stating whether they favour or oppose burdening typical undergraduates with over £40,000 of debt, and the withdrawal of public funding for university teaching.

Except that the tuition fees are paid out of public funds, with the cost to public funds then recovered via the student loans company and PAYE – i.e via the tax system. It’s not so much a withdrawal of public funding as a rearrangement of where the tax income to fund the public funding comes from – specifically, more from those graduates earning over £30k inflation-adjusted, lots more from those earning over £40k inflation-adjusted, and less from everyone else.

Looking at figures 3 and 4 in this UCAS data release, it looks like applicants are fully aware of this:
http://www.ucas.ac.uk/about_us/media_enquiries/media_releases/2012/300112b – note that the application rate from the most disadvantaged areas has barely changed, while the application rate from most advantaged areas has (from a much higher starting point) dropped sharply. (i.e. those applicants who are more likely to be from rich families and expect a high salary post-graduation, and therefore those on the losing end of the changes, have tried to enter early where possible)
The same effect can be seen in the 2004-7 parts of the same graphs.

(Yes, absolute numbers are down by more than that, but then absolute numbers of 18-year olds are down by a lot too on last year – and will keep decreasing, unless there’s a substantial rise in teenage immigration – for the next 10 years, so application rate is clearly the right metric)

It is a removal of public funding as only the cohort who attend university will repay the debt. It is only ‘PAYE’ for the people who go through the system. So I guess you can argue that the initial borrowing will be financed out of general taxation, but its repayments will not. This is most definitely a privatisation of undergraduate teaching.

So I guess you can argue that the initial borrowing will be financed out of general taxation, but its repayments will not.
Well, except that anyone earning less than an average £30k per year [1] will be making smaller repayments over their lifetime than under the current system, and even those on £40k per year are unlikely to pay it all off [2]. So the debt that is written off after 30 years (or, more accurately, the shortfall between maximum theoretical graduate taxation receipts and actual graduate taxation receipts) will still need to be covered from general taxation. This is going to be a fairly large shortfall in the long run (especially since a university charging £9k fees is actually getting more money per student from the government than it did under the previous model) so general taxation will still have a role to play.

The tax contribution of rich non-graduates to higher education will be slightly reduced and the tax contribution of rich graduates to higher education will be somewhat increased. The contribution of poor and middle-income people – graduate or otherwise – to higher education will also be reduced. In other words, the overall tax costs of HE will fall more on highly-paid graduates. (But they’re highly paid, and a few percent extra effective income tax rate seems only fair)

Now, sure, rich non-graduates do get away with it a bit, in that they pay for HE less than rich graduates (but more, because of their higher base tax rate, than poor or middle-income people, graduate or otherwise), but that’s marginal, and the way things are going most rich people in the future will be graduates anyway.

This is most definitely a privatisation of undergraduate teaching.

Well, given that undergraduate teaching has always been delivered by private sector non-profits (i.e. universities), I’m not entirely sure a change in the way the government collects the money it uses to pay them to deliver the teaching can really be described as “privatisation”. (Any more than – say – a rebalancing of taxation between income tax and VAT could be described as “a privatisation of Capita PLC”)

[1] The median wage for any age, region or gender is less than £30k, so this is most people and a significant minority of graduates.
[2] http://www.moneysavingexpert.com/students/student-finance-calculator reckons a £40k starting salary would be sufficient (just) for full repayment of a £40k “debt” in the 30 year window, if you then had above-inflation pay rises every year. That does not describe the experience of most graduates. (Indeed, that’s around twice the average starting graduate salary!)

I hate to say it as I think it threatens my limited left wing credentials, but I’m not actually that opposed to the tuition fee rises. I would naturally prefer free higher education for all, but I don’t actually see that much wrong with asking some people to pay a little bit more back when they are earning more. I would still attend university with the fee rise as long as, and this is the important part, the rules still apply that people will not be forced to pay it back if they cannot afford to do so, and the ‘loan’ part is not for profit. It’s basically a graduate tax that you can eventually finish paying.

