Tuition fee myths need to be challenged
Through a mutual acquaintance, I recently heard someone I know outside the world of politics (yes I have ordinary friends!) had been bemoaning the "fact" that he was not going to be able to afford to pay £9,000 per year for his daughter (who is soon going to be 18) to go to university.
This person is pretty well educated and I suspect does regularly watch the news but the fact that the money is paid back over 30 years following graduation by the recipient of the degree, not the parents of the recipient seems to have completely passed him by. He's not the only one from what I can tell. Various vox pops on radio and TV in recent months that I have heard and seen suggest that this misconception is pretty widespread and infuriatingly often not corrected by interviewers or presenters.
That such a basic aspect of the new system is so widely misunderstood is a pretty damning indictment of how the policy has been communicated. Lib Dem and Conservative ministers and MPs need to accept some blame for this. But another big problem as far as I can tell is that the media narrative has focused on the most negative and politically contentious aspects of the scheme. This has led to headlines such as "UNIVERSITY FEES TREBLED" and "LIB DEMS IN DISARRAY OVER FEES". Both of those things were true to an extent but the Lib Dem woes on this topic were focused on so much around the time of the parliamentary vote as well as the protests that I honestly think the substance of the policy was not properly covered. Which given how much airtime the subject was supposedly given is frankly absurd.
For me, the 2 main aspects of the new system that seem to be regularly misunderstood are:
1) It will cost parents £30K+ up front to send their kids to university. This is palpably untrue. The graduate, not the parents pays the loan back at 9% of income above £21K. And they don't pay anything back after 30 years regardless of how much they have paid to that point. So quite a few, probably most will never pay back the entire loan anyway.
2) Graduates will be worse off under the new scheme just when they need disposable income the most, in their 20s making it harder to get a mortgage. This is completely wrong too. Compared to the previous system, graduates will be much better off in their earlier years when trying to build a deposit for a house etc. It is of course true that they will still be paying through their 30s and 40s too (assuming they earn over £21K) but that's the trade-off.
There are loads more (see FOOTNOTE) but they are the two that have most irritated me.
I suspect there will be some who accuse me of being a government patsy on this as I am a Lib Dem but the truth is I would be saying this no matter who was in government. I am always happy to debate the consequences and fairness of policies with anyone but in order to do this properly, the facts need to be clear.
And far too often in this debate they are inadvertently or in some cases I suspect deliberately distorted.
FOOTNOTE: The widely respected Martin Lewis of the Money Saving Expert website who himself is no fan of the changes is nevertheless appalled at the terrible reporting on the subject (I heard him bemoaning it on Jeremy Vine's Radio 2 show recently) and has taken it upon himself to produce a "20 Key Facts" page which goes into great detail and busts a number of myths about the new system. It's definitely worth a read if you have half an hour.
This post was first published on Dale & Co.
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8 comments:
All very well, Mark, but the root of the 'mythology', and the heart of the bad politics, is that many people find that level of debt anathema - especially when it comes from the state.
Frankly, any politician who can't get their head around that is in the wrong job.
"many people find that level of debt anathema"
They don't seem unhappy with the idea of incurring a vastly greater debt through agreeing to pay utterly silly money for a house.
I question whether would-be students who have shown themselves utterly unable to think through properly the misconceptions which Mark has highlighted are really up to a university education anyway - and in that situation there is no case for taxpayers subsidising university education for such people.
You ARE a government patsy. A naive one, but still a patsy.
First off, the interest being charged is a usurous inflation+3% rather than the much more modest base rate+1% under the old system. On top of this, the capital borrowed is much more. For most people paying this off at the maximum repayment of 9% of their income, they will not even cover the interest payments so the debt will increase over time rather than reduce. The effect of compound interest on these amounts is such that after 30 years, many people will owe about £250k or more!
Do you seriously believe that future governments will just write off what will amount to many billions of £ of debt owing to them? Given experience of the past year or so, is it not more likely that they will say such a write off is unaffordable?
People are not as naive as you. They do not want to take such huge risks. Why should they take it on trust that such debts will be written off? Why should they believe the same politicians that pledged not to increase fees, then trebled them? Parents don't want to saddle the next generation with unaffordable debt, particuarly when large amounts of unaffordable debt was what got us into the situation we are in today!
It is the myth that the hike in tuition fee is needed to pay for the deficit that needs to be challenged! Over the next three years, the effect of this scheme is to increase the deficit because the universities need to be paid but there will be no income to pay it with!
Get real, Mark!
Paying £50,000 + a low rate of interest over 30 years after graduation is a drop in the ocean when compared to the cost of housing, bills, the amount paid in income tax etc.
This is a dilemma though. It is completely reasonable for bodies like the NUS to vocally oppose the new system. But if in doing so they put off the young people from becoming going to Uni, they become part of the problem too. Yet "no-one should be put off by the new system, but it's a bad one" doesn't have the same political oomph. This was equally true when the Lib Dems were opposing fee rises from the luxury of opposition.
I am doubtful how much of an effect better communication would have. The sums talked about are a lot of money, even though it's only paid after you graduate. Personally, I think it may have put me off or, at the very least, made me choose a different subject (say accountancy over archaeology).
Of course, I had university educated parents, and so could see the benefit of continuing my studies. The big impact will be on potential first generation attendees, which is why it is such a shame that the Coalition has cut Aim Higher (http://bit.ly/p4mZOG). They did a very good job of targeting potential first generation students with a balanced view that would have counteracted some of the reporting. With them gone, who will do the job now?
Whilst I agree with some of your comments on the reporting, the Government (and Lib Dems within for not stopping it) have no one to blame but themselves for getting rid of a body that could have helped counter the dominant narrative over the long term.
Perhaps 'graduate tax' would have been a better description than loan? Trying to think of an actual better but accurate term.
You are right though and if we consider that we watch BBC news for information, and we read newspapers for the same (albeit biased towards the proprietors politics) then we might deem them to have seriously failed their viewers and readership!
Nevertheless, tuition fees at this level do actually stink for a party who should have intergenerational fairness at its core!
It's not just myths that need to be challenged. Older generations might bleat about the necessity for current students to pay the cost of their university tuition but I haven't noticed them offering to pay retrospectively towards the degrees from which they so richly benefited. Curiously, neither do they seem to see any moral imperative currently to pay for their care home fees.
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