans to people studying worthless degrees who will likely never pay back their fees. I heard they’re predicting ~80% of students will never be able to repay.

        The taxpayer should only be making loans to degrees that are worthwhile and that are likely to be able to repay them. Then we can drop the interest rate to something more reasonable than the currently absurd 6.3%.

        • William
          Posted February 15, 2019 at 9:54 am | Permalink

          Also universities should be facing some liability for offering courses/places that do not enable students to repay their loans at the expense of the tax payer. E.g. if after 10 years >80% of students from a given course have not started repaying their loans, the University will be charged ~10% of the outstanding debt per annum until it is repayed or until the students are able to earn above the threshold for repayment. This will have the added benefit of bankrupting below-market-value universities that are currently running riot with unconditional offers, worthless degree awarding and debt accruing.

        • Lifelogic
          Posted February 15, 2019 at 8:56 pm | Permalink

          The taxpayer should only be making loans to degrees that are worthwhile and that are likely to be able to repay them.

          Exactly. But governments do so love pissing you money down the drain.

    • Iago
      Posted February 15, 2019 at 8:46 am | Permalink

      I think it was announced last year that part of the loan book would be sold to factors. This (supererogation) will make the government very unpopular with the tens of thousands of pursued debtors. Having a factor on your back alters your life.

    • Stred
      Posted February 15, 2019 at 8:51 am | Permalink

      Take the case of the rare students who are bright and enterprising. They get a good job and pay 40% tax and NI plus 6% loan tax deduction. They have an idea to start a part time business and make a £40k profit. On this they pay another 40% tax plus 9% class 4 NI. If the PAYE job pays £60k they lose their allowance. It would be better to do a Dyson and move to Singapore.

      • Lifelogic
        Posted February 15, 2019 at 8:59 pm | Permalink

        Or form a company and fix you salary below the relevant thresholds and leave other profit in the company. Hammond’s highest taxes for the 40 years are indeed absurdly damaging to the economy.

      • a-tracy
        Posted February 16, 2019 at 2:09 pm | Permalink

        Shred it’s 9% loan tax not 6% plus a further 6% if they took a postgrad loan (15%)

    • Nigl
      Posted February 15, 2019 at 9:40 am | Permalink

      My advice to you, never start running a loan book. Any interest rate has to have factored in the cost of admin and more importantly write offs.

    • agricola
      Posted February 15, 2019 at 9:53 am | Permalink

      The difference between BoE base rates and what it costs to borrow money is yet another way of exploiting the population. Banks are an establishment run monopoly run for the benefit of the establishment, as are the pension companies. Equitable Life being the worst example to date that still awaits resolution. It isn’t ,because the establishment would lose out. The lack of resolution of such problems gives conservatism a bad name and breeds Corbyn extreemism.

    • a-tracy
      Posted February 15, 2019 at 10:08 am | Permalink

      Roy, This is the most disgusting charge (6% when you can get a mortgage for 25 years for 2%) on the brightest middle-class children ever. Students, if it were all students on a level playing field yes I have no problem with them contributing extra tax but a 6% interest Lifelogic really – if you can take on a mortgage with 2% interest why should these children pay 6?

      John talks about scholarships for the poorest but they don’t work like that do they, they work for the connected through the church, unions, academic parent connections, broken wealthy families whose absent father’s income doesn’t seem to be taken into account and on.

  9. Sir Joe Soap
    Posted February 15, 2019 at 7:38 am | Permalink

    The “old”system worked fine until somebody decided that increasing student numbers, building bigger Universities and employing more academics would increase socialist voting and decrease unemployment. The whole thing has got way out of hand, whereby many courses are a waste of time and money for all concerned.

    The proper solution is to work out which University courses and which students will actually benefit society in the future and fully fund those, so that the graduate only repays a student loan if they pay insufficient income tax in the UK after graduating. Meantime there’s an enormous potential for would-be students to be funded to learn a craft, trade or apprenticeship under the auspices of an employer.

  10. agricola
    Posted February 15, 2019 at 7:39 am | Permalink

    The ultimate long term beneficiary of a good education is the country. Think about what the country gets back in terms of the intellectual progress of mankind and on a more mundane level the overall tax income of a well educated citizen. It is impossible in general terms to produce a set of accounts because we are all different and there are two many variables. I would contend however that the country gets back far more than it invests. Far more in fact than it will receive from HS2 or any of it’s historic vanity projects.

    Let’s start by freeing all medical, engineering, and science degrees from student fees. Make a judgement after five years with a view to extending it to teaching, business studies, and some of the softer subjects. The last comment stems from my eldest sons comment at the end of his engineering degree course His observation was that it was only the medics and engineers who were fully occupied with study and work. The majority of the rest appeared to be on a gap year.

    The last comment I would make is that Blairs mantra of 50% of school leavers should go to university was nonesense. We should be concentrating on vocational training and perhaps we would not have needed the vast number of Polish plumbers we imported to the detriment of Poland and extending the thought, all the medical staff at the cost of their countries of origen.

    • Lifelogic
      Posted February 15, 2019 at 8:02 am | Permalink

      Indeed we really do not need even more lawyers, PPE graduates, lefty climate alarmists, gender studies “experts” and the likes.

      • Mike Wilson
        Posted February 16, 2019 at 2:28 pm | Permalink

        We appear to need a lot more ‘lefty climate alarmists’. I mean, why wait until it is too late because of people like you?

    • Nigl
      Posted February 15, 2019 at 9:48 am | Permalink

      Spot on, reduce/eliminate the support outside core ‘national interest’ subjects, invest more and raise the profile of vocational training, overseas students should either pay in advance or deposit a Bond to cover default, this should come from their own governments who they can pay back, reducing our risk and finally………

      15 billion goes to overseas aid, much to virtue signalling waste. Reduce that and invest in our young people’s future.