If they change it to turn it into some horrible private loans system where people eventually come knocking your door to reposess your things due to not keeping up with loan payments, then it’s time to get angry. I wouldn’t be surprised if this is the first step towards that, but as it stands, I would pay those fees and not feel hard done by.

What bothers me is that cuts are being made to University courses, the 9k a year people are asked to borrow/pay does not quite cover the full extent of the cuts on some courses, particularly social sciences. This means Universities are being forced to cut back on such courses, quality will decline and less people will have access to these courses.

This doesn’t surprise me, as social sciences make people look at how society functions and I suspect the government doesn’t want/value people criticising their idiotic, counter productive policies.

Having a critique on the vice chancellors and their policies is only a good thing, but I’d prefer to fight against these course cuts than the fees, which I don’t believe as they stand now have an overly negative impact.

Why on earth should a university VC – as head of a higher educational institution – refuse to put on record where they stand on these vital issues?

No. The question is why should a university VC agree to be bullied by a bunch of spotty teen Trots on an issue that is none of their damned business.

The job of the VC is to run their university. The job of students is to learn. Learn enough so that, with luck, they will one day become useful members of society with opinions worth listening to.

The correct response should be for the VCs to expel any student demanding any such thing. They clearly do not understand the point or purpose of education.

>Why on earth should a university VC – as head of a higher educational institution – refuse to put on record where they stand on these vital issues?

Probably because they don’t want to waste time on playground politics by idiots with megaphones.

>And yet, almost all Vice-Chancellors (with laudable exceptions) have thus far managed to avoid doing so. VCs have found time, mind you, to grant themselves massive pay rises, even as they equivocate over fundamental reforms to their institutions.

The report linked from that paragraph would be the “income spent on their highest-paid staff soared from 1.8 per cent in 2003-04 to 3.8 per cent last year, the report claims” one?

The one where you compared staff paid more than £100k in 2010 with staff paid more than £100k in 2003 without adjusting for inflation to generate a dramatic headline figure?

The one that was shredded by commentors at the THE website last month:
http://www.timeshighereducation.co.uk/story.asp?storycode=419676

And you think you deserve a hearing why exactly?

I’ll leave the reduced cost to students of paying for education to others.

Students today. Sigh .

*Notes that the Report was by the NCAFC at anticuts.com, and that Richard’s group – Southampton Students …, may not be affiliated to that particular campaign.

My point stands, though,

Matt, I don’t think you’re trolling (unlike 5.), so can I ask:

1) Why the hostility towards students trying to be politically engaged? It seems odd to assume that either students don’t deserve a voice, or that what they say is necessarily juvenile. And trust me when I say trying to promote political awareness on campuses is anything but a barrel of laughs.

2) On VCs – say we leave pay out of it altogether – why, still, is it unreasonable for staff and students to ask for the head’s of their universities to go on record with their views on significant changes to the university system?

I’m tempted to say ‘citizens today, sigh’.

Albert and Cim,

I think you make fair points. It’s clearly not as simple (as Cim recognises) as a conventional privatisation where costs are shifted fully on to users. But there are relevant differences between students attending University for free, and then paying a tax rate of x(+y) (where x is a base tax rate and y is the share of tax needed to fund higher education) and students attending University for free and then graduating with personal debts of £40,000+.

The first is simply psychological. I just think that debts of £40,000+ will be a barrier to access. We’ll have to wait and see evidence-wise on that. Secondly it is just is worse to graduate with a paper debt of £40k, rather than graduate with no debts and a tax burden of x(+y). The individual liability is different, which matters in terms of psychology (and choices about careers) and it also matters practically when it comes to questions of banal things like applying for mortgages. As you say too, it also depends a lot on what happens to the student loan book. I’d feel safer as a taxpayer rather than an indebted individual relying on a specific government program.

Further, in the tax model, the costs of higher education are borne more significantly more progressively (the tax system just is more income-responsive than the rather rigid loan repayment system) and other actors such as businesses contribute too (who surely benefit from HE) as well as everyone who has already graduated (including most of the super-wealthy). That’s where the question of generational fairness comes from – if we’re accepting that individuals who benefit from university should make an additional contribution to funding HE, then this should apply to current, and not just future graduates. And given that the justification for paying an HE premium is that graduates tend to earn more over a lifetime, far better to tax the current generation of graduates on the ACTUAL earnings, than to tax the next generation on HYPOTHETICAL earning (not least given that the youth labour market is anything but peachy right now).

