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Increasing students fees may cost the country more money than it saves! Watch

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    (Original post by Howard)
    No need to roll your eyes at me sonny boy.

    Yes, they certainly did maintain a high level of public spending. This probably has something to do with the 900billion pound debt that the Tories are now trying to reduce.

    Labour didn't bring the UK out or recession any more than Democrats brought the US out of recession. Recessions run their course. The recession was global and cyclical - the UK came out in spite of, rather than because of, anything that Labour did.

    So why is it that the Tories are now able to put the recovery at risk with their overzealous austerity program, if governmental policy is irrelevant? Why is it that Brown was praised by the IMF, the World Bank and leaders the world over for how he handled the recession, and why is it that these institutions and leaders agreed with his plans for if he served another term?
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    "if the earnings increase falls short of the government's assumptions by just 16%, there will be no savings".

    Yeah, and if my company's earnings fell short of assumptions by "just" 16% each year, they'd go bankrupt.

    (Original post by Howard)
    As a brief aside, the biggest insult to my my mind is the blatent discrimination against the English students while the Scots and Welsh are unaffected.
    It's a devolved issue - you might as well argue that it's discriminatory that the French have a different educational system.

    Plus, due to the Barnett formula, cuts in government funding for higher education certainly do affect Scotland and Wales, who will consequently see a decline in their devolved assemblies' budgets.
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    (Original post by Hilux)
    Agreed - the fees should simply be the market rate of interest on the market cost of the education. Any subsidy is pretty much impossible to justify: either the degree will pay itself back and more, in which case any subsidy is inherently regressive, or the degree will not pay itself back, in which case they shouldn't do the degree.
    So I'm guessing you want a society with no teachers or the like then?
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    (Original post by WelshBluebird)
    So I'm guessing you want a society with no teachers or the like then?
    Perhaps you are guessing that. Emphasis on guessing.
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    (Original post by Hilux)
    Perhaps you are guessing that. Emphasis on guessing.
    I think its a pretty reasonable guess.
    Most teachers will earn nowhere near enough to make paying £9k a year for their degree worthwhile.
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    (Original post by Hilux)
    Perhaps you are guessing that. Emphasis on guessing.
    I may agree to some extent with what you said first, but that answer is extremely obtuse.
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    (Original post by Barden)
    So why is it that the Tories are now able to put the recovery at risk with their overzealous austerity program, if governmental policy is irrelevant? Why is it that Brown was praised by the IMF, the World Bank and leaders the world over for how he handled the recession, and why is it that these institutions and leaders agreed with his plans for if he served another term?
    I beg your pardon?

    I think you'll find that he leaders of the IMF, the European Central Bank, and other such organizations all agree that austerity measures are absolutely necessary. In fact, they have attached such conditions to the bailout of Greece, Ireland, Portugal (and very soon Spain) NOBODY is championing a continuation of borrrowed excess.

    Really, don't you watch the news?

    The Coalition Government's measures (remember, you have a "Coalition" government, not a "Tory" one) are not endangering the recovery. In my opinion, what they are doing is absolutely necessary and if anything, the measures they are taking will bolster business confidence and stimulate the economy in the longer term. You can't continue spending more than you earn - it's that simple. And nobody wants to buy bonds or invest in a country as indebted as the one Labour left you with.

    Now, as to whether the Coalition are cutting in the right places - well, that's a completely different topic and we'll all have different views based on our social perspectives. But to deny a period of belt-tightening is needed is to bury your head in the sand and make like an ostrich.
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    (Original post by WelshBluebird)
    I think its a pretty reasonable guess.
    Most teachers will earn nowhere near enough to make paying £9k a year for their degree worthwhile.
    £9k isn't the market rate, just some other arbitrary cap. International fees are the market rate, and then you need to account for the interest. Real cost is probably of the order of ~£50,000-100,000, which is similar to the average lifetime increase in income. A good indicator that subsiding education has pushed as way past the point of diminishing returns, with around half of students looking at losing money on their degree.

    Can people pay £50-100k? Yes. Most people will get a mortgage for about that during their lives. Almost all professionals will.

    Would they want to? Arguably - there are two options here:

    1. Pay teachers more. Since this comes from the govt budget just like the fees money, it doesn't actually cost more, it's just shifted. And you eliminate all the people doing low return on investment degrees who actually wouldn't be teachers - which is the majority.

