Three things:

1. On what grounds do you say that £9k is ‘above the free Market price’? Seems like a weird statement. If it is, then prices will come down pretty quickly (by which I mean a couple of years, as all the Market participants need a bit of time to experiment).

2. Are you sure that a policy announcement by the leader of a party who aren’t likely to get their hands on power for at least 4yrs is likely to depress applications next year? Seems unlikely to me. And is it a good thing if it does? The whole debate has deeply ill-informed, with many of the most vociferous opponents likely to be those that stand to benefit, and I don’t think that further bluster and confusion are a good thing.

3. Tied to this final point, is only a doubling in fees likely to change the terms of the debate. NUS don’t seem to think so (not that they necessarily represent anyone other than future labour cabinet ministers), and I’m inclined to agree.

Appreciate that I’m terribly partial, as I think a genuine Market in fees would be a good thing (we should be deterring people from taking some of the less useful degrees) – we’d then provide subsidy to those from less well off backgrounds through grants post price – but I really don’t see this as an example of genius. Simply more opportunism. Still, it’s meant that the day hasn’t started with Balls briefing against the other Ed, so a qualified success in that respect!

Shorter OP: They’re proposing the same as me, which is genius.

The OP mentions medicine. Along with other science and engineering courses this very important area of study costs a lot more than the suggested cap. However doctors are far more likely to be able to repay loans even at the current rate. Is it assumed that there will be a cross-subsidy from less expensive courses that covers the more costly ones? How does this bear on overall costs without a reduction of academic quality?

The OP is clear about the politics but I’d like to know more about how such a policy would affect universities and ensure the future of high quality HE in Britain.

I don’t agree, the thing that consistently irritates me about the Labour Party is their willingness to compromise. Exactly who is going to benefit from tuition fees being capped at £6,000 instead of £9,000?

I believe education should be available to all, should this policy be implemented most of us will continue to be in the position we’re in now, which is unable to attend/send our children to university without incurring an unfeasibly large amount debt.

The only people who will benefit from this are a slightly higher proportion of the middle classes and we all pay income tax. So either make tuition fees affordable to all, or don’t, but yet again I’m seeing a policy that costs us all but benefits only a few.

Nonsense. Socially progressive while not reducing the amount that poorer graduates will pay back while reducing the amount rich graduates will pay back? Absolute nonsense. Hopefully my counter article to this well be published by the editors here.

Voters may ask questions about Labour’s economic competence and its ability to make the financing of the policy add up and whether a higher bank tax is what they want. But they won’t ask questions about the £6k policy itself. To most people, it is nothing more than common sense.

In other words: Labour would have doubled the maximum ‘cap’ if they’d won after the last election. I’m not sure where that leaves the proposals to introduce a graduate tax (probably dead and buried, no matter what the NUS think). It also doesn’t mean that Milliband has rejected variable fees, if only because most universities will probably charge the maximum six grand.

In short: fair play to EdM, but all he’s doing is haggling over the cost.

One question: The Lib Dems don’t have the best record on fees by any means, but Labour broke a manifesto promise in 2001 not to introduce fees, broke a manifesto promise in 2005 not to increase fees and then in 2010 went into the election committed to removing the cap on fees completely. How then could anyone trust Milliband’s promise, especially given that a few months ago he was saying that Labour policy was to have a graduate tax?

@illegal

1. For all the talk, we don’t yet have a free Market in HE. Far far from it.

2. I don’t expect the effect to be big.

3. The policy is likely to resonate with voters, for the reasons I have set out.

@Cherub You should look at the stuff the Lib Dem Tim Leunig is proposing. Complicated but deals with your issues

@Caroline @Redpesto Haggling over the cost can be a big deal.

@Lee Read the article and define what you mean by socially progressive.

@Potter None of that will stop the policy gaining traction with the voters.
@All Headline of course is not mine

@7

How can it possibly gain traction with the voters?

For students it would still be a doubling of fees and, in practice, it would mean that the only people who would pay less under £6k pa fees are the wealthiest.

