Are The Banks Behind The Tuition Fee's

[dissident junk]

So the only 'progressive' (sic) option, is more funding from tick?!?

What happens in five years time when you guys deem £9k isn't enough and demand £15k a year? £25k, £40k?

There will come a point when the cost of higher education will out strip any potential for future earnings. Then it really will be a case of the party being over.

It seems that Universities haven't given the implications of these fees and accociated student debt a second thought, otherwise they'd realise that they are infact cheerleeding their own destruction.

They have. The research institutions are not concerned because they have been operating with high stakes students for a number of years through international strudents that pay full fees. It is the recruitment-driven institutions who are very worried.

The issue is that degree courses have not been exposed to real price signals to find their natural individual price level because of state subsidy and interference, which has dictated the cost to the student of a very lucrative degree must be the same as one that is not so lucrative.

£15K a year in fees is not so shocking if the degree is an MBA, or in dentistry, or in a clinical subject and opens up the path to a career in surgery where you will earn above average earnings your entire life. It is however, a killer, if that subject is an arts and humanities where you may never earn more than average wages.

Strawman argument. There is a perfectly viable third alternative, which is to reduce the numbers of students taking degrees. By reducing student numbers the government could increase state funding per student without spending more. I would suggest going back to 15% of young people going to university as it was in the 80s. It was affordable to taxpayers, students, and their families.

Also it is completely obvious which degrees should be cut. State subsidy should be abolished for all students with A-levels below BBB (or some UCAS points equivalent). If somebody can't cope with A-levels, they shouldn't be at university.

I agree, but we do not live in an environment where such a proposal would be accepted. It would be seen as elitist, and, to be fair, the state of state education at present basically means that hardly any children from state schools would be able to attend, regardless of how intelligent they actually were.

[Dorkins]

You talk about offering value for money, that if Unis are not cost effective whilst delivering quality, they shouldn’t exist. The fact is that quality comes at a price level; at that price level, it can be very cost-effective, value for money and deliver quality for a student who pays the increased fees. Take a geology degree, at the actual cost of about £14K a year (students currently pay around £3.5K of that; taxpayers pay the rest). Under the Browne proposals, the indications are that a student would probably pay £9K a year, government would pick up the rest: so that would be £27K in tuition fees for the student. But that is value for money and very cost effective for such a student if that student then goes on to work in mining and extraction and ends up earning upwards of £100K a year.

You are assuming that these numbers like this represent good value for money. £14,000 a year, or about £500 per teaching week, to teach an undergraduate? That seems crazily overpriced. Lecture halls fit hundreds of students at a time.

We are in danger of creating yet another government-endorsed false "market" just as we did with the utility companies, railways, PFI projects, BBC internal market etc. Barriers to entry will be high, competition will be low, consumer information will be poor, pricing will be deliberately confusing. We've seen it all before. Show me a successful free market in higher education.

We know that government subsidy and rationing of higher education works, because we had it before. Do today's politicians have any complaints about the university education they received for free? Did it bankrupt the taxpayer? Did we end up with a serious shortage of well-educated professionals?

[Dorkins]

I agree, but we do not live in an environment where such a proposal would be accepted. It would be seen as elitist, and, to be fair, the state of state education at present basically means that hardly any children from state schools would be able to attend, regardless of how intelligent they actually were.

Only 7% of schoolchildren in this country attend private schools. If we were to cut university places to 15% of young people, at least half of them would still go to young people from state schools. And that is assuming that the brightest kid from a state school is thicker than the dumbest kid from a private school.

£9k per year tuition fees may well prove to be far less progressive than low student numbers and high subsidies as we had before. £27k in tuition fees, plus £8k per year living costs, that's £50k of undefaultable debt accruing compound interest at the age of 21. Hard to imagine a better way of scaring low (and even middle) income families out of sending their children to university.

[Guest spp]

Debt bondage!