    2. Remove degree requirements for teachers. Not that I'm in to central planning, so it's only a guess, but this is the one I'd go for if I had to guess. As a third year physicist there is nothing in my degree that is required to teach A level, let alone GCSE (which pretty much anyone could self-teach with a book and a few mark schemes). A six month primer course would be about the limit, and far cheaper. Maybe it's different in essay subjects - but these are the least useful anyway.
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    (Original post by air-ninety-one)
    you are wrong. i'm so happy that tuition fees are increasing. it means poor students wont go to uni. thank god. uni's are filled with scum people these days
    NO U
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    (Original post by L i b)
    I may agree to some extent with what you said first, but that answer is extremely obtuse.
    Ok, but it's also a pretty obtuse question. It's quite obvious that no one wants "a society without teachers".
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    (Original post by Hilux)
    Agreed - the fees should simply be the market rate of interest on the market cost of the education. Any subsidy is pretty much impossible to justify: either the degree will pay itself back and more, in which case any subsidy is inherently regressive, or the degree will not pay itself back, in which case they shouldn't do the degree.
    Subsidies become extremely easy to justify when you consider two things:

    Firstly, that the average graduate earn far more (papers I have read estimate it to be in the order of £250,000) over a lifetime than school leavers with just a-levels. At a 40% tax rate this is in the order of £80,000 extra paid to the treasury by a graduate - and that is just based on direct taxes. This is far more than the cost of a degree. Graduates already pay back the cost of their degree in taxes - the current system merely penalises successful graduates by making them pay twice, driving talent abroad.

    Secondly, education is a merit good. Numerous studies have been conducted showing the benefits of a higher educated populace range from everything from less heart disease to higher voter participation. In this respect, there is, if anything more justification in subsiding education than there is in subsidising healthcare, although I doubt you would argue for the privatisation of hospitals.
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    (Original post by loafer)
    except that Labour introduced tuition fees, and were openly planning gigantic HE cuts themselves.

    http://www.guardian.co.uk/education/...cuts-recession

    Something called economic reality, even Labour had to face it some of the time.
    There is a huge difference between asking the student to contribute an amount to their degree, and asking the student to pay for the majority of the degree. £3000 o £9000 is a huge increase.
    As I have said, I seriously doubt Labour would have increased tuition fees by 300%.

    Also, just a note. Other countries (even in the eurozone) are increasing the funding of their universities because they know it will pay off in the future.
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    (Original post by Hilux)
    2. Remove degree requirements for teachers.
    I certainly would not want to be taught A levels by someone who does not have a degree.
    For anything below GCSE I would agree with you, but after that then no.

    And if you really think we should charge the market rate, then you are crazy. Can you not see that people going to university helps our economy?

    As for your comparison to a mortgage, again, I have to ask are you crazy. You seem to say because most people can afford a mortgage, then they can also afford to pay back £50,000 extra. Where does that thinking come from?

    And if you want to charge the same amount for a degree as a person would get back in increased wages throughout their lifetime, then what would be the point of a degree :confused:
    In any case that would be bad, as it wold lead to a huge decrease in the amount of people going to uni (I mean huge), meaning less people would earn higher wages, and so less people would pay higher taxes, meaning less money for the treasury.
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    (Original post by aeonflux)
    Subsidies become extremely easy to justify when you consider two things:

    Firstly, that the average graduate earn far more (papers I have read estimate it to be in the order of £250,000) over a lifetime than school leavers with just a-levels.
    How does that justify a subsidy? If I make money by doing a degree, I would do it anyway. Should we subsidise people who want to start businesses, or who want to invest money in mutual funds? If so, where does this money come from? (It comes from taxing other profitable activities.)

    Now I might agree that, if all degrees made a profit, the subsidy is at least not that harmful. It wastes money administering a system whereby people are paid to do something at Point A, then taxed the money back at Point B, but no more than that. However it's the average student who is profitable, not every individual student. The subsidy is actually greatest for people doing the least useful courses - because they receive all the funds at Point A, but never obtain the income that results in them being taxed the money back at Point B. The whole fees system is an attempt at a sort of half-way house, but why stop half way? We don't want people doing degrees that are worth less than they cost: so why subsidise it?

    Secondly, education is a merit good. Numerous studies have been conducted showing the benefits of a higher educated populace range from everything from less heart disease to higher voter participation. In this respect, there is, if anything more justification in subsiding education than there is in subsidising healthcare, although I doubt you would argue for the privatisation of hospitals.
    Not at all: we subsidise healthcare because we don't want people to die. But a degree that costs more than it increases the student's income is a pure luxury good. You might as well subsidise speedboats.
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    (Original post by WelshBluebird)
    I certainly would not want to be taught A levels by someone who does not have a degree.
    Why? It is what we do and what we have always done (if by always you mean the last few decades), but teaching A level only requires knowledge of the A level course content. Since degrees in the UK assume A level knowledge they are by definition mostly irrelevant. A dedicated teacher training programme would require far less time and money.

    And if you really think we should charge the market rate, then you are crazy. Can you not see that people going to university helps our economy?

    etc
    Only when the return on investment is greater than the market cost. Degrees that lose money harm the economy. Subsidies only promote the second type.

    Replace degree with any other type of investment here. Say that I open a business that will make me £100k over might lifetime. If it costs more than £100k in net present value to start the business, it's not worth it. If it costs less, it is. Not many people would favour subsidising entrepreneurs to open businesses that lose money.
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    (Original post by Hilux)
    How does that justify a subsidy? If I make money by doing a degree, I would do it anyway.
    Because if you charge £50,000 or more for a degree (which by the way is a disgusting idea) then less people will do a degree. Less people will end up higher earners, and so less people will pay higher tax rates. Meaning less money for the government.