This entire policy is ridiculously regressive.

Also, I got my dates wrong earlier. I’ve got an updated timeline here and I should also point out that this is Labour’s seventh policy on fees in 14 years.

http://thepotterblogger.blogspot.com/2011/09/seventh-labour-tuition-fees-policy.html

Pardon my French, but fuck Miliband. £6K cap? This is “genius” only when “genius” = “spineless & morally defunct”.

Miliband should be ashamed. He had a chance to claw some diginity back for Labour and he has blew it (not just through this policy, but this is the icing on the cake, so to speak).

@Caroline @Redpesto Haggling over the cost can be a big deal.

…if you’re a supermarket.

You’re assuming that students will hold off taking a degree until after 2015 in the hope that Labour will win, fulfil EdM’s promise and spare them even greater debts. And that a fall in applications won’t result in Willetts telling universities that they’re charging too much in the first place. Plus, it’s also unclear whether EdM plans to restore the teaching funding for arts, humanities and social science course, which is one factor in next year’s fees.

So yes, it’s ‘clever’ politics – considering New Labour created the mess of market-driven variable fees in the first place.

@9 Mr S Pill

Spineless & morally defunct as you think that HE should be free? As I benefitted from decent grants but had to pay some contribution I would generally agree, but isn’t the problem largely due to the idea that 50% of school leavers should attend HE?

I don’t think there can be a reasonable argument against a high quality HE sector but New Labour’s 50% figure seems arbitrary to say the least. It’s not unreasonable to argue that it will lead to a reduction of quality as HE is not designed to serve a lot of the new intake. A much better system is needed to cater for a wider range of school leavers’ needs so that we can have a high quality workforce to maintain our economy in future.

It seems arguable that if we are to maintain the New Labour figure then fees are inevitable. The problem then becomes one of wealthier people being able to afford HE and a lot of quality students not even applying due to fears of swingening debts. I don’t see Miliband arguing for grants to less well-off students paid for through a reformed tax system with increased top-level income tax, which would surely be the solution?

It’s meaningless. Absolutely meaningless. Without changing the way repayments are handled, most people still won’t pay it off, so it will only make a difference to a few…who he’s charging more anyway.

It’s a sham, no two ways about it. It’s transparent and as a University tutor, I will not vote for someone who thinks that people are so idiotic that they will fall for this.

Moreover, the damage is being done. Universities will be shuttering courses and even departments next year for economic reasons, many of them strong courses (Heck, postgraduate course student number are apparently down across the board this year, worryingly!).

(On a side note, wait, tuition’s in CPI? What’s that likely to do to CPI rates, and thus that particular money saving scam from the government for linking everything to it?)

For many years Universities have been required to charge full cost fees for international students. According to the survey published by Universities UK, in 2011/12, for classroom based courses, the median undergraduate fee was £10500, and the median postgraduate fee was £11100. It would seem to me that a better indication of the market price of a course is the international fee – which not only gives a university a proper income for the course, but represents what can be charged in a free market. Courses used to be funded by a combination of fee and subsidy. This combination covered the genuine cost of a course. As numbers grew, the subsidy fell, per capita. For a time, universities could manage this by increased efficiency (modern technology), and by providing a poorer quality of experience than previously (larger classes, less contact hours). Also, home students were being subsidised by foreign students. Now it is quite evident that universities have got close to the limits of what can be achieved by efficiencies and quality reductions. Also, because of problems over student visas, overseas students will be harder to recruit. In addition, a cross subsidy from international to home students is difficult to justify. This is a complex area of public finance and one wonders whether Mr Milliband really understands it.

Let the free market rule. Then, and only then, will we know what a degree costs and what the demand for it is.

@14 – Great, and when people realise it doesn’t pay THEM? Never mind that graduate jobs create value for the economy, graduate wages won’t support that and EU graduates can fill the gap, for those businesses which don’t move abroad.