[dissident junk]

You are assuming that these numbers like this represent good value for money. £14,000 a year, or about £500 per teaching week, to teach an undergraduate? That seems crazily overpriced. Lecture halls fit hundreds of students at a time.

We are in danger of creating yet another government-endorsed false "market" just as we did with the utility companies, railways, PFI projects, BBC internal market etc. Barriers to entry will be high, competition will be low, consumer information will be poor, pricing will be deliberately confusing. We've seen it all before. Show me a successful free market in higher education.

We know that government subsidy and rationing of higher education works, because we had it before. Do today's politicians have any complaints about the university education they received for free? Did it bankrupt the taxpayer? Did we end up with a serious shortage of well-educated professionals?

The £14K a year I spoke about is for a geology degree. Most science and engineering degrees come in at this kind of price band in reality.

And yes, that is how much it costs. Think about it ... this is not just teaching time, salaries of lecturers, and the cost of libraries and IT this time; with these subjects, we are talking stocked fully functional labs with full time lab assistants, machinery, materials, samples, things that whirr and go ping, specialist microscopes, field trips, safes, machines that smash things up, machines that drop miniscule bits of liquid onto petri-dishes, hydrolic this and that, ovens, flames, test-tubes, freezers, expensive chemicals, expensive metals, expensive containers to keep the expensive chemicals and metals in.

When you do a degree in biochemistry, you don't just read a few books and go to three lectures a week , you do full days in the lab.

Furthermore, medicine and dentistry is more like £22K+ a year to deliver. Same applies there. It is the equipment, the facilities you need. First year of a medical degree, students dissect cadavers, so you need the room, the equipment, the chemicals, the appropriate storage, the morgue refrigerators, the clothing, the autopsy tables, the pumps, the scales, the testing areas, and a specialist lecturer, then there's the electric, water and effluent costs and that would just be one module that year for a cohort of 200 at most? With each class only 20? It is pricey to deliver this stuff.

The other expense with STEM subjects is the teaching costs. You want to deliver quality, you need to pay for the lecturers. Why should an internationally renowned researcher teach your students instead of going to work for Big Pharma or opening a private practice?

However, most arts and humanities, and social science, subjects come in at about £8.5K a year in real cost (these are the subjects that tend to be simpler to deliver, more lecture hall and seminar room based). This sounds like a lot but it's the rooms, the buildings, the libraries, the IT.

I know it sounds like a lot, but consider this. I work in a faculty that teaches over two thousand students every year and employs about 300 members of staff. Our yearly costs in total are actually less than the annual costs of a small civil service department that employs 200 people and deals with ombudsman complaints for a region of the North.

Edited December 9, 2010 by dissident junk

[dissident junk]

And I have to add, Dorkins, I am very surprised that you are so surprised that this is how much it really costs to deliver higher education.

Considering it costs an average of £6K a year to educate a secondary school pupil in the state system, it doesn't seem that far fetched for it to cost £14K a year to educate an undergraduate doing a neuroscience BSc.

[PopGun]

Strawman argument. There is a perfectly viable third alternative, which is to reduce the numbers of students taking degrees. By reducing student numbers the government could increase state funding per student without spending more. I would suggest going back to 15% of young people going to university as it was in the 80s. It was affordable to taxpayers, students, and their families.

Also it is completely obvious which degrees should be cut. State subsidy should be abolished for all students with A-levels below BBB (or some UCAS points equivalent). If somebody can't cope with A-levels, they shouldn't be at university.

+1

sush we want the party to continue, and the young to pay for it.

[PopGun]

I hate to say it, but I get a bit of a sense amongst some students that they have the right to study any course they want, regardless of its real world economic value for them or for others in society, and regardless of its real cost, and have everyone else pick up the tab.

That's a good point, however aren't these same courses the ones that require less resources to deliver on per capita funding? I.e. are micky mouse courses also the bread and butter funding revenues?

[bogbrush]

If industry demands a specific type of graduate within a specific specialisation or skill set, then it's Industry who should be paying for it. It's the only logical conclusion, if both state and the individual become reluctant to take on the risk and debt burden.