  11. Lifelogic
    Posted February 15, 2019 at 7:51 am | Permalink

    The provision of university places is not a proper market.

    Indeed, but in Health Care, Long Term Care, Energy, Transport, Housing, Banking, Transport, the Jobs market …… are not proper markets either in the socialist UK. They are hugely disfunctionally and should be made fare more far more like a proper market.

  12. GilesB
    Posted February 15, 2019 at 7:56 am | Permalink

    As we have compulsory education up to the age of eighteen everybody benefits from school education, and so it is reasonable that school education should be free at the point of use and paid for out of general taxation (leaving aside the whole issue of fees for private schools).
    Further and higher education is different. Many people do not want, or are not able to benefit from formal academic education beyond school. It is blatantly unfair that such people should pay through their taxes for other people’s education. The claim that Doctors etc benefit society is a red herring, and no-one would object to an exception whereby the NHS paid for the education of Doctors.

    The quality of much higher education is poor. It is time to recognise that undergraduate education does not take students to the edge of knowledge. Curriculum, and indeed teaching methods, should be standardised. A national examination in each subject would reveal the enormous difference between the top and bottom institutions. Without such measurements the weaker institutions will continue to waste enormous amounts of money and even more importantly waste three critical years of young adults’ lives.

    Democracy depends on citizen’s awareness of current affairs and critical thinking skills. Now more than ever educational institutions have an obligation to support honesty, free speech, and open mindedness. But their current obsession with identity politics and political correctness is preparing the ground for a fascist state. A root and branch enlightenment of academia is long over due

    • Iain Gill
      Posted February 15, 2019 at 6:59 pm | Permalink

      Re “no-one would object to an exception whereby the NHS paid for the education of Doctors” I would. I know lots of subjects which contribute more to this society than medicine. I know plenty of docs who move abroad anyway. And the NHS is famous for poor decisions and planning.

  13. Everhopeful
    Posted February 15, 2019 at 8:10 am | Permalink

    Too many people doing useless degrees since the 1960s.

    Sending kids off to university is a fine way of deracinating society. ( Which has been achieved in bucketloads).

    Universities are a wonderful tool for political hotbeddery. The “ conservative” party hasn’t realised this??

    The entire education system is shot through. It no longer has any purpose.

    I wish I had stayed at home and got a job. There were plenty of them in those days.

    A propose of nothing I wonder if politicians can ever be forgiven? They have robbed us of our past,present and future. For some reason I always feel particularly resentful when I remember swatting for my history finals.

    • Everhopeful
      Posted February 15, 2019 at 12:20 pm | Permalink

      *à propos

    • a-tracy
      Posted February 16, 2019 at 2:29 pm | Permalink

      Great word – deracinate /dɪˈrasɪneɪt. verb
      gerund or present participle: deracinating
      uproot (someone) from their natural geographical, social, or cultural environment.
      “a deracinated writer who has complicated relations with his working-class background”

  14. Ian wragg
    Posted February 15, 2019 at 8:11 am | Permalink

    Isn’t it time the exorbitant salaries paid to University Heads addressed. All student fees have done is encouraging more snouts in the trough.
    Incidentally it’s only English kids who suffer this burden.
    Maybe after the political duopoly is smashed after Brexit we can get some fairness for we English. Well done defeating May last night. Keep it up.

  15. Javelin
    Posted February 15, 2019 at 8:22 am | Permalink

    Simple solution.

    If you went to a private school then you automatically have to pay fees.

    If you went to a state school you can compete for grants. .

    If you went to a state school and didn’t win a free place then you will be means tested.

    • Robert Christopher
      Posted February 15, 2019 at 11:04 pm | Permalink

      The privately educated, university fee paying, graduate would expect their enhanced earning power, gained without the enhanced help from the public purse, would expect a reduction in any future tax on earnings: a single person’s allowance plus 20%, with no 40% ( or higher) income tax band would suffice.

    • a-tracy
      Posted February 16, 2019 at 2:33 pm | Permalink

      Javelin if you take private schools out, they will simply fill up the best grammar schools and Catholic and Jewish schools getting their places by using their wealth and position on Governor boards and what they can do for the school, displacing even more poor but clever kids from the best chance to get out if their parents are switched on.

  16. Oliver
    Posted February 15, 2019 at 8:27 am | Permalink

    The present systemn is a sham – we don’t get repaid by people doing wasteful courses that don’t generate sufficient income to become liable to repay, via what is in all but name a graduate tax.

    Inheritance tax – at 100% until the debt is repaid – on their parents estate – from which they will otherwise benefit without any impact on their requirement to repay – might help. What to do about the [intellectually] deserving poor with no such parental prospects… mmm?

  17. Bryan Harris
    Posted February 15, 2019 at 8:58 am | Permalink

    It seems strange that a system designed to limit taxpayer liability allows for the taxpayer to pick up the costs pf those that cannot or will not pay.
    The system has not improved our educational standards at all, and perhaps this is due to the snowflake style courses offered by some universities – but it seems that it is relatively easy to get a degree, which in fact cheapens the whole area of certification.
    When are the Tories going to get back to the concept of attainment through merit?
    The first thing that needs to happen is to purge/re-educate the uni lecturers who dispense more socialism than they educate students…. That might improve the quality of those getting a degree.
    I would rather see direct grants to universities, rather than the debt ridden excuse for a system we now have – Universities might then tidy up their act, and become a useful contribution to the economy – They should be able to charge non-British students any fee they want, but then allow any British students in to study, based on their achievements to date, but of course, places may be more limited than they are now.