The US situation is NOT market-driven, they have orders of magnitudes more grants and subsidies…many of the larger US universities invest more in grants than the UK government “low-income” subsidy program! Neither is there the armed-forces funding route, the charity support for many students, the funding for high-grade students, the…

Oh, and American’s graduate premium is such that they DO pay a lot more for them.

But no, let’s wreck this country’s graduation rates, which have already fallen dangerously under Labour…

This is never going to happen its spin,head line grabbing crap, bananas for the monkeys! chomp chomp!

If you don’t take there proposals as serious as a “click here to earn £14000 without fail with just a £90 investment in three hours” pop up internet advert, you have issues, perhaps you treat politics like east-enders, a never ending story line of drama to absorb in….

It would not matter if the population did not think of him as a weird and incompetent, lacking the ability’s to do the job, people are so sick of the lies, the proposals that are nothing more than public approval tools to be dropped off and forgotten about at the appropriate time. Every one is sick of it, apart from the monkeys.

I’m pleasantly surprised to hear Milliband is even contemplating this. I was certain tuition fees for England would remain at the 9K cap even with a Labour majority government in the future.

“On what grounds do you say that £9k is ‘above the free Market price’? Seems like a weird statement. If it is, then prices will come down pretty quickly (by which I mean a couple of years, as all the Market participants need a bit of time to experiment).”

Free market price is where marginal costs equals marginal revenue. We know that isn’t the case at present, because the basic cost for a lecture based course without lab/fieldwork (law, english, business, etc.) is about £5.9k a year – but almost everywhere is charging £9k. So universities will be making surpluses from a rigged market.

Saying public institutions shouldn’t charge above cost, and that we should try and keep costs down so large numbers of people can continue to enjoy a university education, seems very reasonable – and I think this is a great policy.

Cost data is below: http://www.hefce.ac.uk/learning/funding/price/review0607_0809.pdf

I would add the conservatives and libdems are lying when they say it is right that students should ‘contribute’ towards the cost of their degree. If fact many will be not only paying the full cost, but a substantial markup on top.

@18 – And that’s ignoring regional cost variations (especially in London), and the fact that courses need to be cross-subsidised for those which DO cost more.

(Consider a games course which needs certain software and hardware and usually it’s own computer room….)

@18 – That is also a figure based on 2006-09 data, taking the middle year, 07-08, inflation means your figure isn’t £5.9k, but £6.3k

(And there are a lot of games courses out there which are not funded very well, yes. They’re also worth about that much as well, overall!)

7: I think you have no clue what socially progressive actually means.

The system the coalition has put in to place means someone that is in relative poverty and goes to university will a) not have to pay anything up front (same as under Labour before, but now also if they want to do part time study as well as full time) b) will likely get a bursary due to the requirements of the universities to turn that extra money in to means of enticing students from disadvantaged backgrounds; money that would be much harder to find if the money provided to HE institutions dropped…but let’s assume Ed is simply providing the money from extra financial services taxation and say that therefore the bursaries would be the same (though maybe dealt with in a different manner) c) have to repay their loan only when they breach the average wage of the UK and therefore stop being part of the lower paid workforce in the UK.

As far as socially progressive goes, we’re here… no barriers, incentives for the poor, and you don’t pay back anything until you are doing better than most other people for income.

Is this more socially progressive? No. It doesn’t change anything to promote inclusion by those who wouldn’t normally go to university, and it doesn’t improve their chances while they’re there. All it does do is mean that those who do well after uni get to keep more of their wealth rather than put it back in to HE where it can further help those that need to move up in the world.

As far as socially progressive goes, it takes a Labour system that meant that if you got an average wage job of £21k you’d end up paying your £9k plus maintenance (£13kish) loan back over just over 21 years and pay it all back. Now, there are more bursaries to be put in to place, in more universities, and the same student getting the same wage will pay *nothing*.

So, do tell me how the current scheme is less socially progressive than what we had, and how the spin Ed Miliband has made is anything less than a regressive move for how much graduates contribute back to the system.