    Your comparisons to other things fail because a university education not only benefits the student, but benefits employers and benefits society.
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    (Original post by Hilux)
    How does that justify a subsidy? If I make money by doing a degree, I would do it anyway. Should we subsidise people who want to start businesses, or who want to invest money in mutual funds? If so, where does this money come from? (It comes from taxing other profitable activities.)
    We should subsidise merit goods, and we already do for many of those things. In my holidays I work for a small local business, and have had frequent discussions with my boss who benefits from tax breaks and other government benefits for small businesses. These benefits benefit him, obviously, but they also benefit the country and the community to a large enough extent for the government to feel they warrant a subsidy. Obviously the same cannot be said for mutual funds so we do not subsidise these things. Its a pretty simple concept.

    Now I might agree that, if all degrees made a profit, the subsidy is at least not that harmful. It wastes money administering a system whereby people are paid to do something at Point A, then taxed the money back at Point B, but no more than that. However it's the average student who is profitable, not every individual student. The subsidy is actually greatest for people doing the least useful courses - because they receive all the funds at Point A, but never obtain the income that results in them being taxed the money back at Point B. The whole fees system is an attempt at a sort of half-way house, but why stop half way? We don't want people doing degrees that are worth less than they cost: so why subsidise it?
    This highlights the third fallacy in your argument - that a degree is a financial investment, nothing more. But education is far more than that - an English major may not earn considerably more than, say, a plumber, but they will, on average, contribute more to society in the other ways I have mentioned, ie. they will be more politically active, be healthier and cost less in NHS treatment, play a more active role in the local community, etc., etc.


    Not at all: we subsidise healthcare because we don't want people to die. But a degree that costs more than it increases the student's income is a pure luxury good. You might as well subsidise speedboats.
    Nice attempt at a strawman, but speedboats don't provide any of the non-economic benefits of a degree I have already been through. Incidentally, neither does healthcare, but as I predicted, you are quick to defend public spending on that.



    The point that you seem to be missing is that benefits for an individual and benefits for society are not mutually exclusive. If something benefits society as much as education does, it should be subsidised to encourage it in the same way tobacco is taxed to discourage it. And if the individual happens to benefit as well, so what? Reeks of jealously to me personally.
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    Also two points.
    1 - Very few degrees actually cost £50k or £100k to run.
    2 - Where would that money come from? Very few people could afford to pay it upfront, the government wouldn't be able to afford it upfront, and the universities themselves wouldn't be able to afford to wait the entire lifetime of the student to get all the money back.
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    (Original post by aeonflux)
    We should, and we already do many of those things. In my holidays I work for a small local business, and have had frequent discussions with my boss who benefits from tax breaks and other government benefits for small businesses. These benefits benefit him, obviously, but they also benefit the country and the community to large enough extent for the government to feel they warrant a subsidy. Obviously the same cannot be said for mutual funds so we do not subsidise these things. Its a pretty simple concept.
    Things are subsidised to the extent that they appeal to peoples' emotions. The emotional appeal of mutual funds is much less than that of higher education, but if what people care about is actually increasing total future earnings and reducing income inequality, they'd do a lot better putting the £100k in a mutual fund and giving it to poor people than subsidising their access to a lot of university courses.

    This highlights the third fallacy in your argument - that a degree is a financial investment, nothing more. But education is far more than that - an English major may not earn considerably more than, say, a plumber, but they will, on average, contribute more to society in the other ways I have mentioned, ie. they will be more politically, etc., etc.
    By what measure? This is little more than intellectual snobbery. I personally feel I would gain more use from well-maintained plumbing than from some stranger having studied literature - and the plumber at least won't take my money without my agreement.

    Nice attempt at a strawman, but speedboats don't provide any of the non-economic benefits of a degree I have already been through. Incidentally, neither does healthcare, but as I predicted, you are quick to defend public spending on that.
    Speedboats are fun. I'd also bet that people who own them are healthier and more politically engaged than people who do not, on average. The advantage of subsidising healthcare is to prevent poor people dying, which is (in my view, at least), far more valuable than increasing voter participation.
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    (Original post by Howard)
    I beg your pardon?

    I think you'll find that he leaders of the IMF, the European Central Bank, and other such organizations all agree that austerity measures are absolutely necessary. In fact, they have attached such conditions to the bailout of Greece, Ireland, Portugal (and very soon Spain) NOBODY is championing a continuation of borrrowed excess.
    To say that the rest of the world agrees with Cameron is just bull****.

    I'm not championing excessive borrowing either, and I'm not saying that anyone else is. You've missed the point.

    I think the fact that we are not in the same position as the PIGS speaks volumes about how Brown handled things.

    Really, don't you watch the news?
    Well you certainly didn't circa 2008 :teehee:

    But to deny a period of belt-tightening is needed is to bury your head in the sand and make like an ostrich.
    Neither I, nor anybody else is doing so. I am merely questioning whether this is the time to do so, and why the proverbial belt is being made unnecessarily tight.
 
 
 
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