That supposed £100k extra of life time's earnings is increasingly looking like depreciating value.

Anyone who uses anything should pay for it. Usually we pay for big brain skills in high wages, sometimes we pay in apprenticeship/sponsored education schemes. I'm 100% in favour of that so why are you rolling your eyes?

I am against enforced funding of students by people who don't even use their "skills", and the consequent corruption of the education "market" that always accompanies any such frigging (which is why we now have so many useless students doing useless degrees in useless subjects that nobody else has the slightest need for).

[bogbrush]

Its ironic that what is considered the best brains across all spectrums from arts, business, IT, engineering, Politics et al who are relaying their thoughts and beliefs to young minds cant come up with a credible plan to run their own institutions. If they cant keep their own affairs in order how can they possibly expect the learners to?

Obviosuly they can't do that. That's why they are still at school and will never leave.

[PopGun]

Anyone who uses anything should pay for it. Usually we pay for big brain skills in high wages, sometimes we pay in apprenticeship/sponsored education schemes. I'm 100% in favour of that so why are you rolling your eyes?

I am against enforced funding of students by people who don't even use their "skills", and the consequent corruption of the education "market" that always accompanies any such frigging (which is why we now have so many useless students doing useless degrees in useless subjects that nobody else has the slightest need for).

Maybe if industry picked up more of the tab, they'd have a better influence on graduate outcome.

Another question could be why are degrees suddenly so essential? They never used to be, even the 'good' ones.

[bogbrush]

Maybe if industry picked up more of the tab, they'd have a better influence on graduate outcome.

Another question could be why are degrees suddenly so essential? They never used to be, even the 'good' ones.

Bottom line, education is for the student not the employer. That's why the student should pay for it.

The employer buys the labour which has a price determined by value and scarcity, and valuable education will alter that. If the education doesn't affect the value then the student has wasted money, unless they did it for self-development in which case that's great.

Sometimes employers decide (as I do) that providing a package of wages and education is a better solution as it ensures some aspects of education not provided externally (such as attitudes, approaches etc) can be covered at the same time. These are apprentices.

I totally agree about degrees; it seems to me they became as easy differentiator for employers but wise ones know they aren't the be-all and end-all.

Charging students for education is a very smart idea as it will force the education supplier to respond to the value created; students won't do garbage degrees so easily if they have to pay themselves. Employers will be unaffected as they don't take any interest in Media Studies graduates anyway, except as McD burger flippers. Providing a deferral on repayment removes the problem of access. In reality anyone moaning about the current changes is being thick or ingenuous.

Edited December 10, 2010 by bogbrush

[fluffy666]

Bottom line, education is for the student not the employer. That's why the student should pay for it.

Your kids pay for theirs?

[tonytramcar]

Won't a lot of student debt be wiped out by inflation, or are we going to have low inflation rates for ever ? I don't think I've seen any mention of this anywhere, but it will surely make a difference...

Won't it ?....

[Dorkins]

And I have to add, Dorkins, I am very surprised that you are so surprised that this is how much it really costs to deliver higher education.

Considering it costs an average of £6K a year to educate a secondary school pupil in the state system, it doesn't seem that far fetched for it to cost £14K a year to educate an undergraduate doing a neuroscience BSc.

Yes I certainly am surprised. It costs about £25k-30k per year to educate a biosciences PhD student, including the £15k stipend that feeds and houses him. These are people who spend 30-40 hours per week in a laboratory, using expensive consumables and equipment. And yet it costs £14k for an undergraduate who spends most of his time in lecture halls and libraries, and excludes living costs?

[Dorkins]

Won't a lot of student debt be wiped out by inflation, or are we going to have low inflation rates for ever ? I don't think I've seen any mention of this anywhere, but it will surely make a difference...

Won't it ?....

The interest rate on the debt is RPI + 2.2%. This debt cannot be inflated away and it cannot be defaulted upon (student loans are not cleared by bankruptcy).