Finally, it might be best to describe the new fees system as a ‘user fee’ system (forgive us for using the more effective ‘privatisation’ moniker). But this is worrying too, or at least leftists should be concerned about the proliferation of principles which say that “individuals should only pay for those public services which they use” and “individuals should pay for public services in proportion to the value they receive from them”. That’s what were accepting regarding HE. Now apply those principles to examples such as healthcare or fire services to see how weird that gets. Writ large, if voters ever DO come to accept that we should only pay for public services when we use them, and depending on how much we benefit from them, then we on the left might as well pack up and go home anyway. Even if you don’t give a toss about HE, you should be concerned about this.

>Richard

Thanks for the reply. No I’m not trolling, but it would be fair to say that I’m out of patience.

>1) Why the hostility towards students trying to be politically engaged? It seems odd to assume that either students don’t deserve a voice, or that what they say is necessarily juvenile. And trust me when I say trying to promote political awareness
on campuses is anything but a barrel of laughs.

I’m not hostile to students being politically engaged. I followed the anticuts actions in some detail for some time and I was not very impressed by the case being argued, or by the way it ended up being manipulated by splinter groups. It lost me for three reasons – 1 when I read into how some things were set up (eg Camden Town Hall Conference etc) and organised, 2 when it turned to violence etc 3 because I’m not convinced by the case.

The NCAFC ‘report’ is transparently a political document, chasing headlines by inventing a case which doesn’t necessarily exist. If they lead their press releases with a fabricated claim, then it tells me something.

I’d have hoped that that document would now be buried in an unmarked grave.

Has the proportion of budget going to salaries of senior management increased significantly at all?

For 2010 would be spending on employees with a salary of higher than (checks) around £125k (inflation) or perhaps ~£145k (wages), rather than the £100k used. That’s a hell of a difference to ignore.

Sorry for not realising that you do not seem to be anticuts.com aligned.

>2) On VCs – say we leave pay out of it altogether – why, still, is it unreasonable for staff and students to ask for the head’s of their universities to go on record with their views on significant changes to the university system?

I’d say that request is reasonable.

Though I’m

I suspect not, and
I’m tempted to say ‘citizens today, sigh’.

>Though I’m

>I suspect not, and
>I’m tempted to say ‘citizens today, sigh’.

Pah. Sorry.

Richard: thanks for the reply.
We’ll have to wait and see evidence-wise on that.

The UCAS charts suggest that the psychology of it is not the simplistic “poor students will be put off by the extra debt” claim, though. Which makes sense: if repayment is only on earnings above £21k, and no-one in your immediate family earns that much anyway, then going to University is a very low risk plan … whereas if your immediately family is on £40k-plus salaries, then you can be pretty sure you’ll have to repay most or all of it eventually, and have to actually take that into account (by, for example, not deferring entry)

The change from £1000 up-front to £3000 deferred from 2004-7 had a similar effect: a big spike up just before the change, and a drop down after, and then a return to trend – with the spike much more obvious in the high-participation middle-classes who were getting the worse end of the deal.

and it also matters practically when it comes to questions of banal things like applying for mortgages

Not really – I’ve never seen a mortgage deal that even asked about it. Well, except in so far as the extra repayments slightly reduce your effective income, of course, but the monthly repayments are lower under the new model than the old, so it should make it marginally easier for graduates in practice.

I’d feel safer as a taxpayer rather than an indebted individual relying on a specific government program.

Well, maybe. Tax rates can be changed unilaterally at any time, though. Student Loan terms cannot. (Given how much the government messes around with HE funding options, there’s a lot to be said for having your payments be on a model where they don’t)

the tax system just is more income-responsive than the rather rigid loan repayment system

Is it? Loan repayment is at 9% of income over £21k, and in the new model the threshold is automatically adjusted for inflation and changes in median wage. That seems more responsive than the rarely-adjusted income tax bands, and the not-at-all income-responsive indirect taxes like VAT.