18/19: See http://www.shef.ac.uk/finance/staff-information/howfinanceworks/higher_education/calculate_grants#capitalgrant as an example of just how much more expensive subjects can be. HEFCE funding for medical courses is around £16k (or was). A far cry above the extra £6k being raised per student that’ll take that course now.

@21 – “As far as socially progressive goes, we’re here… no barrier”

You’re putting yourself into debt for 30 years and will make a net loss over your career from taking the degree, unless you’re in the top 8% or so of earners.

Barrier!

I prefer Alec Salmond’s comment on tuition fees to the bland Miliband. Why is it that Labour have so completely lost any sense whatsoever that they are out manoevered to the left by my party?

“The rocks will melt with the sun before I allow tuition fees to be imposed on Scottish students – upfront or back door.”
Alex Salmond states his position on tuition fees.

Just saying….

@23- Citation?

Any such analysis inevitably includes money possibly earnt if working instead of learning a degree as lost potential income. Yet we also hold education to be a valuable form of self-actualization in and of itself. Is it reasonable to say that someone is a net loser just because of a small financial loss over the course of the career, having spent 3 years doing such a course? Do we assume most Ba students sign up in the hopes of £££?

Indeed, if a degree only meant the ability to earn slightly over £30k more over the course of an entire lifetime- then a barrier wouldn’t really matter would it? After all, the fiduciary benefit you have implicitly made central is small and relatively unimportant.

It seems more reasonable we are talking about the opportunity to access all the goods of education, not just increased earning potential, but the ability to have increased influence, to experience the subsidiary benefits of education, and other such goods we believe higher education to deliver.

Thus by removing barriers to access these goods we have achieved a progressive goal- unless you measure these things only on a monetary balance sheet.

@25 – Poorer people give a shit about “actualisation”. They care about money. And being able to afford a house and have kids is more important to them than a degree. Take away the factor of even earning more over a lifetime?

It’s *extremely* silly to overlook the financial factor for poorer students.

Leon Wolfson: Okay, but if that’s a problem, the current fees levels are also far too high.

I used the calculator at http://www.moneysavingexpert.com/family/student-finance-calculator to run three scenarios.
1) Tuition fees at 3.5k, maintenance loan at £4,375, 3 year course.
2) Same, but tuition at 6k
3) Same, but tuition at 9k

I kept the default assumptions of 3% average RPI, 1% over RPI average wage growth, and 2% over RPI personal wage growth (that’s a pretty good degree premium there)

For a starting salary of less than £27k – who has that high a starting salary? – all three scenarios are identical – the repayments are the same and the debt is wiped at 30 years. Even under the previous system, the repayments are so small hardly anyone will pay them off.

Increase the fees to a Milibandite £6k, and the starting salary needed to clear the debt before write-off on those assumptions is a massive £32k. So, if your salary is going to be less than £32k+2% above RPI annual pay rise, with no career breaks, your repayments under Miliband’s £6k and the coalition’s £9k are exactly identical. So why not let the university have the extra £3k. They might spend it on you (maybe even on a bursary that you get as real money right now?)

The figures quoted from HEFCE sources for the cost of courses, do not include central university overheads. They are direct cost figures relating to ‘cost centre costs’ for various subjects and exclude costs of computer services, libraries, art galleries, museums, listed buildings, student services, outreach, and general administration, and so on: all those services provided centrally for all students (indeed for all members of the university and in some cases the general public) irrespective of subject. These ‘overheads’ vary by university, but are usually between 30% to 40% of total expenditure. These overheads are funded from general revenue – it is rare for there to be any specific grants for the maintenance of these costs and, if there is, it will be short-term only. Clearly, student fee income must also make provision for central overheads (as should the costs of research contracts, or consultancy activity, or business activity).

“You’re putting yourself into debt for 30 years and will make a net loss over your career from taking the degree, unless you’re in the top 8% or so of earners.”

Watch me cry in to my cereal bowl full of money that I’ll only pay my “debt” if I’m one of the strongest earners in the country.

27. and Leon.

