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Miliband Poised To Pledge £3,000 Reduction In University Fees

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http://www.independent.co.uk/student/news/miliband-poised-to-pledge-3000-reduction-in-university-fees-9225822.html

Labour is finalising plans to slash university fees in an audacious bid to win over parents and students concerned by the spiralling cost of higher education and mounting student debt.

Labour leader Ed Miliband is expected to promise to reduce the £9,000 annual fee by at least £3,000. Insiders suggest the figure could be cut to £4,000 as the party prepares a counter attack to Tories pension reforms in a bid to win back voters.

The policy is understood to cost £1.7bn to implement – a sum that Labour are expected to argue will not be an additional cost to the Treasury because of the fewer debt write-offs. Tories last night dismissed the plan as an “underfunded spending promise”.

The student loan pledge was first floated by Mr Miliband in his 2011 conference speech but has been reignited in recent days after government calculations estimated that 45 per cent of outstanding student debts will have to be written off.

Someone fearing the education bubble is about to burst?

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Move in the right direction at least. Perhaps they could have an election slogan along the lines of 'f*cking over the young less than the nasty party'. Must be about time for Clegg to step up and promise to abolish fees altogether.

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Had read somewhere Labour were going to introduce a 'graduate tax.' Not sure if that is good or bad to be honest.

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But there's no money left - that's what they said in 2010.

That was before the government (Conservative and LibDem coalition - to remember that the Libdems are actually still part of the government responsible for policies) massively increased the debt.

Edited by billybong

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Tories ramp of tuition fees partially covered the credit hole left by a deleveraging housing market.

Now they've reflated the housing market there's less pressure on the credit created by tuition fees.

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And a refund for the poor sods who've paid 9k a year until it happens?

Massive rise in gap years from this autumn as students wait to see if the fees will come down the year after?

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My initial thought was "how are they going to fund this."

WTF! blink.gif

They are only offering this so graduates can spend more on housing.

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Awesome, more tax burden on the productive people earning decent incomes so that the terminally unproductive can waste 3 years getting a social science degree from a mid-tier university without having to pay the market price.

The Labour plan to move towards a graduate tax makes it even better! A lifelong increase in taxation for those who study worthwhile degrees, to fund sociology majors at Manchester. Brilliant idea.

Edited by Smyth

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Awesome, more tax burden on the productive people earning decent incomes so that the terminally unproductive can waste 3 years getting a social science degree from a mid-tier university without having to pay the market price.

The Labour plan to move towards a graduate tax makes it even better! A lifelong increase in taxation for those who study worthwhile degrees, to fund sociology majors at Manchester. Brilliant idea.

Doing the afternoon shift at Tory HQ (Millbank) this afternoon 'Smyth?'

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Doing the afternoon shift at Tory HQ (Millbank) this afternoon 'Smyth?'

Please give me a succinct summary of why you think its a good idea to increase the tax burden on those doing productive degrees which are likely to lead to decent salaries (engineering, compsci, maths, etc) in order to reduce the amount paid by people doing lifestyle degrees with zero career/social/economic value.

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Please give me a succinct summary of why you think its a good idea to increase the tax burden on those doing productive degrees which are likely to lead to decent salaries (engineering, compsci, maths, etc) in order to reduce the amount paid by people doing lifestyle degrees with zero career/social/economic value.

Isn't this just an argument against progressive income tax?

I'd agree that fewer people should be going to University (50% is way too high), but I'm certainly for progressive taxation.

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This policy cannot be workable without refunding the difference to the last batch paying £9k per year.

The whole thing is a shambles and should be scrapped. I only fear is that the resultant effect will be that graduates have another £150 - £300 per month to stick into a bigger mortgage.

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Please give me a succinct summary of why you think its a good idea to increase the tax burden on those doing productive degrees which are likely to lead to decent salaries (engineering, compsci, maths, etc) in order to reduce the amount paid by people doing lifestyle degrees with zero career/social/economic value.

I have no intention of engaging in such a ridiculously framed debate!

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I'd agree that fewer people should be going to University (50% is way too high), but I'm certainly for progressive taxation.

I was chatting to my mother about the whole higher education bubble and I think the whole situation can be summed up like this:

Back in the early 80's when my mother was paid a grant to attend university the whole process of getting onto a degree course was a highly selective process and the government did not want to wase good money sending people on courses where there was no demand for the graduates.

Once the loan model was brought into play the feedback mechanism was broken, It now did not matter if graduates in a particular field were needed or not.

Under the current loan system it is possible to have thousands of excess graduates whilst training more to do the same courses with no regard for the outcome of that education.

