A far more revolutionary approach is needed to university finances
The sixth form office in my Sheffield school is a fabulous place to work, always a hive of activity and there’s never a dull moment. Monday morning this week brought a flurry of visitors from Year 12 and Year 13 who were excited about a news story they had heard over the half term holiday.
A proposal had been put forward to government that would see the cost of university tuition fees reduced – not by a huge percentage, it has to be said – but reduced nevertheless to £7500 a year.There is genuine anxiety amongst some Sixth Form students about the amount of debt they are about to chalk up if they head off to university so news that it could be reduced across the three years by over £5,000 was well received.The headlines pointed towards a financial gain for my sixth formers, but reading a little further into what the report actually said revealed the detail to be a wolf in sheep’s clothing. The review of university funding was commissioned by the government and has been long awaited .
Theresa May is on her way out this week, but she recognises the current student finance system is not sustainable and damages those from poorer backgrounds; this week she called for the next leader to consider reintroducing maintenance grants that were cut in 2016 and admitted scrapping them had been a mistake. When some students are put off from going to university because of the financial burden, we have to do something about this and try to balance things out more fairly.
It is in the interests of all society for as many people to go to university as possible because it leads to an increase in tolerance, skills and those able to deliver top class public services.
The review into student finances grabbed headlines and the enthusiasm of young people with suggestion that the annual fee cap should be reduced. But the flip side to this would be the higher interest rates that are charged and repayments being collected for a whole decade longer. This will mean students repaying more money and for longer, with those from poorer backgrounds often being left with less disposable income after the direct debit is taken out.
There is very little good news coming out of the this review. And so students came into our office with smiles on their faces, telling us their news about student finances, only to leave with the wind taken out of their sails after hearing our news about their student finances.
Something has got to change, everybody in education knows that. The current system of student finance is leaving massive holes in government finances so either the repayment methods need to be shaken up as Augar is suggesting or further funding needs to be found by raising taxes.If neither of these things are done, we could be heading for calamity.
There are banking experts in the city who are concerned that the growth of student debt could lead to a financial crisis similar to the one that allowed austerity to rear its head and education budgets to be slashed. Nothing could alienate students and put more pressure on an already broken education system than being able to point the finger and blame it for a financial meltdown and nationwide recession. If that happened, the university sector would never recover. Augar’s shake-up, however, does not go far enough and is not inventive enough.
It fails to see university education for what it actually is – an investment in the future of the country.
Several nations that are far less wealthy than ours do recognise this and pay for students to go through university in the belief that they will contribute a greater financial service to the economy than the cost of the fees.
Heath professionals and teachers do this, as well as scientists involved in pioneering research. We should be putting smiles on the faces of all A Level students by helping and encouraging them to get to university and leaving without so much debt. City bankers are fearful of the way student debts are handled and a more revolutionary approach is needed if we are to square the circle of university finances.