The problem is how you frame the discussion on money. Leon, you keep talking about debt, but it is irresponsible to do so.

I don’t disagree that the poor are put off from the education through the sight of money, but we’re doing nothing to explain this issue away. While some will scream “£60k debt!” the reality is so much more nuanced, and unfortunately too complicated to simply bark at someone!

The real “debt” most people will incur for both education AND living costs will be around £12k or less, the barrier hasn’t been so low for those on low incomes for a long time. The shifting of actual living costs in to the equation means that even those that were trying to get in to university before tuition fees were introduced may have had a harder time being able to meet the financial commitments, much more up front as they were.

But the NUS, Labour, etc…they don’t want to reveal this quite progressive reality. It doesn’t suit them, it seems, to say that actually the policy now coming in to effect is a great step forward, despite not being perfect.

It’s also worth pointing out again, assuming someone takes their maintenance loan, even at out of London prices, you can reduce tuition fees to 1998 levels (after inflation) and still average graduates will pay the same as they would under £9k fees.

The time to refer to universities cost by the tuition fee price is over.

Completely ignores the fact that lowering the cap to £6k actually makes no difference to the poorest students in terms of how much they repay. It will only mean less is collected from richer students. This policy is the ultimate in fuzzy thinking, with Labour failing to admit that a policy where the rich pay more for their education and the poor less is in fact undeniably progressive.

If you don’t believe the poor will pay the same amount take a gander at this:

http://www.libdemvoice.org?/labour-tution-fees-25395.?html

@27 – The current interest levels are not RPI+3%, though. That’s a change. The current levels are RPI, or “1% above the highest base rate of a nominated group of banks”, which is often lower than RPI!

The rates have been 0% and 1.5% in the last two years, and 1.5% for 2011/2012. On the other hand, RPI+3% in those years would have been 5.4%, 7.8% and 8.2%!

The systems have *radically* different interest rates!

@30 – It is grossly irresponsible NOT to. It is debt, which is carried on the government, and will have to be written off by them. And no, £60k is not £12k.

It is meaningful to talk of aspirations ONLY if going to University increases your income over your working life. This is no longer true outside Oxbridge, and thus…

Leon: The systems have *radically* different interest rates!

This is true, but again, you have to be fairly rich to be earning enough to repay the original capital portion of the loan, which means that the difference between “real terms” and “RPI+3%” interest rates only matters if you’ve got a very well-paying job.

It is debt, which is carried on the government, and will have to be written off by them.

Not strictly true, and not necessarily relevant in so far as it is true.

Not strictly true because the government routinely sells the student loans to private investors, in exchange for immediate cash. Of course, the cash the government gets will be based on the expected level of write-offs, so it still needs to be accounted for.

It’s not relevant because HE costs the same [1] whether it’s paid for from this bizarre graduate repayments of arbitrary loan amounts or through general taxation. So, the government can either pay universities £X now, paid for through a mix of taxation and government borrowing, or it can pay £X now, paid for through a mix of general taxation, government borrowing, and “loan-repayment” taxation.

Either way the government needs to find a certain amount of money over a certain time period, and either way taxpayers will eventually need to provide that money. The only difference is that in this system taxpayers who are simultaneously rich and graduates will be paying a larger share than they would under a system paid solely through general taxation.

[1] Yes, okay, charging £9k fees does slightly increase the amount the government needs to pay to fund HE. But if the coalition had said “Fees stay the same, and we’re going to increase teaching funding by about £1500 for every student” then … well, okay, a bit odd when they’re cutting everything else, but I don’t think it would have been a big deal.

“The systems have *radically* different interest rates!”

Makes no difference to those that won’t pay off the original loan amount, and makes little difference to those who can pay off quickly (i.e. those that Ed M is claiming will have an even higher interest rate). It is a negative, but only to those that earn good money, and in a sense become the true contributors to a graduate tax (mostly) irrespective of amount loaned.

“It is debt, ”

It’s not.