  18. Caterpillar
    Posted February 15, 2019 at 9:00 am | Permalink

    1. Reframe as a graduate tax not loan.
    2. Expand degree apprenticeships
    3. Make nationally set exams at level 6 available on subjects without large practical element. This will allow people to self teach or just seek tutors when needed (more competition).

    Require degree educated MPs to behave like well informed adults. Currently they are showing what a law, humanities or social science degree produces. The HoC is a good advert for not having a degree.

  19. JoolsB
    Posted February 15, 2019 at 9:09 am | Permalink

    Let’s be honest, the UK Government have washed their hands of tertiary education in England. They and the Labour Government before them have created a system where anyone can get into university nowadays often to do ‘meaningless’ degrees. Of course these are the ones who will never pay the debt back whilst the ones doing meaningful degrees with the skills the country needs will end up paying a whopping extra 9p in every pound they earn for the next 30 years plus let’s not forget the punitive 6.3% interest the debt has been accruing since day one.

    Surely if our self serving politicians, who themselves received it all for free, had an ounce of common sense or fairness (which they clearly don’t) then all STEMM subjects would be free on condition once graduated, they stay in this country. I am sick of hearing politicians saying the NHS would not survive without foreign doctors when the answer is under their ignorant noses – doctors get their fees paid provided they work for the NHS for a number of years. The alternative is they take their services abroad and who can blame them?

  20. JoolsB
    Posted February 15, 2019 at 9:20 am | Permalink

    John, here’s and idea. If the UK Government is writing off 78% of all the debt, why not go the whole hog and create a level playing field for England’s young and write it all off. Maybe we could use the foreign aid budget to do it.

  21. gyges
    Posted February 15, 2019 at 9:20 am | Permalink

    You could run the two systems in parallel where A-levels where used to enable some students to pick up University grants. In this way the Universities would have their crop of students to exploit and the capable ones would have a subsidised education. You could even go a step further and make it unlawful to discriminate against people on the basis of their educational attainment.

  22. Jiminyjim
    Posted February 15, 2019 at 9:25 am | Permalink

    Anyone commenting on this should first visit a dozen universities. You will find that they all show every sign of organisations whose pockets are stuffed with money. £60m library, £30m sports hall, anyone? Also look at the salaries. These are not businesses, their income is more or less guaranteed by the state. Secondly, the Economist has done research and believes that as many as 77% of these loans will not be fully paid off after 30 years. Imagine running a business that way. A minister told me a while back that they expect unpaid student loans to increase our total national debt by 10% in 30 years – scary. We should be hugely increasing the number of medical places rather than importing a shortfall of doctors from third world countries who need them locally. Finally, the decision to do away with our technical colleges and make them all universities was an act of national self-harm. We should start by deciding what we need as a country, and fixing our policy on fees to deliver it, at the cost of all the degrees in media studies

    • a-tracy
      Posted February 15, 2019 at 8:40 pm | Permalink

      ‘the Economist has done research and believes that as many as 77% of these loans will not be fully paid off after 30 years.’ Was this the pre-2012 plan 1 loans, or the much higher cost, high interest from day 1 of the loan plan 2 student loans. I read plan 2 loans were devised to give graduates no chance of paying them off because it was always meant as an extra tax. Any 9% payment is more to the government than the previous 0.

  23. Rien Huizer
    Posted February 15, 2019 at 9:27 am | Permalink

    Mr Redwood,

    This is a difficult topic where a simple utilitarian/classical liberal like myself would tend to suggest solutions incompatible with democracy based on universal suffrage. In principle there is no reason why the government should fund private investment in career opportunities. But a pure market solution (even the US has forms of subsidy despite a largely private university system) would probably lead to sharp reductions in university revenue (initially, maybe foeign students would make up for the slack, like in Australia) , reduce capacity for training teachers and foment movements with irrational put popular ideas about social responsibility.

    Under ciscumstances such as these no solution is really good and probably it is best to nudge the system in a direction where the most important priorities (supply of teachers, medical professionals etc are taken care of. On the other hand, there is nothing wrong with people making sacrifices for future careers. There is no need to have an oversupply of experts in Inuit food storage habits, but there should be more medical specialists (the bottleneck there is not university funding but self interested behaviour of incumbents preaying on registrars), practical people (“engineers”) . So, one should question the following:
    – why should everyone with the relevant secondary school achievements be supported by the state to follow an adcademic rather than practical education
    – why wshould the state not aggressively collect graduates’ debt service.

    Maybe the problem is also that many politicians tend to be of precisely the age (40-50) where family decisions about tertiary education are taken. Nobody is perfect.

    • a-tracy
      Posted February 16, 2019 at 2:42 pm | Permalink

      I would understand if the NHS paid the 9% student loan value on behalf of those doctors that accrued it working full time at least 37.5 hours per week for the NHS, not through a blanket rise for all doctors, medics, nurses etc. Same for teachers in State schools. They would have to sign up for fifteen years because the cost of a doctors training isn’t just the tuition fee or they have to buy themselves out at the true cost.

  24. Denis Cooper
    Posted February 15, 2019 at 9:43 am | Permalink

    Off-topic, JR, I would draw attention to the speech made by Sir Oliver Letwin during the Commons debate yesterday, starting at Column 1108, here:

    http://bit.ly/2DEkOqI

    in which he proposed a usurpation of power which would certainly place participating MPs in breach of their Oath of Allegiance:

    https://www.parliament.uk/about/how/elections-and-voting/swearingin/

    and render them liable to various criminal charges including potentially treason.

