{"id":39841,"date":"2017-07-23T14:39:06","date_gmt":"2017-07-23T21:39:06","guid":{"rendered":"http:\/\/world.edu\/?p=39841"},"modified":"2017-07-23T14:39:06","modified_gmt":"2017-07-23T21:39:06","slug":"unfair-student-loan-system-must-reviewed","status":"publish","type":"post","link":"https:\/\/world.edu\/unfair-student-loan-system-must-reviewed\/","title":{"rendered":"\u2018Unfair\u2019 student loan system must be reviewed"},"content":{"rendered":"

\"\"
\nFor an 18-year-old with limited experience of the earnings and tax system, it\u2019s not easy to foresee the long-term effects of borrowing the average \u00a344,000 cost of a degree.<\/p>\n

So a new\u00a0report<\/a>\u00a0by London Economics, commissioned by my union, the University and College Union, should be required reading for all Year 13 and college students and their families as well as for anyone else considering applying to university or with a stake in higher education policy.<\/p>\n

The report sets out in black and white the exact scale of the enormous tax burden that will hit today\u2019s undergraduates through their 30s and well into their 40s as a result of the current university funding system in England.<\/p>\n

The \u00a39,000 annual tuition fees introduced in 2012 were billed as a progressive income-contingent loan system. The theory went that degree study is free at the point of use and graduates will only pay back the debt once they benefit from higher earnings, so why shouldn\u2019t they contribute in later life?<\/p>\n

But that progressive claim began to crumble in the face of an inherent flaw and various tweaks that proved to have dire consequences. Ministers promised that fees above \u00a36,000 would be the exception, despite everyone else saying that \u00a39,000 would be the norm \u2013 which of course\u00a0it was<\/a>.<\/p>\n

Then there were those tweaks: maintenance grants for those from the poorest households were replaced by maintenance loans taking the poorest students\u2019 debts up to \u00a357,000; the repayment threshold, which was supposed to rise in line with average earnings, was frozen; and interest rates on loans will go up to 6.1 per cent from September.<\/p>\n

All this means that the system we have leaves the poorest students with the biggest debts, all students must now pay back the debt earlier and they\u2019ll be building up a whopping level of interest on that debt, even while studying.<\/p>\n

The London Economics report truly puts the lie of progressivity to bed, demonstrating that lower and mid-earning graduates are the biggest losers under the current system. The reality is that graduate earnings are hugely variable and those at the lower and middle end of the earnings spectrum will pay more and for longer than their higher-earning contemporaries.<\/p>\n

In a nutshell, the more you earn, the quicker you pay the debt off, so the less interest you accrue and the less you pay overall. For example, men in social work, teaching and nursing with median earnings (or slightly below) face a greater loan repayment burden (3.2 per cent to 3.6 per cent) over their working lives than men in financial or legal professions (2 to 2.1 per cent).<\/p>\n

The incentive to choose a career in the beleaguered public sector, already struggling to recruit thanks to pay restraints and heavy workloads, will be even lower than it is now.<\/p>\n

University funding has been back in the limelight thanks to Labour\u2019s manifesto pledges to abolish tuition fees, to which many attributed the party\u2019s success at the polls. In reality, however, polling by Ipsos Mori since the election found a big swing to Labour among younger voters, but found a\u00a0bigger swing in the 25-34 age group<\/a>\u00a0than in the 18-24s (the former already feeling the pinch from loan repayments).<\/p>\n

Meanwhile the Conservatives are in turmoil with senior party figures\u00a0admitting<\/a>\u00a0that student fees may need to be reviewed. And then in weighed the original architect of tuition fees, Andrew Adonis, criticising the rising fees while highlighting examples of vice-chancellor pay packets that dwarf the prime minister\u2019s.<\/p>\n

Of course, he is right to highlight the\u00a0embarrassing largesse<\/a>\u00a0of those at the top, and that is a campaign my union has pursued for several years, calling for greater transparency around decision-making and a national public register of vice-chancellors\u2019 pay and perks. But Lord Adonis\u2019s interjection is only helpful to a point \u2013 excessive pay at the top is a side-show compared to the real mess of university funding.<\/p>\n

Being generous, we can only say that politicians defending the system as progressive cannot understand it. Those with the most to lose are unlikely to appreciate that they are walking into a future tax crisis. The middle-aged squeeze on incomes is a largely unforeseen consequence of the current system and that isn\u2019t fair to the young.<\/p>\n

Author Bio: <\/strong>Sally Hunt is general secretary of the University and College Union.<\/strong><\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

For an 18-year-old with limited experience of the earnings and tax system, it\u2019s not easy to foresee the long-term effects of borrowing the average \u00a344,000 cost of a degree. So a new\u00a0report\u00a0by London Economics, commissioned by my union, the University and College Union, should be required reading for all Year 13 and college students and […]\n… learn more→<\/a><\/p>","protected":false},"author":33,"featured_media":39842,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[29],"tags":[92269],"coauthors":[11733],"class_list":["post-39841","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-higher-education","tag-student-loan-schemes"],"acf":[],"yoast_head":"\n\u2018Unfair\u2019 student loan system must be reviewed - World leading higher education information and services<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/world.edu\/unfair-student-loan-system-must-reviewed\/\" class=\"yoast-seo-meta-tag\" \/>\n<meta property=\"og:locale\" content=\"en_US\" class=\"yoast-seo-meta-tag\" \/>\n<meta property=\"og:type\" content=\"article\" class=\"yoast-seo-meta-tag\" \/>\n<meta property=\"og:title\" content=\"\u2018Unfair\u2019 student loan system must be reviewed - World leading higher education information and services\" class=\"yoast-seo-meta-tag\" \/>\n<meta property=\"og:description\" content=\"For an 18-year-old with limited experience of the earnings and tax system, it\u2019s not easy to foresee the long-term effects of borrowing the average \u00a344,000 cost of a degree. 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