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

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    The main problem is people doing "degrees" like golf management, pottery etc get to borrow the same amount as people doing proper degrees, then end up paying none of it back when they end up spending their life working in McDonalds.
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    (Original post by yawn)
    Anyone got anything to say about the economics of it all, and how there is a potential for them to impact negatively on the economy?

    Is anyone interested in debating the conclusions in a mature and meaningful manner, or have we to wait for the intellectual heavies to get home and contribute? :rolleyes:

    Edit: This thread is debating the economics of the fees, not the motivation or opportunities regarding higher education. Please keep to the OP matter. Thank you.
    Obviously, there is the potential for it to end up costing the country more in terms of taxes in the long term future.

    However,the problem is that the Bond markets are not waiting for 20-30 years at the moment.

    Increasing the university fees was never a question of whether it would end up costing more in the future.

    It was a question of what was best to avert a crisis in the next 2-3 years. As you can see each country in Europe is being picked off one by one.
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    (Original post by DorianGrayism)
    It was a question of what was best to avert a crisis in the next 2-3 years.
    How does that make sense when the government won't be saving ANY money at all until the loans at least start being paid back (which will be a lot longer than 3 years away).
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    (Original post by WelshBluebird)
    Also two points.
    1 - Very few degrees actually cost £50k or £100k to run.
    Random google search - http://www.swan.ac.uk/international/...alTuitionFees/

    Even humanities (which are cheapest to teach) from a middle-ranked university cost about £30k in actual cost of tuition, plus according to them a minimum of £16k over three years of living expenses. That's already £46k. Now you have to account for other costs: instead of doing this degree you could have worked, so that's at least £30k of lost earnings (calced at 40hr/week at min wage). That's £76k. And you will pay interest in the £46k, and get your return only over a number of years.

    EDIT: Compare this to a 6 month teacher training course - which could only cost £5k, plus £5k lost earnings, plus £2.5k living expenses for a total £12.5k - comparable to only about 2 years' pay increase as a teacher vs an average non-graduate job, rather than comparable to a second mortgage.

    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.
    The government pays it up front now. In a market system, people would use loans like they do in the US.
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    (Original post by Barden)
    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.



    Well you certainly didn't circa 2008 :teehee:



    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.
    I think that attributing the country being in better shape than the "pigs" to Gordon Brown's genius is just silly really. It's in better shape for lots of reasons. (For a start, how can you ever compare a country that is outside the Eurozone to one that is in it? How can you ever compare the economy of Greece with the UK? It's laughable)

    I'm not saying that Cameron is some new font of wisdom and shining light of economic management whose name is hallowed in the corridors of the IMF. All I am saying is that austerity is what these organizations are calling for. In fact, if you want to borrow their money, they insist on it. Brown's borrow and spend approach gave the country a trillion pound debt - that's just got to be paid back.

    Whether the proverbial belt is too tight or not we will see. But for now, the UK's economic indicators are largely positive aren't they? Is anybody seriously still talking about double dip recession over there? I think not!
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    (Original post by Barden)
    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.

    .
    The only reason why the PIGS are first is because they are part of the Euro and they have weak economies, so they are easiest to pick off. Once they fall, then eventually the problem will reach Britian as well.

    It has nothing to with in which the way they were run during the Financial Crisis.



    (Original post by Barden)
    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..
    Well Brown agreed with Cameron because he also planned to cut the deficit in 4 years. So if you don't agree with Cameron then you don't agree with Brown either.
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    (Original post by Hilux)
    Random google search - http://www.swan.ac.uk/international/...alTuitionFees/

    Even humanities (which are cheapest to teach) from a middle-ranked university cost about £30k in actual cost of tuition, plus according to them a minimum of £16k over three years of living expenses. That's already £46k. Now you have to account for other costs: instead of doing this degree you could have worked, so that's at least £30k of lost earnings (calced at 40hr/week at min wage). That's £76k. And you will pay interest in the £46k, and get your return only over a number of years.

    EDIT: Compare this to a 6 month teacher training course - which could only cost £5k, plus £5k lost earnings, plus £2.5k living expenses for a total £12.5k - comparable to only about 2 years' pay increase as a teacher vs an average non-graduate job, rather than comparable to a second mortgage.


    The government pays it up front now. In a market system, people would use loans like they do in the US.
    1 - 30k in tuition. Exactly. No where near 50k or 100k. Also you will find that the actual costs to the uni of supplying that degree is a lot less, because unis use fees from humanities (and other "cheaper subjects") to subsidize the more expensive science degrees.

