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Wednesday, August 10, 2005

The fear of debt

For those who argued that the Welsh Assembly's decision to not charge top-up fees was a subsidy for the middle classes this article in the Western Mail offers food for thought. A survey by NatWest Bank has found that the introduction of increased tuition fees in England could put off A-level students next year. They also estimate that Welsh students about to start their first term of university this autumn will expect to spend £30,241 during a three-year degree course, including tuition fees. On average they expect to graduate with debts totalling £13,950.

The key finding for us is that the introduction of increased tuition fees charged by universities in England could put off A-level students next year. The NatWest found 64% of sixth formers would be less inclined to go to university in 2006 when the new fee structure is introduced.

Things are still bad in Wales but at least we have done what we can, within the powers and the finance available to us, to mitigate the worst effects of Tony Blair's market economy in education.


This report http://news.bbc.co.uk/1/hi/education/4749575.stm by Mike Baker, the BBC’s Education Correspondent gives an objective, non political overview of the new fees system which every prospective student should read.

“The NatWest found 64% of sixth formers would be less inclined to go to university in 2006 when the new fee structure is introduced.” How many of the 64% actually know the workings of the new system? How many of them realise that from 2006, they won’t pay any fees whilst at university? How many of them realise that there is a 25 year cut off point with the loan, so any outstanding “debt” would be wiped off?

Politicians of all political persuasions need to be honest with students by explaining the system to them as it is and not playing politics with their futures by scaring them off with stories of mountains of debt. I find it very hard (as a student) to contemplate how any student could incur £30,000 worth of debt in 3 years, unless they live a life of luxury.

Mike Baker says “In short, the post-2006 system generally looks a better bet for students from low-income homes, perhaps marginally more expensive for those from the middle-income bracket, but much more expensive for those from higher income families.” – I certainly don’t fear being labelled a socialist when welcoming a Labour policy which has equality of opportunity and social justice at its very heart.

So, what have we learnt out of all this, that the Lib Dems wholeheartedly believe in a “as long as I’m ok, stuff the rest” approach to politics, whilst Plaid Nats are….well, we’re not sure where they are at the moment, they might decide before May 2007… the Conservatives, well, nothing new there really, as long as the aristocracy are all sitting nicely on their nest eggs’, they couldn’t give a damn about us students! That just leaves John “I’ve been kicked out of my own party” Marek and Peter “toys out of the pram” Law – two rather insignificant figures in Welsh Politics really…

I take it then you reject the evidence in the Rees Report that variable fees have a negligible effect on the aspirations of students from low-income backgrounds?

May I ask which part of the Education budget you would raid to pay for the "fee grant"?
Martyn, this survey and others demonstrate that it is not politicians who are scaring students it is the system itself and the reality of debt that comes from it. This is not just about fee debt of course but even if it were the fact is that the system as set up by Labour means that graduates in employment will pay a marginal income tax rate of 42% regardless of their income. That is more than the richest people in our society. That is unjustifiable.

Baywatcher, I was never convinced by that part of the Rees report as my contribution to the debate in the Assembly shows. Surveys such as this just underline how they may have missed the point on this issue. As for the budget, well I do not need to identify the source of funding for the fee grant. That is already in hand due to WAG's acceptance of our position. The chances are that it will be paid for from uncommitted revenue, currently held in reserve, and will not impact on other parts of the education budget.
Nice try Peter, from where do you think students get the information from on these things in the first place? Do you think they’ve read the Education act 2004 from cover to cover? I think not!

When they see politicians from parties that take an opportunist standpoint on these issues (mainly the Liberal Democrats on a UK level), giving misapprehensions about the fee system, scaremongering, telling them how much debt they’re likely to get into, no wonder 64% of them have second thoughts about going to university! Politically opportunist student union presidents don’t help either!

The governments in Westminster and in Cardiff need to urgently start an awareness campaign on the new fee regime as quickly as possible. This is the time of the year most Year 12 students are thinking about what they’re going to do after Year 13, so it’s vital that the new system is fully explained to them now, before they make a decision either way which would certainly impact on their future career prospects.
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Thanks for your reply.

It is clear that both sides in this debate can find surveys to support their position re: student debt. My own view is that, if you ask students whether they want to pay more, they will of course answer "no". But if you look at their behaviour when fees increase, it doesn't actually change significantly.

The minutiae of Assembly budgets is beyond my understanding but I am not convinced by your attempt to argue that the money is coming from a kitty put aside for a rainy day. As Assembly money, it could be spent elsewhere were it not for your insistence on no means-testing for the "fee grant". Your comment that WAG have "accepted your position" implies you hope they now accept responsibility as well. Dare I say your own party could do with accepting a bit more responsibility for education funding policy?

In my opinion, the LibDem position on higher education funding is unrealistic. This is because you refuse to deal realistically with the fact that numbers of students have increased exponentially since the 1980s. Labour accept that the modern HE sector needs a new funding system. The Tories argue that you should simply cut the numbers studying (and presumably put them on the dole) rather than increase funding levels.

The LibDems and Plaid, however, seem to be in denial about the situation, imagining that the public will happily stump up an extra 2 or 3 percent in income tax to pay for these extra students. Since tax-raising parties do not win elections, and even if they did, the Assembly lacks tax raising powers, I view your HE funding policy as a non-policy.

To which I would add that voters do not generally entrust a party with the responsibility of govt if it refuses to make its policy in a realistic context

Would be interested to hear your views.

Also, a question: if Labour won an overall majority at the next Assembly elections, could it decide that variable fees were no longer supported by the Assembly Government and start asking students to pay for them?
What has happened to Baddly Dubbed Boy? I can't seem to get on the site.
Anthropax, I cannot get on the Badly Dubbed Boy site either and do not know what has happened to him.

Martyn, students are not stupid, they can see propaganda for what it is. They can also talk to other students and establish the real position. They no more trust politicians than anybody else but they know the reality and your attempts to blame every political party but Labour for the current situation does not wash at all. Student debt is rising and as a result many are being put off from going to university. One study I quoted in the chamber indicated that this disproportionately affected one-parent families who tend to be poorer and more debt-averse than others.

The fact is that the Labour Government has created a market economy in education and it is students who are suffering as a result. No amount of accusations of opportunism will alter that.

Baywatcher, if you look at the figures you will see that Scotland, who have a much more generous system of fees (i.e. virtually none at all) consistently outrank other areas of the UK in the number of students applying for places there. It is the case that student behaviour is affected by fees and by cost, that after all is the purpose of Labour's variable fees - a market economy in education that works on the basis of demand and supply.

Money can always be spent elsewhere (witness the many times the Tories have spent the 70 million pound cost of the Assembly building). The opposition parties will however take responsibility for the cost of our policy because we can command a majority in the chamber and therefore the government need our support to get the budget through.

Labour have always stated that the cost of whatever comes from the Rees Commission will be met from reserves and that is how the position will undoubtedly work out.

The Liberal Democrats position on HE has always been workable because it is based on principle and properly costed. If we had won the GE then we would have abolished fees and paid for that by raising tax on those earning more than 100,000 a year.

As for Labour changing things if they win a majority in 2007 then yes they could. The deal we have struck is in force until 2009 but if they had a majority there would be little we could do about stopping them reneging on that.
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