“This is no longer true outside Oxbridge, and thus…”

…means you won’t have to worry about paying back £60k more likely than not, hence your “debt” being a pointless measure.

Intrigued by people saying that any change to tuition fees would result in poorer students paying more or less – students pay nothing under this system remember (they simply pay back loans in a form of partial taxation in the future – and considering the earnings threshold required, that will be when they are no longer students). And we cannot tell who the poorer graduates will be (we can offer a good guess, but that is not the same…), so this entire debate is about abstract groups of people.

Somehow, some commentators seem to be trying to focus it onto the poorer of society now – but if universities do their job (and most do) those from poor backgrounds will not necessarily be the poorest anyway. It strikes me that alongside the general principalled opposition (e.g. Leon) there is also plentiful general ignorance about this policy by people who cannot take the time to learn about things properly. Ironically really on a thread about higher education…

@28. Merrymaker: “Clearly, student fee income must also make provision for central overheads (as should the costs of research contracts…”

It is already the case that research grant providers pay for the *research* bit and that general overheads (computing equipment, office/lab space etc) are provided without charge by the institution. Effectively this is a funding cut for departments who have relied on research grant surplus to pay for everyday utilities. The effects of this policy are likely to become more visible in the next year or so.

@33. Leon Wolfson: “The systems have *radically* different interest rates!”

The main weakness of the Miliband promise is that it is a change to the upfront loan size but does not reform the payback mechanism. The cleverness of the current loan proposition is that it implements a progressive “graduate tax” without being a tax; the beneficiaries will be graduates earning low and modest incomes; beneficiaries of the loan are expected to pay money back wherever they live unlike a graduate tax. If you don’t understand the cleverness of the payback that has been proposed, you can get suckered, like Ed Miliband, into proposing a scheme that looks nice but is less progressive.

And funding an on-going cost (student funding) on the basis of an opportunistic tax (reversing a capital gains tax cut) does not come across as a sustainable policy.

@21. Lee Griffin: “The system the coalition has put in to place means someone that is in relative poverty and goes to university…”

My guess is that few 18 year olds have an independent income and thus almost all of them are relatively poor. The current loan proposition is encouraging to students from *poor households* (via upfront costs and eligibility for bursaries) but also promotes the idea that 18 year olds are young independent adults. Getting into university becomes more about getting academic results than persuading mum and dad to contribute financially.

—
Unremarked upon so far are the consequences of almost all universities opting for the maximum £9,000 pa tuition fee. The costing assumption of universities has been that it is better to charge big fees (£9,000 or a bit less) and to redistribute fee income via bursaries to students from low income families or to high achieving applicants (two A Levels at A grade can be worth a nice ransom, probably one picked up by students from wealthier backgrounds).

But because universities have used similar distribution models and almost all are charging £9,000 pa, government is wading in to tell universities what to do. As Merrymaker and others have mentioned, £9,000 pa is not the total cost of tuition for many courses. Universities will still rely on direct government grants (there would be no other way to fund medicine, engineering and science) or on income from non-EU/UK student teaching. What government is telling universities which have not created imaginative tuition fee/bursary bundles is that EU/UK student numbers will be reduced by a few hundred per institution. Those cuts in student numbers will probably emerge in arts, social sciences and unfashionable STEM subjects (eg chemistry or geology).

@34 – Except until the last few years with 3k fees, paying your student loan off was *routine*. Even then, the majority of the graduates on that should! You’re overlooking the effect of cumulative interest.

@35 – It’s a pink banana then. It’s still got to be found by the government, and paid off by the people with it, like all other pink bananas. It just has specific repayment terms. And yes, we’re in agreement, it’s not worth taking it on to pay back in the first place outside Oxbridge, so…

@37 – Right. Total agreement on the repayment point there.

And you might be surprised where the cuts are. Many high-performing departments will go, simply because they’re expensive. Or because graduates don’t earn that much, never mind that they’re fields where no graduates earn that much!