    2 - The government pays it up front now because we are not talking £50k or more. There is no way the government could afford to fork out that money. As for loans like the Americans - so you want people to be forced into a life of debt? The american system is horrible and promotes elitism and class divisions.

    I'm sorry, but there is no way you can argue a fully unsubsidised system would be better. Less money would be generated for the treasury (as we would have less high tax payers) and the majority of students would end up being the kids of rich people who can afford to pay their childs fees.
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    (Original post by WelshBluebird)
    How does that make sense when the government won't be saving ANY money at all until the loans at least start being paid back (which will be a lot longer than 3 years away).
    Because it isn't about saving money in the next 3 years.

    It is about providing the Bond Markets with confidence that you can pay your money back without diminishing their returns substantially in the future. If they don't think you can do that, then they can turn on you very quickly.
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    (Original post by DorianGrayism)


    Well Brown agreed with Cameron because he also planned to cut the deficit in 4 years. So if you don't agree with Cameron then you don't agree with Brown either.

    He planned to cut it in half, not wipe it out.
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    (Original post by WelshBluebird)
    1 - 30k in tuition. Exactly. No where near 50k or 100k. Also you will find that the actual costs to the uni of supplying that degree is a lot less, because unis use fees from humanities (and other "cheaper subjects") to subsidize the more expensive science degrees.
    Tuition isn't the entirety of the cost - and £30k will easily run over £50k when paid off with interest.

    2 - The government pays it up front now because we are not talking £50k or more. There is no way the government could afford to fork out that money. As for loans like the Americans - so you want people to be forced into a life of debt? The american system is horrible and promotes elitism and class divisions.
    This is the actual cost, determined by the physical reality that buildings cannot be constructed for nothing, and people will not work for nothing. This is the cost regardless of whether it's paid by individuals or indirectly through governments. Up until now the government has been funding it using sovereign debt for which taxpayers are liable. It has decided that this is unaffordable and this is why it is trying to increase the amount paid by students.

    I'm sorry, but there is no way you can argue a fully unsubsidised system would be better. Less money would be generated for the treasury (as we would have less high tax payers) and the majority of students would end up being the kids of rich people who can afford to pay their childs fees.
    I'm not sure how else to explain something that is on the level of 1 + 1 = 2.

    There are two important numbers: the cost of education and the return on education. If the cost is less than the return, you don't need to subsidise. If the return is less than the cost, you don't want to. This is independent of parental income - even if you can afford to take a degree that will lose you money, you're still not obtaining any benefit from it in terms of increased future salary.

    At the moment the system subsidises two groups:

    - Students in general, at the expense of non-students, as everyone is taxed while only students receive the benefits. This is regressive overall.

    - Students doing less useful courses in particular at the expense of students doing more useful courses. This does not affect income inequality because students who can afford university only due to subsidy are precisely those whose income increases less as a result of having obtained a degree than the degree cost! The government would literally be better off giving them the cash difference as a one-off benefit payment, and this would actually be far cheaper.
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    (Original post by Howard)
    But for now, the UK's economic indicators are largely positive aren't they?
    The unemployment rate has increased in the last three months...following the election in fact.

    The rise in the number of jobless was almost entirely driven by the public sector, where employment fell 33,000, according to the ONS's latest monthly labour market report.

    However, the private sector failed to take up the additional slack, with employment remaining unchanged.

    The government is relying on private sector job creation to offset an estimated 330,000 public sector redundancies over the next four years due to government austerity measures.

    But David Birne, insolvency practitioner at accountants HW Fisher, describes this view as being out of touch with what is happening on the ground.

    "For the UK's businesses and their employees, 2011 is shaping up to be harsher than any of the past three years," said Mr Birne.

    The ONS statistical release reads as if it was scripted by the Grinch who stole Christmas”

    Dr John Philpott Chartered Institute of Personnel and Development

    * Repossessions to rise say lenders

    "This time next year we expect unemployment to be considerably higher than it is at present, as many more of Britain's companies go to the wall. We deal with companies of every size and from every sector day in, day out and for a large chunk of them things are looking very bleak indeed."
    http://www.bbc.co.uk/news/business-11998364

    Knock-on effects, everyone?