    “This is a remarkable condition for Parliament, the Government and this country to find themselves in. The structure of our affairs, almost throughout our history, since this House first established its rights over and against the Crown, has been that the Government — Her Majesty’s Ministers — put forward policy and carry it out, subject only to the ability to maintain the confidence of the House, and to legislate in it. To my knowledge, it has never previously been the practice for this House to have to take control and direct Government policy by legislation. That is an astonishing turn of events.”

    And a turn of events which should not go unchallenged by all available means.

    I do not suggest that our present monarch should follow the example of her predecessor Charles I and lead a troop of soldiers into the House to attempt to arrest those plotting to seize power from the ministers she has appointed and illegally take the conduct of public affairs into their own hands, which was a step on the road to the civil war; but surely there must be an internal mechanism to put a stop to what amounts to a revolution?

    I would have more sympathy with this MP and his coterie if they were seeking to defend the rights of Parliament; but they are not, on the contrary they have always been perfectly content to see powers transferred away from our national Parliament to the institutions of the EU, and their overall objection since the referendum has been simple, that the ratchet will be released and the gradual process of stripping power from our Parliament will now be reversed; and their primary loyalty being to the EU their current complaint is that it may not be allowed to dictate the terms of our withdrawal, which they hoped could result in the only deal on offer being so bad that we decided to stay in the EU after all.

    • old salt
      Posted February 15, 2019 at 5:59 pm | Permalink

      Michel Barnier in 2016 as quoted in the French magazine Le Point.
      ‘I shall have succeeded in my task if the final deal is so hard on the British that they’ll end up preferring to stay.’

  25. Narrow Shoulders
    Posted February 15, 2019 at 9:45 am | Permalink

    Let us start with the premise that we do not need so many graduates and work from there.

  26. christopher carr
    Posted February 15, 2019 at 9:56 am | Permalink

    The debate about fees seems to have made us focus too narrowly on the universities and overlook other ways to achieve results. Where I live, there is Norwich City College which offers excellent courses in subjects from IT to catering, and a very highly regarded Arts College (it’s recently been re-titled a university, but has not yet changed its character). These are teaching institutions, not primarily research centres. They are more akin to the old Polytechnics, which for some reason (intellectual snobbery?) we discarded some decades ago even though they had dedicated, expert and effective teachers.

    A university has two functions: research and teaching (and more amorphous ones such as drinking and socialising). We sometimes boast of the number of Nobel prize-winners among our professors, of the level of scholarship. On another level, promotion in academia relies to some extent on publishing papers or books, and there is pressure on academics to publish or be damned, whether one has something to say or not (which makes tedious work for copy editors). These functions do not always sit easily together. Great scientists and scholars may be great teachers, but their focus is not on teaching and many are not easy in that role. Any graduate will remember some excellent lectures, but many more that were badly delivered.

    We should cherish and foster universities, but not neglect the institutions focused on teaching. It would be useful if we could boost the status of the best local colleges and develop something closer to the old Polytechnic system, perhaps alongside apprenticeships organised by colleges working with companies that wish to improve the capabilities of their staffs. University should not be seen as the universal way that everyone should follow.

  27. oldwulf
    Posted February 15, 2019 at 10:28 am | Permalink

    Some degrees are worthy of taxpayer support and some are not. The degrees which receive taxpayer support need to be conditional on the student remaining productive in the UK economy for a period of time – subject to safeguards for health issues and other matters.

    Some universities might be well run and some might not. This is a more difficult issue but does need sorting out. Limited exposure to market forces might help. There is a shortage of affordable housing in the UK. The answer might be here ?

  28. formula57
    Posted February 15, 2019 at 10:31 am | Permalink

    Australia faces similar questions and dissatisfaction is equally high. The uncapping of university places some see as the main driver of current problems, converting universities into rent-seeking businesses.

    The Business Council of Australia last November called for a single funding model for skills training and university education that eliminates incentives that pulled students into universities. Such broader consideration of education funding seems sensible.

  29. Shieldsman
    Posted February 15, 2019 at 10:33 am | Permalink

    Once again we have people complaining that children from poor families are not gaining places at the top Universities. Are they saying they have the academic ability to benefit from a top University, but not gaining a place just because they are poor? Parents do have a responsibility and in cooperation with their child’s School teachers can overcome the financial hurdle.
    I am afraid a politically correct Parliament has allowed Academia to expand with doubtful results. Pay the fees (borrowed), stay the course and you will receive a piece of paper saying you have a degree. The value of that degree can vary immensely. It may earn you a fortune or be worthless in financial terms.

  30. Bob
    Posted February 15, 2019 at 10:38 am | Permalink

    “Offering more scholarships to lower income students might be a better way forward”

    Mr Redword,
    I thought the idea was that they don’t have to repay anything until their earnings rise above £25k. Why would you justify awarding scholarships to some and not others?
    Would it be based on “Protected Characteristics”?

    • a-tracy
      Posted February 16, 2019 at 2:50 pm | Permalink

      I agree Bob, Scholarships aren’t given on merit I have seen it many times. They are not always given on poverty or need either. I’ve seen millionaires children given full scholarships because their divorced father’s income isn’t taken into account.

  31. acorn
    Posted February 15, 2019 at 10:42 am | Permalink

    The nominal value of Student Loans outstanding is circa £120 billion, 6% of GDP. The stats are showing that only 30% those loans will ever be fully repaid. The OBR reckons at the current rate of student loaning it will 20% of GDP by 2040! “Student loans and fiscal illusions – OBR”.

    The big problem is not the money, the Treasury has a bottomless pit full of that; it is how the Chancellor disguises the loan losses from showing up in a budget deficit and adding to the, so called, national debt. Like he did with the Banks in 2008.

    • a-tracy
      Posted February 16, 2019 at 2:56 pm | Permalink

      Oh come on acorn, previously graduates didn’t pay anything back of their fees, or grants. It was still a cost to support them all, even those that dropped out, left the Country, took their skills say a doctor off in an unrelated area.

