Government miscalculation means tuition fees could rise again

Published by Impact Magazine (Online) April 01, 2014.

Universities Minister David Willetts has admitted that tuition fees could rise further, while the government estimates that 45% of graduates will not be able to repay their student loans.

The Conservative cabinet member stated that the government would “have to see how the income of universities performs” in response to a question about increasing fees after 2015.

Willetts said the fees have been fixed at £9,000 “for this parliament’’ and that the system is believed to be ‘‘far more sustainable than any alternative’’.

This is after a former adviser, Nick Hillman, called for more reforms owing to the potential funding gap created by mistakes in the original government model. It has been calculated that if 48.6% of loans are not repaid, then the state will lose money in comparison to the previous system of lower tuition fees.

In a Channel 4 News interview, Willetts said the fees have been fixed at £9,000 “for this parliament’’ and that the system is believed to be ‘‘far more sustainable than any alternative’’.

“At present these figures are just future projections, so there is no reason that we should be thinking about increasing fees again right now.”

However, Channel 4 presenter Cathy Newman later tweeted that Willetts reply ‘‘could be’’ to an off-camera question about the possibility of increasing fees after the general election.

In response to this, the Labour party have announced that one of their manifesto pledges in the next election will intend to reduce the £9,000 fees to a maximum of £6,000; however a long term policy is yet to be agreed.

“For a government that prides itself on financial responsibility, the announcement by the Universities minister is a damning indictment of their credibility”.

Tomas Polak, President of the Liberal Youth Society at the University of Nottingham, told Impact: “I think the latest estimates go some way to proving what the Lib Dems have been arguing all along – the new fees system is a fair deal because graduates only make payments when they can afford to. At present these figures are just future projections, so there is no reason that we should be thinking about increasing fees again right now”.

Nottingham Labour Students told Impact: “for a government that prides itself on financial responsibility, the announcement by the Universities minister is a damning indictment of their credibility. At present these figures are just future projections, so there is no reason that we should be thinking about increasing fees again right now, especially in the case of the Liberal Democrats who betrayed so many in supporting this policy.”

Young Greens President Duncan Davis said, “I think it was pretty obvious that this would happen. The means tested system is very complicated and expensive”.

In 2012, it was estimated that 28% of loans would never be fully paid back. This has now risen to 45%. On the 22nd March, David Willetts revealed the projected increase, which had also risen from 40% six months ago.

The government and political analysts have said that these forecasts are subject to change in the long term, particularly in relation to UK economic growth, employment and wage rates.

Yasemin Craggs Mersinoglu 

Image Credit: The Edge Foundation via Flickr.

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