More truth about the Government's fees plans

Thursday 09-12-2010 - 00:00

The Institute for Fiscal studies have released an analysis of the Government's fee plans- it can be found here. Some highlights:


Government plans will provide “incentive for universities…to turn away students from poorer backgrounds”

“The new system… generates perverse  incentives – for example the National Scholarship fund provides a financial incentive for universities charging over £6,000 a year to turn away students from poorer backgrounds... Universities attracting a higher proportion of poorer students have to absorb additional costs compared to  universities that attract a lower proportion, if they want to implement fees above £6,000”

All students (including poorer students) will pay more under Government fee plans

“If we… examine the implications of the proposed reforms by students’ family income, we see that the  proposed system … (sees) graduates from the poorest 30% of households to pay back significantly more than under the  current system (this is because while overall debt for students with a scholarship will be slightly lower than  under the current system, repayments will be still be higher because of the increase in interest rates).

Less prestigious universities that do best to widen access will be more expensive

“a student from a low-income background who studies at a university charging £6,000 (or below) will have to borrow the full fee amount for two years (up to £12,000) – while a  student at a university charging £6,001 (or more) will have his/her fees covered for two years and will take  out fee loans equal to only one year’s fees (a maximum of £9,000). Given the Government’s emphasis on  allowing student choice and fee variability to drive the higher education sector, it seems surprising to  introduce a distortion into this quasi-market which would potentially make a degree at an elite university cheaper than at a less prestigious one”

Squeezed middle will be hit hardest

A family with both parents on modest incomes will be hit hardest: “it is hard to justify why students from households earning £42,600 should face larger debts than all other students doing similar priced courses”



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