Ed Miliband's tuition fees policy is equitable, good for Britain and good for the taxpayer

 

Ed Miliband today stood at the Leeds College of Music to deliver a speech which, it is safe to say, has been hotly anticipated – especially by young people and those who could be first time voters.

A lot has been trailed about what could be coming today, but it would appear that despite the right-wing media’s attempts to smear Ed, a promise has been given which can be delivered. More importantly, this would deliver a genuine saving for tax payers across the country from the get go.

So what is this promise?

A £3k cut in tuition fees, you might think, would cost you the tax payer more. However, nothing could be further from the truth. Fees were introduced in January 2004, so just over 11 years ago, with the idea that as a graduate’s earnings went up they would be more and more able to pay off the money that they had in effect borrowed from the government.

As the below graph shows there is a direct correlation between graduate lifetime earnings, the level at which tuition fees are set and the amount which is then paid back to the government through a person’s pay. Indeed, the higher fees go, the more unlikely it is a graduate will pay back the loan in full.

I, for one, am not surprised at this and I graduated in 2012. Since then my pay may have varied a great deal but one thing I am certain of is that, at least in my current job where I pay on average £1 (yes £1!) per month towards my fees, I will never pay back the loan in full under the current system.

As @EvidenceUK so rightly points out, the potential for paying back in full is dependent almost entirely on the level at which fees are set and the potential earnings of a graduate in their lifetime. This may seem self evident but the fact remains, with wages being squashed it is unlikely that anyone graduating within the last three years and the next two (give or take) – should the current system remain – will repay their fees in full.

So what does this mean on the ground? This will entrench the need for educational institutions to spend more and more time on seeking funding from elsewhere, in effect what we’re seeing with the £9k tuition fee levels is enforced “Business-ification” of what were once considered quality educational establishments.

What Ed Miliband is offering is a rebuttal of this, it is education for all which is quality at the point of use and which most importantly will allow the government to have the money returned to them. Yes, of course, there will be many out there who want the Labour Party to go further even so far as to abolish tuition fees completely.

This is a laudable aim, but what Ed is offering is a starting point from which to begin real change both in higher education and elsewhere. A comparable example is that of the railways; many of us want them returned entirely to the public sector but until such a point as the Labour Party are in majority government this cannot be achieved as legislation is required.

Ed has offered a promise which is deliverable under a Labour government, a promise which can be relied upon and more to the point is equitable. Reducing fees from £9k to £6k would mean an average reduction in debt of around £9k per student; alongside this it will cut the burden on taxpayers in the order of £40bn by 2030.

This is not an idle promise, similar to that signed by Nick Clegg ahead of May 2010, these are fully funded allowing the full protection of our universities so they can concentrate on what they do best – offering the best possible education for the next generation. As an aspiring graduate student myself and also someone paying back laughably small amounts of my tuition fees, I for one can sign up to this straight away.

Ed’s HE policy is equitable, good for Britain as a whole, good for the taxpayer and most importantly will mean Britain retains it’s hard fought for reputation for excellence in Higher Education. This policy is reason enough for first time voters and young people to vote Labour.

Owain Gardner is a graduate of York University and co-editor of Labour Left’s Red Book

114 Responses to “Ed Miliband’s tuition fee pledge: another reason for young people to vote Labour”

1. 

   damon

   February 28, 2015

   I thought people not paying off their loan after thirty years was just factored in to the equation and it didn’t matter if they didn’t. Because the people paying higher income taxes would offset the losses.
   It’s just a political football as far as I can see, and I stopped listening to the shrill students and their doom and gloom predictions when it became more widely known that the paying back of loans was going to be quite gentle on post graduate students.

2. 

   Lawrence Gruijters

   February 28, 2015

   Anybody who does not understand that dropping the fees is purely a tax break for rich graduates does not deserve a place at university. The amount paid is based on earnings and it us a perfect example of a progressive tax. All Ed has done is give the rich lawyer a tax break paid by the butcher’s son.

3. 

   Leon Wolfeson

   February 28, 2015

   Quite.

   (As I’ve said before, there are arguments for charging *something*, but we’re talking under 1k per year, and tied to CPI+0%….)

4. 

   Leon Wolfeson

   February 28, 2015

   There is absolutely no mention of replacement funds, though. Direct grants are dead and gone, basically…this sounds and smells like a cut to University funding.

5. 

   Leon Wolfeson

   February 28, 2015

   It matters, it matters a lot. Basically, it needs to be paid by the government.

   The cost of the “new system” is dramatically higher than previous systems, because wages have risen so slowly – it’s a massive (and inflationary) time bomb of debt for the government.

   And what the heck are you talking about – postgrad students don’t get student loans at all! Moreover, “gentle” to you is “you will take home less across your working life”. *claps*

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