Generational fairness I do agree on … sort of. The changes in funding (going back to the rolling reduction in grant size even before tuition fees came in) have also been accompanied by a massive increase in the size of the HE sector. If the question is between “a small number of people go for free” or “a large number of people go in exchange for higher future personal taxes” then I think the second option is the better of the two. Academically-inclined non-graduates could equally think it “unfair” that young people today have opportunities to go to university that simply weren’t available to them.

Generational fairness also makes it rather difficult to back out again, unfortunately. By 2012, a lot of the people who graduated in the late 90s and early 00s, who had to pay up-front tuition fees, will have paid back their student loans in full. So if you make them pay the all-graduates tax, they essentially have to pay twice. The late 00s graduates have it even worse. (And you don’t have an easy way to write-off their student loans early, either, unless you spend a lot of money buying back the loans from private investors so you can write them off). On the other hand, levying a tax only on pre-1998 graduates is an administrative mess because there’s no central record of who they are.

But this is worrying too, [...] That’s what were accepting regarding HE.

Now that I do agree with, certainly, and I would much prefer a model which funded HE entirely from general taxation – it would be much simpler. However, if there is to be a requirement for graduates to pay a portion of the costs, I think the new model which places the majority of that portion on the richest graduates is going to be a better one than the 2006-2011 model which placed a greater burden on the lower-income graduates, or the 1998-2005 model which required up-front payment of a not insignificant £1000/year.

Though, “public transport” has long been on the same model – subsidised to a greater or lesser extent through general and local taxation, but also pay per use except for particular demographics. Is “higher education” more like emergency services, or public transport, in terms of its necessity?

Given that the government budget is finite (larger than the current lot seem to be pretending it is with their austerity drive, but still finite) – I can think of lots of things which should be provided from general taxation for free use for the general benefit of the population for which the case for providing them to me seems stronger than the case for providing completely free higher education. There are plenty of ways to raise additional government revenue for HE from general taxation by increasing tax levels … but if you raised that additional revenue I think there are other things for which there’s a much better case to fund.

On the political side of things:
On VCs – say we leave pay out of it altogether – why, still, is it unreasonable for staff and students to ask for the head’s of their universities to go on record with their views on significant changes to the university system?

Because they may feel they can get more done off the record? Or perhaps they don’t want to be misinterpreted?

From the “Where do you stand” post: “There is another camp of VCs, those that say one thing, and do another.”

It’s not at all unreasonable for VCs to oppose the introduction of higher fees, but nevertheless charge full fees when they’re introduced. Once they have been introduced, charging those fees is the only way to retain their funding, regardless of whether they personally think it’s a good idea. (And the repayment model means there’s virtually no difference to the graduate between £6k and £9k fees, so you might as well charge £9k fees because everybody else will [1])

I remember questioning a VC when the plans for £3k tuition fees were first being discussed, and his opinion was that they were basically pointless for universities and bad for students – £1k they got already, another £1k or so would cover reduced central funding, and quite a bit of the rest would have to go on improving bursaries. On the other hand, you couldn’t not charge £3k because then you’d actually be losing funding.

[1] I still can’t decide whether DBIS is incredibly incompetent and didn’t realise this, or intentionally kept that obvious bit of economics hidden from MPs so that they’d pass the bill and sneak in higher net HE funding. It doesn’t say much for the MPs either way.

8. Richard

1) Why the hostility towards students trying to be politically engaged? It seems odd to assume that either students don’t deserve a voice, or that what they say is necessarily juvenile. And trust me when I say trying to promote political awareness on campuses is anything but a barrel of laughs.

No students do not deserve a voice in how their university is run. The hostility is due to the stupid nature of the political involvement in this case. If students engage in sensible and grown politics, they will get a sensible and grown up response.

2) On VCs – say we leave pay out of it altogether – why, still, is it unreasonable for staff and students to ask for the head’s of their universities to go on record with their views on significant changes to the university system?

Because it is none of their damn business and that is not what they are trying to achieve. The aim of this campaign is to bully and intimidate VCs into silence. That is not acceptable and should be resisted.