[DTMark]

What I'm suprised nobody has picked up on is: that if the debt doesn't need to be repaid until the graduate earns 21k...

And if one of the reasons people go to Uni, and the reason why it might be, er, legitimate for ex-students to "contribute" to the cost of that education is that they will earn more:

What might happen to - epecially entry level - graduate salaries if the debt starts needing to be repaid above 21k?

[The Spaniard]

The interest rate on the debt is RPI + 2.2%. This debt cannot be inflated away and it cannot be defaulted upon (student loans are not cleared by bankruptcy).

You can't win, you can't draw, and you can't get out of the game.

Welcome to debt slavery.

[PopGun]

Bottom line, education is for the student not the employer. That's why the student should pay for it.

The employer buys the labour which has a price determined by value and scarcity, and valuable education will alter that. If the education doesn't affect the value then the student has wasted money, unless they did it for self-development in which case that's great.

Sometimes employers decide (as I do) that providing a package of wages and education is a better solution as it ensures some aspects of education not provided externally (such as attitudes, approaches etc) can be covered at the same time. These are apprentices.

I totally agree about degrees; it seems to me they became as easy differentiator for employers but wise ones know they aren't the be-all and end-all.

Charging students for education is a very smart idea as it will force the education supplier to respond to the value created; students won't do garbage degrees so easily if they have to pay themselves. Employers will be unaffected as they don't take any interest in Media Studies graduates anyway, except as McD burger flippers. Providing a deferral on repayment removes the problem of access. In reality anyone moaning about the current changes is being thick or ingenuous.

You've once again made the mistake of thinking your view point is industry standard.

[bogbrush]

You've once again made the mistake of thinking your view point is industry standard.

I've never made that mistake; in c6000 posts I've only ever represented my own viewpoint. I am no more allied to the opinions of stupid industry leaders than I am cretinous "students".

Why are you making the mistake of thinking I do?

[fluffy666]

The interest rate on the debt is RPI + 2.2%. This debt cannot be inflated away and it cannot be defaulted upon (student loans are not cleared by bankruptcy).

Ouch.

Of course, the only sane reaction as a parent with a vague interest in their kid's welfare is to save like mad. Once I've added that to the loss of child benefit and tax credits, it comes to about £400/month so far, or about the same as a tax hike of 12p on the basic rate.

[PopGun]

The interest rate on the debt is RPI + 2.2%. This debt cannot be inflated away and it cannot be defaulted upon (student loans are not cleared by bankruptcy).

this is the REAL bottom line.

Most graduates simply will never earn enough money over a sufficient length of time to pay this debt off. It makes the whole who's funding who argument pretty moot.

Sooner or later, young people will realise that they're better off not bothering. The same elastic fantastic financial policy TBTB use with house prices just won't work with Higher Education.

Sub-Prime loans won’t save house prices, and they certainly won’t prop up excessive university costs. The government have effectively in the long run, allowed many institutions to price themselves out of the market.

[bogbrush]

this is the REAL bottom line.

Most graduates simply will never earn enough money over a sufficient length of time to pay this debt off. It makes the whole who's funding who argument pretty moot.

Sooner or later, young people will realise that they're better off not bothering. The same elastic fantastic financial policy TBTB use with house prices just won't work with Higher Education.

Sub-Prime loans won’t save house prices, and they certainly won’t prop up excessive university costs. The government have effectively in the long run, allowed many institutions to price themselves out of the market.

Great. Now they'll have to change, right?

[PopGun]

Great. Now they'll have to change, right?

Too late for that, the bill for the shiny new campus is due.

[DTMark]

Sooner or later, young people will realise that they're better off not bothering.

Or. they're better off keeping their (declared) earnings below 21k so they could afford luxuries like renting somewhere to live.

Imagine a scenario where the Government and corporations (rapidly becoming inseperable in this country) could incentivise people to be paid less money...