      At least this way the exchequer is quite a lot of extra tax, in addition to the higher taxes of the most successful. It is not the tax I object to, it’s that the fees are only paid by English students, plan 2 students – that they are charged 6%+ punitive interest rates from day 1 of the loan.

      I have no problem that my STEM grad son pays his contribution back for his degree and will pay it off in full, he couldn’t have got his job without his degree, BUT I do object if someone else got his job and didn’t pay their tax, it’s just unequal system. Too severe for plan 2 grads and why the hell should the best of them have to pay so much more.

      • acorn
        Posted February 17, 2019 at 6:59 pm | Permalink

        Your problem is you don’t understand the macro.

        • a-tracy
          Posted February 18, 2019 at 9:34 am | Permalink

          correct.

          Shouldn’t we be told what the ‘macro’ is, not by you but by the government that is moving money around setting up false pots for this, that and the other and trying just to cook the books?

  32. Denis Cooper
    Posted February 15, 2019 at 11:04 am | Permalink

    Also off-topic, here is some nonsense from Irish Foreign Minister Simon Coveney:

    https://www.irishexaminer.com/breakingnews/ireland/eu-in-no-mood-to-sacrifice-irelands-interests-to-reach-brexit-deal-904561.html

    “EU in ‘no mood’ to sacrifice Ireland’s interests to reach Brexit deal”

    “Those commitments (from Britain) still stand and we can’t just wipe the slate clean and have people make farcical arguments like ‘well you don’t want a border, we don’t want a border, the EU doesn’t want a border’, so let’s just pretend it’s not a problem.

    “That’s kindergarten stuff.

    “In fairness to the Prime Minister I think she has faced down that type of thinking.”

    Firstly, there already is a border and he is the one pretending, just as he and other Irish politicians have long been pretending – this is from December 2017:

    http://johnredwoodsdiary.com/2017/12/04/two-views-of-brexit/#comment-905007

    “I’ve just heard the Irish Foreign Minister speak against “the re-emergence of a border on this island … ”

    Secondly, if we and the Irish and the EU are not going to “harden” that border then who is going to “harden” it?

    Would it be leprechauns building the border control posts?

    And thirdly, if Theresa May has “faced down” that British kind of thinking, instead of laying into the Irish kind of thinking as she should, could that be because she has been colluding with the Irish government against our national interests?

    Replying to stred at the weekend:

    http://johnredwoodsdiary.com/2019/02/09/the-irish-border-2/#comment-994851

    ““But May needs the Irish and EU to insist that it doesn’t work.”

    Correct. I have to admit that this only dawned on me about six months ago, when I read praise of her Chequers proposal from a business lobbyist and it suddenly clicked in my mind that her stubborn refusal to consider any easy alternative solution arose from her inspired decision to use the problem as a pretext to give the likes of the CBI what they wanted. Since when I have had another moment of insight when I realised that in all likelihood she and Leo Varadkar are colluding to achieve their shared aim of keeping the UK under large swathes of EU customs union and single market rules.”

    • Duncan
      Posted February 15, 2019 at 8:17 pm | Permalink

      Denis..let me explain how it’ll be if UK leaves in a disorderly fashion. First of all the EU will insist on a hard border in Ireland, they will see it as having no choice- and to do this may even bring in seconded officials from other EU countries to help- but they will make a hard border. Secondly if they have to go to that extreme in Ireland then we can expect the same will happen at all of the other ports on the French coast, also Belgium and The Netherlands..the EU will certainly insist on this. So after that WTO rules will count for little or nothing we’ll be in a real trade war. Irish beef export and milk produce will have to go into EU intervention..like the wine lakes and butter mountains of old. Traffic through Dover Calais will not be the same either..for sure

      • Denis Cooper
        Posted February 16, 2019 at 7:13 am | Permalink

        Thanks for that explanation, based purely on your own conjectures. But clearly we should be preparing now for the EU to behave in that totally unreasonable way, both in terms of practical countermeasures and also the propaganda war to summon support from all the other countries around the world that would suffer economic disruption.

  33. a-tracy
    Posted February 15, 2019 at 11:06 am | Permalink

    You skipped over the parent’s contribution see: https://blog.moneysavingexpert.com/2018/11/how-much-should-you-save-for-your-kids-to-go-to-university-/

    “Tuition fees for first-time UK [SIC. ENGLISH UNDERGRADS NOT UK] undergraduates are paid for them by the Student Loan Company and you only repay afterwards if you earn enough – you repay 9% of everything above £25,000 currently. So I’m not going to focus on that – what this is about is the cost of living while you’re there.

    And students get a living loan too, but the thing they don’t tell you is it’s means tested, and therefore the gap between the full loan and the amount you get is effectively a parental contribution. Why a parental contribution? Because if they’re under 25, except in very rare circumstances, the means testing is based on family income which is a proxy for saying, “parental income”.

    So yes, while they’re old enough to vote, old enough to marry, old enough to die for our country, students under the age 25 under the student finance system are not treated as independent adults.”

    Martin Lewis clarifies”…. when students receive their living loan letter, it tells them the amount of loan you’re getting: “You’re going to get £5,000 for your living loan.” What it doesn’t do though is tell them: “The full loan is £10,000. The reason you are only getting £5,000 is because of that means testing – the gap of £5,000 is effectively the parental contribution.”

    Poorer families children are already means tested and getting more as their parents don’t have to contribute and they don’t have to work, like many average earning parents children, whose parents don’t just hand over this top up because they’ve got other children to fund childcare on, other pension shortfalls to make up, large mortgages and loans etc.