    But I expect you know all this, Howie...seeing as how you always keep your finger on the pulse of Britain's business.
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    (Original post by WelshBluebird)
    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.
    You don't have to pay it upfront. It's covered by a student loan right? And you pay the loan back after your earning £21,000.
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    (Original post by yawn)
    The unemployment rate has increased in the last three months...following the election in fact.

    http://www.bbc.co.uk/news/business-11998364
    Is three months long enough to solve unemployment? Besides I imagine lots of unemployment is due to cuts. Which unfortunately (in the eyes of a tory :L) are necessary.
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    (Original post by S129439)
    Is three months long enough to solve unemployment? Besides I imagine lots of unemployment is due to cuts. Which unfortunately (in the eyes of a tory :L) are necessary.
    I've edited my post whilst you were writing this. Have a look again. That's the whole point....cuts cause unemployment which cause more drain on the public purse.
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    (Original post by S129439)
    You don't have to pay it upfront. It's covered by a student loan right? And you pay the loan back after your earning £21,000.
    I know that is the case now.
    But Hilux wants all students to pay the full cost of their degree.
    In which case the government would not be able to afford to give a student loan for all of it.

    (Original post by Hilux)

    - Students in general, at the expense of non-students, as everyone is taxed while only students receive the benefits. This is regressive overall.
    But that is where you are wrong.
    The student does benefit, but as does the rest of society and the economy.
    You cannot actually argue that engineering, science etc do not benefit society.
    You seem to be heavily blinkered by money. Perhaps that is what is wrong with this country.
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    (Original post by yawn)
    The unemployment rate has increased in the last three months...following the election in fact.



    http://www.bbc.co.uk/news/business-11998364

    Knock-on effects, everyone?

    But I expect you know all this, Howie...seeing as how you always keep your finger on the pulse of Britain's business.
    You know it Yawn!

    But job growth always lags and does odd things. Long after recessions officially end you still sometimes see surges in job losses. Public sector job losses (35,000 in 3 months) are hardly a surprise since we all knew that the Coalition were about to embark in public sector spending curtailment and that is obviously going to lead to job losses. And, here in the US unemployment remains stubbornly set at close to 10% but we're making a lot of headway in other areas - nobody is using the R word anymore. So I'm not going to use unemployment as an economic indicator.

    What about other factors Yawn?

    Growth? Inflation? What's happening on in the markets? Manufacturers indices? Inventories? Same store sales figures? Business confidence rates?

    Forgive me if my finger has slipped briefly from the pulse but I understood that most of the news here was largely positive and pointed towards a progressive and steady-as-she-goes recovery for the UK, not a return to recession.
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    (Original post by Hilux)
    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.
    Again, you seem to be unable to understand the difference between benefits to individuals and benefits to society. Putting £100k in a fund might maximise the benefit to an individual. Subsidising the access to education benefits individuals and greater society. One is worthy of public funds, the other is not.

    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.
    By the measures I listed. There is nothing subjective in them at all. Graduates on average smoke and drink less, fact. They are less likely to fall seriously ill as a result of preventable diseases, fact. The result of theses objective truths is a very real reduction in the burden of NHS costs as a result of a more educated populace. No amount of accusations of snobbery will hide the truth.

    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.
    Another schoolboy error - correlation does not imply causation. Clearly whilst there may be a correlation between speedboat ownership and health, it is ridiculous to state that this is due to a causative effect. On the other hand, there is plenty of evidence to suggest that education has a positive effect on health.
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    (Original post by yawn)
    I've edited my post whilst you were writing this. Have a look again. That's the whole point....cuts cause unemployment which cause more drain on the public purse.
    Less drain actually.

    Public sector jobs are funded through taxes. No disrespect Yawn but it would be far cheaper to lay you off and pay you unemployment than to continue employing you.
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    (Original post by Barden)
    Like your good self, obviously...

    'You have reached the limit of how many posts you can rate today!'

    :zomg:
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    (Original post by Howard)
    Less drain actually.

    Public sector jobs are funded through taxes. No disrespect Yawn but it would be far cheaper to lay you off and pay you unemployment than to continue employing you.
    I don't work for the public sector Howie. And I'm far too valuable to my employer to ever be considered for 'laying off.'

    Your point though is not entirely true. If one doesn't balance the numbers to be 'laid off' very carefully, then the costs to the public purse would far exceed any perceived savings. It could have disastrous effects on health, education, benefit payments, law and order and central and local government...all of which come within the sphere of public sector jobs.
 
 
 
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