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Think tank report criticises English student loan system

ByGavin Dewar

Nov 25, 2014

The Higher Education Commission (HEC) has criticised the funding system of English universities for “representing the worst of both worlds.”

The report, released on Tuesday, came just before the largest a student demonstration in London since 2010, which occupied Parliament Square and demanded UK-wide free higher education.

The report accused the coalition government of putting English universities on a “far from certain” course. It insisted that students will increasingly find themselves unable to pay back their excessive student loans in the 30-year repayment period.

Dr Ruth Thompson, who co-chaired the inquiry which led to the report, said that “all parties feel they are getting a bad deal.”

She continued, “While our higher education system has the strength and resilience to withstand considerable turbulence and volatility, the commission found that present levels of uncertainty and risk mean the future financial sustainability of the current funding model is far from guaranteed.”

60 experts contributed to the HEC’s report from a range of English universities. While highly critical, it admitted that there was no “magic bullet” which would quickly repair the system.

It did, however, have a number of alternatives, and highlighted positive and negative outcomes.

These suggestions included lowering tuition fees from the current £9,000 to £6,000, which would reduce student debt but leave a £1.72 billion funding gab for universities, or replacing tuition fees with a graduate tax.

£9,000 tuition fees for English students were introduced by the coalition government in 2010, and took effect in 2012. The coalition claimed that the new funding system would make universities more “marketised”. The HEC condemned its ambitions for the higher education system as an “experiment” which has failed.

The HEC reported that English students will graduate with an average debt of £44,000 debt. It said poor collection of debts, and graduates struggling to repay, would lead to the student loan book growing from £46 billion in 2013 to £330 billion in 2044.

Labour added to the HEC’s criticism by saying that the coalition government has set universities on “the road to ruin”.

Liam Byrne, the shadow minister for Universities, Science and Skills, said: “Today’s system isn’t financially sustainable for graduates or universities alike, cuts Britain off from the best talent abroad and risks long-term damage. If it isn’t changed fast. It’s now as clear as day: we can’t go on like this, we need a new way forward.”

A spokesperson from the Department for Business, Innovation and Skills insisted that the government would look into the HEC’s findings, but defended the UK’s system: “The UK enjoys a world-renowned reputation for the quality of its universities, which we have protected and enhanced through our reforms.

“In fact, the OECD recently described the UK as one of the few countries that has developed a sustainable funding system for its universities.”

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