  34. ian
    Posted February 15, 2019 at 11:08 am | Permalink

    Maybe you can tell the votes about the money being spent on bringing down the student debt this year out of the spending budget, I think it 6 billion a year and how much the gov reckon they will still be owed by 2046 which is going on the national debt.

    Then the 5 1/4 billion for health care and the 6 billion a year for HS2 starting sometime this next tax year if it goes ahead, that’s without keeping up with another spending as promised.

    It seems that health care will get the smallest amount of money, 30,000 people died last waiting for an operation.

  35. John S
    Posted February 15, 2019 at 11:34 am | Permalink

    To be brutally frank, less than 10% of the population is capable of achieving an honours degree in one of the traditional subjects such as Engineering, Science, languages, etc. , at say a Russell group university.

    The desire of the Blair government to have 50% of school leavers going to university to study for subjects which may be better studied part-time at say diploma level, or even worse, subjects which are no good to man nor beast, is a total nonsense.

    I would like to turn the clock back to the time when degrees were for the academically elite, in which case course fees would be affordable for the tax payer. Many of these graduates would drive innovation and wealth creation at great benefit to the population.

  36. TomTomTom
    Posted February 15, 2019 at 11:53 am | Permalink

    My daughter is currently in her second year of nurse training.

    It costs her 9k pa for the fees + 4k pa “living allowance”

    Since the 4k doesn’t even cover the cost of the accommodation I contribute around £7k per year.

    At the end of her course, she will “owe” about 40k. I will have supported her to the tune of 21k and I am happy to have done so.

    When she starts work, almost certainly for the NHS, will she earn enough over the threshold to start repaying her loan?
    I don’t know.

    Will a career in the NHS allow her to repay the loan at all by the time she is 50?
    I don’t know.

    The problem with loans as I see it is that there are people who do courses in a variety of subjects that whilst interesting are not going to lead to a job where they ever can repay the loans.

    The loans are written off when a person reaches 50.

    There are people who do courses that lead to high paid jobs, in which case the loan is repaid and it was the best investment the individual will ever make.

    But there is a large section of people who are skilling up to do jobs we need as a society ( nurses, teachers, social workers etc) but who will just earn enough over the threshold to start making repayments but are in areas where the wages are always constrained.

    We apparently want more nurses and teachers. But the system is skewed to punish those people who think about embarking on a career path that will not be hugely financially rewarding but is socially required.

    Someone said in the comments :

    “Why should someone who doesn’t go to Uni pay for someone who does?”

    Well, my question back would be :

    “Why should someone who doesn’t go to Uni expect my daughter to subsidise their care from her salary when they are sick and need her most?”

  37. Andy
    Posted February 15, 2019 at 1:39 pm | Permalink

    Different fees should be charged for different students.

    If you come from a regular background you pay standard fees.

    If you come from a failing school and qualified for free school meals your tuition fees should be waived completely.

    If you went to an independent school your fees should be doubled.

    If you went to an elite public school – like Eton – your university fees should be quadrupled.

    • Anonymous
      Posted February 15, 2019 at 6:45 pm | Permalink

      Free school meals is not a reliable criteria.

      We were deemed to well off to qualify for them yet at the time could not afford to pay for school meals, so the boys went with packed lunches.

      Fortunately they passed grammar school selection and are now doing exceedingly well at Russell Groups on STEM courses.

      I got stuck in a failing school. The lefties there did not believe in streaming and I’ve never forgiven them since. My education was built up over the years in night classes and correspondence courses. At no point did I think I should have got into university – I would not have been prepared for it.

    • Cliff. Wokingham
      Posted February 15, 2019 at 8:46 pm | Permalink

      Successive governments have made a simple problem more and more complicated.
      The simple answer, is to adjust tax codes so that graduates pay a couple of pennies in the pound more over their working life. This way those who gain the advantage of a university education will be the ones who pay for it over their working life

  38. Man of Kent
    Posted February 15, 2019 at 2:25 pm | Permalink

    I once met a University of Nebraska professor in a ski queue in the US .

    He was the Cloud Cray Professor of American Capitalism .
    Named after the sponsor .
    What did this entail ?
    A 4 year deal where he was sponsored 100 % in year 1 , 75%in year 2 , 50% in year 3 , 25% in year 4 and zero thereafter .
    For this he had to recruit his own students at a fee set by himself , pay himself and support staff and teach the subject to a level where employers would be happy to employ the graduates .

    Just imagine our lot of vice chancellors having to justify their salaries in such a way .

    Just saying there are other ways !

    • hefner
      Posted February 15, 2019 at 7:48 pm | Permalink

      You are talking apples and oranges here: chancellors and presidents of US universities get between $150k and $500k/year depending how prestigious the university is. That is not so very different from what the equivalent vice-chancellors get in the UK.

      Then your example is a professor likely to have had to spend a good deal of their time writing numerous proposals to get such money to support themself, staff and students. The average success rate of research proposals in the US moved from about 10% in the 70s to less than a few percent in the 2000s. Depending on the size of their research group and the actual focus of the research, those in charge of such programs can get from some tens to some hundreds of thousand dollars or sometimes even million of dollars (depending on the cost of the research infrastructure) but as you pointed out over a limited period of a few years, during which they again will spend a considerable amount of time writing proposals (and reviewing those of competitors working in the same field), defending them in front of committees, …
      The professor is very likely to be quite close to the research developments of their group.

      The chancellor/president is much more an administrator involved in sustaining/defending/developing/advertising the university they are responsible for against the multiple actors (politicians, business, …) outside the university itself.