Many Universities have cut costs, as well, by reducing the amount of time their staff spend on research in favour of teaching. Which in turn of course hurts our R&D…

@38. Leon Wolfson: “And you might be surprised where the cuts are.”

I will never be surprised. Research departments require that there is a bunch of inquisitive youngsters. If you cut off the supply of youngsters, you kill the department.

@39 – Okay, a hypothetical rational observer might be surprised then. Geez! :p

(But yes, seeing a LOT of damage to the Universities I work at, sadly)

We all know the answer.

There are people who do not understand other people.

There are people who hate people.

39. Charlieman

Research departments require that there is a bunch of inquisitive youngsters. If you cut off the supply of youngsters, you kill the department.

Yeah but the Unions and tenure means it is hard to sack the old. So the young just won’t get jobs. The humanities saw this when there was a massive refusal to hire anyone between, roughly, 1972 and 1990. All the baby boomers got tenured jobs before 1972 and so denied a place to any idiot foolish enough to be born in the 1950s or 60s.

“And yes, we’re in agreement, it’s not worth taking it on to pay back in the first place outside Oxbridge, so…”

I don’t think we’re in agreement. Given that at average wage you essentially only pay back your rent you get 3 years of relatively easy living (in terms of how little you need to work), with the opportunity to expand your boundaries and understanding of the world and the people in it, as well as learning some things that may well do you better as your career goes on (I don’t think we have any data on this to say either way).

For me, if the opportunity is there to have 3 years of exploring who I am, what different cultures are like, and where I’ll fit in to the world with minimal need to actually “become an adult”, and paying back the housing costs over 30 years…I’d take it.

Others might want to just get on the career ladder and start climbing, in some areas that might be better to do without university. In others it’ll end up being one of those careers where university education does give you a wage premium. Either way I don’t see it as not worthwhile under this current loan system.

Leon/34: Except until the last few years with 3k fees, paying your student loan off was *routine*. Even then, the majority of the graduates on that should! You’re overlooking the effect of cumulative interest.

On £1k fees or even £3k fees, commercial-style interest rates would be a problem because they benefit high earners who will pay the loan off much sooner and so pay less interest. And, as you say, most people will be likely to pay off the entire loan, so the longer you take the more you pay.

On £9k fees – and an increased threshold for starting repayments – commercial interest rates take more money from high earners and are irrelevant to low earners. High earners will need to repay a greater amount (especially with the plans to scale the personal interest rate to the repayment rate), while low and medium earners who won’t even repay the original inflation-adjusted capital are completely unaffected.

Charlieman/37: If you don’t understand the cleverness of the payback that has been proposed

You call it cleverness, I call it ridiculous levels of obfuscation and complexity to implement a simple graduate tax… I suppose that’s “cleverness” in the “get the Tories to vote for it” sense.

Leon/40: (But yes, seeing a LOT of damage to the Universities I work at, sadly)

It certainly hasn’t helped that the government cut the funding this year, but won’t allow the universities to charge the higher fees to replace the cut funding until next year.

Proof if proof were needed that life is all about perception.

If Mili-junior was PM there would no doubt be consternation amongst Labour supporters that their leader had DOUBLED tuition fees – but given Dave & Nick’s err, contribution to higher education our Ed now seems almost reasonable?

Mind you, given that tuition fees do not represent debt (in the parallel universe occupied by some commentators) why on earth should Ed be proclaimed a genius for promising to cut them? – in fact, in the sort of monopoly world proposed by some, the only important question is how HIGH fees should be, surely?

Come on guys there must be more scope to push the numbers a bit higher?

@43 – Most of the poor, again, are not going to be consider the non-financial factors as the priority. Given the sacrifices needed to push a kid through university (and yes, they do generally need support over and above…and that’s ignoring them not being contributors for those years, especially given many will try and live at home under this system), if they are not going to earn more money over their career?

No, that’s a killer for them for going to university.

@42 – Tenure? WHAT “Tenure”?