I propose abolishing the entire 'loan' system and replacing it with a grant system which only awards grants for skills that are actually required. Lending this amount amount of money to teenagers at the usury interest rates that are currently charged should also be made illegal or at least allow the young people who were connecd by the system to have their loans discharged via bankruptcy.

Edited by Wurzel Of Highbridge

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Isn't this just an argument against progressive income tax?

I'd agree that fewer people should be going to University (50% is way too high), but I'm certainly for progressive taxation.

We already have a progressive income tax, whacking on another 10% tax for productive people is ridiculous. The UK already engages in enormous transfer payments from the productive to the non-productive in the form of degrees that are literally infinitely expensive (which is what a graduate tax basically implies).

The other problem is deadweight loss - forcing people to consider the cost of their degree means they are more likely to make sensible choice rather than just signing up to do a pointless degree at a low ranked unviersity just because its 'free'.

Edited by Smyth

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We already have a progressive income tax, whacking on another 10% tax for productive people is ridiculous. The UK already engages in enormous transfer payments from the productive to the non-productive in the form of degrees that are literally infinitely expensive (which is what a graduate tax basically implies).

The other problem is deadweight loss - forcing people to consider the cost of their degree means they are more likely to make sensible choice rather than just signing up to do a pointless degree at a low ranked unviersity just because its 'free'.

I am not in favour of a graduate tax. Reduced places, but fully funded should be the model.

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I was chatting to my mother about the whole higher education bubble and I think the whole situation can be summed up like this:

The basic problem is the government continually failing to understand/admit that much of the increased salary that came from having a degree is due to the signalling effect (i.e demonstrating to employers that you are smart enough to pass a degree), as it is about the skills you learn.

So in the past you had a situation where only the academically capable top 10-20% of students went to university, and they obtained degrees which sent a signal to employers saying that they were smart/hard working/whatever, and so they got nice jobs as a result. This meant that there was a correlation between 'having a degree' and 'getting paid a lot', but the causal effect was more subtle than "degrees give you skills which boost salaries". By ignoring this, the government (and the left wing in general) decided that if we started sending 50% of the population to university, this would result in them all getting high salaries. Of course, this cannot be the case - if the value of a degree is partly about demonstrating that you are smarter than your peers, then increasing the number of graduates just means that the companies offering the best jobs will just raise the bar in terms of what they want from graduates. And this is essentially what we are now seeing - the majority of good grad scheme places now go to graduates from the top 10-20 universities, with the rest being frozen out (and at the most competitive level like investment banking/management consultancy/etc there are only really 5 universities which graduates are heavily recruited from). So the signal of 'having a degree' just got replaced with 'having a degree from a top university'.

The problem is, this filtered all the way down. We now have a surplus of graduates from mid/low ranked place who arent getting graduate level jobs, because increasing the number of graduates doesnt magically increase the number of graduate jobs, and these people are not competitve with grads from top universities when it comes to the high paying graduate schemes. So now you have a situation where 'a degree' has become essential for doing jobs which didnt require a degree 20 years ago, just because the surplus of graduates has driven up entry-level standards, and we have so many graduates that employers can be picky and say "graduates only sorry" even when the job clearly doesnt require this.

Its about as pure a case of deadweight loss as you can get. The solution is to close down the bottom 30-40 universities (the UK does not need 120 universities), and restrict funding for non-vocational courses outside the top 30 or so that are left. There is zero political will for this though, because as soon as its brought up you get outrage from idiots about how "subsidising people to get an english lit or sociology degree so they can work in Starbucks is a great idea because society needs more critical thinkers!".

Note: Im not saying that we shouldnt have humanities courses, that would be stupid. The humanities and social sciences do have importance to society, and I dont want to live in a technocratic country. But realistically if you arent good enough to get into a top 20 or so university then the tax payer probably shouldnt be funding you to do study a field which you have almost zero probability of getting a related job in. History and sociology degrees at Oxford are fine - at Plymouth University, not so much.

Edited by Smyth

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Please give me a succinct summary of why you think its a good idea to increase the tax burden on those doing productive degrees which are likely to lead to decent salaries (engineering, compsci, maths, etc) in order to reduce the amount paid by people doing lifestyle degrees with zero career/social/economic value.

Bankers aren't productive.

They're self-evidently destructive.

Maths grads generally aren't 'smart' at all. They just happen to have a maths degree. Most of them end up as bankster trolls on internet forums trying to convince normal people of their self-worth (and failing)

History and sociology degrees at Oxford are fine

dimwits like Cameron and Boris suggest otherwise.

Edited by R K

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History and sociology degrees at Oxford are fine - at Plymouth University, not so much.

Oops nearly slipped up there, very nearly no pay cheque for you this month.

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