      • Man of Kent
        Posted February 16, 2019 at 12:39 pm | Permalink

        Thank you !
        Yes you are quite right .
        I was just trying to make a general point that there is a place for individual initiative in the American system .
        Here all courses charge the same – £9000 pa – whatever the complexity or call on resources .
        I had hoped that students would have held the whip hand and negotiated lower fees for ‘easy ‘ courses but instead the universities are holding together as a cartel .
        Indeed ,in the chase for income , students are being offered assured places regardless of grades !
        What a waste of money !

      • a-tracy
        Posted February 16, 2019 at 3:03 pm | Permalink

        Our vice chancellors are on similar amounts Hefner, what are the expectations on them.

        Do they have to show for example that 75% of their grads are earning sufficient wages to start paying back their student tuition fee loans within say 4 years? If I were in government I’d use that benchmark even if I didn’t publish it. Poorly provided degrees that didn’t do this would be reduced in numbers.

        • Stred
          Posted February 17, 2019 at 10:50 am | Permalink

          And in the US, profs don’t get paid holidays.

          • a-tracy
            Posted February 18, 2019 at 9:37 am | Permalink

            Do they get access to final salary pensions?

  39. fedupsoutherner
    Posted February 15, 2019 at 2:42 pm | Permalink

    As usual it’s the English kids that pay through the nose. The Welsh get it cheaper and Scotland free. Scots leave Uni being able to take advantage of the whole of their wages while English kids are in debt before they even start life. There are too many going to Uni studying worthless degrees. Apprenticeships would be better for many students but alas, they are few and far between. There are so many youngsters leaving Uni and then going on to do a job that anyone with a bit of common sense could do equally well. The system needs an overhaul.

  40. Bryan Harris
    Posted February 15, 2019 at 2:52 pm | Permalink

    Universities are still failing to admit enough poor white students and half have 5 per cent or less in their intakes, a study has found.
    Meaning that blair’s big promotional reason has gone very sour… Time to reverse this scheme and make university entrance competitive, based on merit

    https://www.dailymail.co.uk/news/article-6707235/The-universities-five-cent-places-working-class-white-students.html?fbclid=IwAR34GyylGfnguAzOrT0ER1yjD90xTglabwVPzeieqR_2mAbBvw2UFhl2Wzk

  41. Denis Cooper
    Posted February 15, 2019 at 2:58 pm | Permalink

    Off-topic yet again, sorry about that JR, recently I haven’t paid much attention to the normally pro-EU, anti-democratic activities of the unelected legislators-for-life in the House of Lords, but over lunch I flicked on a BBC Parliament recording of the Brexit debate they held on Wednesday just as Lord Falconer was speaking, and for a change he was actually talking some sense.

    https://www.theyworkforyou.com/lords/?id=2019-02-13a.1851.7&s=speaker%3A12851#g1915.0

    “The second dishonesty is that there is a realistic prospect of getting some sort of changes to the backstop. We know that the Prime Minister urged the House of Commons to vote for the Brady amendment, the terms of which required the replacement of the backstop with “alternative arrangements” that would deliver an open border. The three proposals that she is making in these negotiations are: that there be a time limit for the backstop –
    the Irish Government have made it clear that they would not accept that, quite rightly, because it would not be a backstop; that the United Kingdom have a unilateral exit, which is equally problematic for the same reasons; and that the whole backstop be replaced by something else – I do not know what; possibly the Malthouse compromise.

    The Malthouse compromise involves the United Kingdom entering into a customs agreement with the European Union that there be no tariffs on goods, which is perfectly possible. As everybody in the House will understand, it does not obviate the need for a customs border, because you have to check where the goods come from to see if they are entitled to the no tariff. The answer, not from Mr Malthouse – obviously a totally admirable chap who has simply brought these people together – but from the people advancing this nutcase compromise, is that there will be technology that makes it clear from which country these goods come. That is how the Malthouse compromise deals with the customs aspect.

    As far as the regulation aspect, what Mr Malthouse proposes – not him, but other people -is that there be an agreement between the European Union and the United Kingdom that both sides be deemed to have the same regulatory position. They advanced that case on the basis that we have the same regulatory position at the moment and it is not likely to change that much over the period of time, so let us therefore just treat the regulations as the same. It is clear what is being asked for. It is completely hopeless as a proposition, because the European Union is rightly saying that it cannot have a flapping open door if we are not in the customs union or the single market. That is a flapping open door.”

    Well, my answer is not that we should offer to use “technology” at the border to ensure that goods being carried across from the north to the south comply with all the various requirements prevalent in the south, and the rest of the EU – after all we already know that the Irish government is totally inflexible in its rejection of “technology” at or even near the border, and so it is not worth even raising the subject with them or with the EU – but that we offer to pass and rigorously enforce a new UK law to prohibit hauliers carrying across goods which do not comply with the EU requirements, thus making it unnecessary for Irish customs to reinstate routine checks on incoming goods at the border.

    • acorn
      Posted February 15, 2019 at 6:03 pm | Permalink

      Denis, both the UtterBerry and Fujitsu, so called, “invisible border” systems were examined by UK; Ireland and EU techies. All came up very short. In fact the UtterBerry system would have created a system of surveillance of all of Ireland’s citizens equivalent to laboratory mice!

      • Denis Cooper
        Posted February 16, 2019 at 7:21 am | Permalink

        Thanks, I will look them up for interest; but even if they worked it would make no difference for as long as the Irish government continued to reject the use of any technology at the border, in fact continued to reject anything that would even imply the existence of a border.

        From November 24th 2017:

        https://news.sky.com/video/is-the-norway-sweden-border-a-solution-for-ireland-11141058

        “Is the Norway-Sweden border a solution for Ireland?”

        The answer from Ireland’s Europe Minister Helen McEntee, at just over 3 minutes in:

        “We have been very very clear from day one, there cannot be a physical border and that means ruling out cameras, that means ruling out technology, that means ruling out anything that would imply a border on the island of Ireland, it is not an option for us”.