Here is a link to a report on three people who died after their benefits were taken away under this new system (started by Labour, continued by Tories and would be by Miliband) http://www.heraldscotland.com/news/home-news/demand-for-fairer-benefits-tests-as-two-die-1.1085915

And here is a case study on Larry Newman. Found fit to work, died of a terrible illness http://www.guardian.co.uk/society/2011/jul/24/atos-case-study-larry-newman

Before Sunny Hundal gets too smug, he died in March 2010, under Labour.

I wonder if he was the man Ed Milliband met who was obviously fit for work?

“Come on guys there must be more scope to push the numbers a bit higher?”

Absolutely, and then they might as well do what it’s mostly implemented here and just call it a graduate tax.

I agree with Martin of money saving expert fame though… I think the £21k repayent barrier is low, and a higher barrier with a higher repayment percentage would be “fairer” in a “don’t penalise those that don’t reap the benefits” kind of way.

However his £30k barrier with 11% fees is also, in my mind, just an argument for lowering the 40% tax bracket down to 30k for everyone and doing away with any graduate based contributions all together. (which, albeit maybe in different tax banding scenarios, I’d be all for)

“Most of the poor, again, are not going to be consider the non-financial factors as the priority.”

I’m not talking about the non-financial factors. The average student will only pay back their rent. Instead of paying their rent up front as they go they will end up paying that rent over the course of 30 years. As far as financial factors, it’s very enticing to anyone that can do more than look at big numbers and get scared.

If the “poor” are put off from this situation it is because they are stupid or are lazy and listening to those like you over-egging the pudding on how much of a financial strain this system is.

[49] “over-egging the pudding on how much of a financial strain this system is” – he- hee, I like that, ‘over-egging the pudding’ – the first generation of graduates who will still be paying off students loans when their OWN children go to university.

By the way – will the graduate tax be applied retrospectively – seems rather unfair to penalise today’s students (on the basis of projected earnings) while students of yesteryear are laughing all the way to the bank – surely they should be making a contribution as well?

@49. Lee Griffin: “If the “poor” are put off from this situation it is because they are stupid or are lazy and listening to those like you over-egging the pudding on how much of a financial strain this system is.”

I understand your frustration, Lee, but those words are not helpful. Simon Hughes was set off on a diplomacy job to explain to low income families that a university tuition loan is not a burden for life. Hughes is a very personable and persuasive man, and whilst few of us can match his ability on those scores, we can still present a decent case for the impending loans systems adopting his arguments. The arguments are not about stupidity or laziness but an incorrect perception of student loan indebtedness.

@50. the a&e charge nurse: “…the first generation of graduates who will still be paying off students loans when their OWN children go to university.”

That will be true in many future cases. When my eldest sister first took on a mortgage (about five years after younger siblings did the same thing), my parents still had their first mortgage. I don’t see how the new loan scheme will affect 18 year old ideals. After all, mum and dad have a mortgage and 1.5 student loans of their own to pay off… (I do see it, to an extent, but the complexity of the minority cases makes my head explode.)

A&E

“By the way – will the graduate tax be applied retrospectively – seems rather unfair to penalise today’s students (on the basis of projected earnings) while students of yesteryear are laughing all the way to the bank – surely they should be making a contribution as well?”

It would be simple to just wipe everyone’s debt and apply the graduate tax universally. However at the same time I’m a general believer in people not being forced in to changes that they didn’t know would give them a certain outcome in advance, so applying a graduate tax to them is unfair.

It would be fine to apply a graduate tax retrospectively if the limits and repayment percentage were set to such a level that it was in the spirit of redistribution and not just making all graduates pay.

Charlieman:

“I understand your frustration, Lee, but those words are not helpful.”

Helpful? Maybe not. They are, however, the reality. I’m past the mincing of words stage, politicians that are the ones being listened to on this can be the ones that frame it in a more friendly way.

“The arguments are not about stupidity or laziness but an incorrect perception of student loan indebtedness.”

I’ll be clear, I agree it’s about perception…however if after being explained the situation they still choose to believe they can’t afford it, or that it’s a debt, then they are stupid or lazy.