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”
Guest
You have no idea how student loans work, check.
And yes, well done, you are ignoring the effects of graduates and focusing on them directly. Ignoring the businesses. The Germans import large numbers of graduates, in reality, but you’re also of course for closed borders so you wouldn’t allow it here. You want to compound the austerity.
What’s going to require extension of degrees is your beloved Gove’s anti-educational wrecking of schools, so people are turning up at University without the basics.
Guest
Again, that’s entirely down to austerity. As you try and make it so most people can ONLY do jobs like taking chips. That you argue that economic cuts mean that education should be cut, Britain downskilled, to make it permanent.
Guest
So, you lie about the tax rate, check. Moreover, that’s progressive and the withdrawal rate is under 100%.
The loan is for 40 years, not a “few years”. What pays the country less is the burden of the loan, which is more expensive – well over 95% of graduates will earn less over theirt working lifespans too. You are arguing that people should not to University, that the country as a whole should suffer because you’ve made it so people personally do.
We’re looking at deflation, and your answer is to slash spending. Which is idiotic. And there are tiny fees now in some German areas for specific aims, OHNOES!
Meanwhile, Germany needs to import vast amounts of graduates their system does not produce.
Guest
Right, to you we have too many high-level jobs, as you decry allowing even the possibility of recovering rom your beloved ausrerity. You’d only be happy with a 95% rate+ at current graudate levels, I hear you!
You argue we need to slash funding still further, deflate harder. You are bringing up nonsense as usual in your bitter hatred of allowing the peons an education, as you ignore the long-term falling % of graduates, and the massive dive in rates under the coalition.
Guest
Right, hence your hatred for them.
As you make up nonsense about Germany, lying about their tax rate and claiming that tax is 100% for University. You’d rather eliminate most University places and charge the rich a little less, completely unlike the very expensive current system.
Germany needs, once more, to import large numbers of graduates.
As you whine that the economy is too good, and that you might allow all of one or two Universities in the UK, in the middle of the slums for the peons. With the government rice ration, no doubt, always being cut.