        Note this was not just “ruling out reinstatement of customs posts at the border”, the false impression conveyed by many media reports, it was “ruling out anything that would imply a border on the island of Ireland”.

  42. ian
    Posted February 15, 2019 at 5:20 pm | Permalink

    China is the first country to bailout table this year with 4.64 trillion yuan this month and ECB talking about more QE this year for the EU, they just stop buying the bond at the end of Dec 2018.

  43. Original Richard
    Posted February 15, 2019 at 6:15 pm | Permalink

    Perhaps the fees charged for a particular course could be made a function of the success or otherwise of past students paying back these fees.

  44. JoolsB
    Posted February 15, 2019 at 6:23 pm | Permalink

    This is a classic example of why England needs it’s own parliament with dedicated MPs willing to stand up for England unlike now and stop this discrimination against our young. The Scottish Government don’t charge their students, the Welsh Government heavily subsidise theirs, same with NI, all courtesy of English taxes. This Tory UK Government like the Labour one before it gets away with this blatant discrimination against England’s young, England’s sick and England’s elderly because unlike the rest of the dis-UK, England has no-one fighting it’s corner. They see England as nothing more than a ca$h cow for the benefit of the rest of the UK and world, everywhere except England. They couldn’t give a stuff England.

  45. Turboterrier.
    Posted February 15, 2019 at 7:02 pm | Permalink

    O/T. How the parents of all the students and children who took time off from their studies today must be feeling pretty good about their actions.

    When they come home and want them to fly to exotic destinations on holiday they will be able to say “no can do it is against your beliefs for action against climate change”

    What a boost for the UK when they all stay home and holiday here.

    These children will be all voting for the greens in about three to five years time then the sticky and smelly will hit the fan.

  46. Andy
    Posted February 15, 2019 at 7:13 pm | Permalink

    What a fabulous sight today. Thousands of schoolchildren stand up for their planet, their future.

    And what a predictably miserable response from our aging, irrelevant, failing government. Should be in school blah blah blah.

    No children. You should take to the streets in your millions so the Tories understand the electoral future which awaits them.

    Today’s 13 year olds can vote in the election after next. Today’s 8 year olds can vote in the one after that.

    In 10 years we can wipe the Tories out for good. Viva la revolution.

    • Fedupsoutherner
      Posted February 15, 2019 at 10:38 pm | Permalink

      Andy, pathetic comment even by your poor standards.

    • a-tracy
      Posted February 16, 2019 at 3:06 pm | Permalink

      The one sided politicisation of our children is not something you should be proud of, it is something we should be ashamed of.

  47. Trevor Butler
    Posted February 16, 2019 at 6:03 am | Permalink

    Our younger daughter is nearing the end of second year in a journalism degree – so far it as cost my my wife and I about £30K to subsidize her as she is a single mother and the loan/grant does not come close to covering costs AND she’s going to end up with £40K of debt – She told us that the moment she qualifies she is leaving the UK and never returning…already been offered a position out here in Hong Kong once she qualifies…So that will probably cost us a another few K to get her set up….Happy days….

    • a-tracy
      Posted February 16, 2019 at 3:08 pm | Permalink

      I hope there is a way the student loan people can charge her back for her loan. That is something that must be corrected John.

  48. anon
    Posted February 16, 2019 at 10:31 am | Permalink

    Treat all UK nationals and students the same.

    Allow industry to support the subjects offered indirectly, via the “apprentice levy” co-supported by direct grants. Industry would vote in the priority for funds.

    Interim:
    Tax relief to repay loans set at (basic rate plus NI) 33%. No higher rate relief.
    Interest to be charged at BOE rate.
    Full accountability on bad debts/write offs,and current payment profiles by course, by institution, by nationality.
    Mnadatory controls on excessive salaries at loan funded institutions with appropriate reserves being made by the institution to fund a proportion of the the “bad debt”. ie control measures.

    Non UK national student bad debt should be “wrote off against the overseas aid budget” or sold to overseas debt collection agents.

    Those that are unable to pay “debt” should still have it attached on their estate payable on death or written off on death. The interest rate for those on low incomes should be zero percent.

    NHS should fully fund Doctor’s and Nurses places with appropriate contractual terms for bad leavers. The aim should be to oversupply the market so we can export good staff to the world rather than steal other countries talent.

    There can be no excuse we do not train enough Doctors when we are hearing 70% of debt is being written off.

  49. margaret
    Posted February 17, 2019 at 9:29 pm | Permalink

    I remain in favour of a solid education and fees perhaps a little more modest than they are at present.What some don’t grasp is that education is not simply about what others tell you to read and learn and be tested on, although there has to be a way of starting to reach some commonality and shared expertise for society.
    I become upset when those studying in certain buildings with syllabuses which are only recognised by those same institutions and they think they are above any other, as in the real world these things taught only exist in a small way for the few and not the many.
    There is a joy in learning and discovering like nothing else and the snobbishness surrounding learning takes that joy away. It becomes how good we are when examined on the day or more modernly how well we got on with the lecturer taking the modules.
    Have you ever been in an exam and know material back to front, then sit at a desk in a room with many others and the information simply flies out of your head and you even write what your next person has written without knowing it. It needs to be said that this happens to many. They they go back into the real world outside the examination room and original information returns and credit isn’t given for knowing this in the first place.
    It isn’t any use saying to children/ teenagers who are beginning to learn what fairness is that this is life and life is unfair.
    I work with many people with higher degrees and for the most it does not improve their job performance. We really need to think about the purpose of education and how much weight we give to certain degrees.I certainly don’t want education bigots.

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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