I am not a fan of the current system of student loans. I hold the perhaps unusual view that we need to have significantly fewer people going to university – a view almost non-existent in mainstream political debate, with both parties and the majority of people believing a mass university system is beneficial.
Unfortunately for me this debate isn’t currently politically available. The aims of the UK higher education system as it stands are to encourage a large number of people to apply to university, especially those from low income backgrounds, while also giving students the means to do.
In the recent furore over tuition fees, what we should be asking is whether our current system achieves this or at least comes close. Critics of the system have two main concerns. Firstly there are those, such as Jeremy Corbyn, who believe university education should be free of charge on account of it being a universal right. Secondly, the system is criticised for not functioning well, leading to large amounts of student debt being left unpaid and ultimately written off by the government.
For its stated aims… the current system doesn’t do so badly at achieving its goals
For its stated aims, which as I say I disagree with anyway, the current system doesn’t do so badly at achieving its goals. In the latest IFS report (responsible for reigniting the debate) they predicted that 31% of total student debt would have to be written off. To put this into perspective, analysis by The Times calculated that a graduate with a £51,600 student debt who gains a job with a £45,000 starting salary will only pay off their debt after 29 years.
This is based on the rather hopeful assumption that their earnings will grow at 2% above inflation, and that they will be employed without break. When added to the extremely optimistic starting salary of £45,000 which even graduates entering the city would struggle to achieve, it is clear that the vast majority of students will fail to pay off their debt in full.
Leftists have time after time been… advocating a policy that will benefit mainly middle and higher income people
The loans system would therefore be better thought of as a graduate tax for the vast majority of students, lasting 30 years after graduation. The fact that a large percentage of this debt will be ‘written off’ by taxpayers is a sign of the system working as it was intended – not evidence of failure.
Higher earning graduates will effectively subside those who earn less by paying back more into the government coffers. While the IFS report does highlight that freezing the income threshold at £21,000 after which this ‘tax’ is levied hits poorer and middle earning graduates the hardest, the fact remains that they will still pay significantly less than those who can afford to pay more. Very progressive, surely!
Dealing with the first criticism, that university education should be totally free, is therefore easier to refute. By arguing this case, leftists have time after time been criticised for advocating a policy that will benefit mainly middle and higher income people, to the detriment of the general taxpayer.
More less well off children are going to university than previously
It is a fact that mainly middle class people go to university. It is also a fact in the current system that richer graduates will pay considerably more than poorer graduates. Cancelling this out will mean that rich graduates will gain significantly, while the general taxpayer, who probably won’t have gone to university, will be paying for this.
If this isn’t convincing enough then look at the facts. Due to the lighter financial load on the taxpayer we can afford to put more people through university and now have record numbers. In 1980 68,000 people started university. This autumn it will be more than 500,000. More less well off children are going to university than previously.
Lastly with up to £8,200 given as maintenance expenses for those living outside London, those who attend university can live a reasonable life. Although I believe the system as a whole is moving in the wrong direction, it is broadly achieving its aims. Moving to free tuition would be a large boon to those who go on to earn hundreds of thousands later in life, at the expense of all of us. It is in short, a system for the many, not the few.