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

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    I haven't seen this aspect debated on this forum, so here goes.

    The Higher Education Policy Institute [HEPI] has studied the coalitions actions on increasing student fees from £3,000+ up to £9,000 and has concluded that the increase could end up costing more than it is saving for the tax payers.

    Tuition fees change could cost public money, says study

    Changes made by the government to university tuition fees in England are as likely to cost public money as save it, experts say.


    The Higher Education Policy Institute (Hepi) re-evaluated the plans in light of concessions made shortly before MPs voted in favour of raising annual fees to up to £9,000.


    It concluded that if any savings were made, they would be marginal.
    The government said the reforms were fair and "affordable for the nation".
    Hepi re-examined government plans to change England's higher education system, which involve removing the teaching grant and replacing it with higher fees for students, after MPs voted through the controversial move last week.
    Fees would rise from about £3,000 a year to a maximum of £9,000. Students could take out government-funded loans which they would start to pay back once they earned £21,000.


    One of the concessions was to annually increase the £21,000 repayment threshold, rather than every five years, as had been planned.


    'No savings'
    Hepi said the annual uprating of the threshold "will add substantially to the cost, and we have calculated that on the basis of this further concession alone the government's assumed savings will be wiped out if graduate earnings increase by 3.75% per year instead of 4.47%. "That is to say that if the earnings increase falls short of the government's assumptions by just 16%, there will be no savings."

    It had said that the government's proposals were "extremely sensitive" to assumptions about future graduate earnings.




    "Our student and university finance reforms are fairer than the present system and affordable for the nation” (Department for Business, Innovation and Skills Spokesma)
    "And for that reason we think it would be wise to assume that savings, if any, will be marginal, and indeed that the government's new proposals are as likely to cost as to save public money," it said on Tuesday.


    The government has assumed that universities will charge an average of £7,200, but Hepi said that without any controls to keep fees at the lower end of the scale, it was still possible that the average fee would be "considerably higher" than the government had allowed.


    "This makes a large difference to the cost and savings that the government can expect, because the higher the level of the fee that is charged, the greater the loans that will be required, and because the loans are subsidised, the greater the cost to the government," it said.



    http://www.bbc.co.uk/news/education-11989773


    Mods: Might it be a good idea, since there are so many threads about Student fees increases and associated matters, to sticky a new sub-forum to keep the place a bit tidier and more organised?
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    And eating your own weight in crisps might help you lose weight. But probably not...
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    Exactly what I've been saying for the last few weeks.
    This has nothing to do with the deficit, and everything to do with political ideology from the Tories.
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    at the end of the day, im sure you can find a study that proves just about anything you want.

    hence why everything causes cancer according to the daily mail.
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    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.
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    (Original post by Square)
    at the end of the day, im sure you can find a study that proves just about anything you want.

    hence why everything causes cancer according to the daily mail.
    This is a study from HEPI. Do you know exactly what they do and are responsible for?
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    Debt should never expire

    /large amount problem.
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      Surely this opens up the argument that the repayment methods are too generous because of things like debts being cleared after 30 years, or the threshold being raised to 21k and rising in line with inflation etc. Plus the fact that interest rates on the debts are subsidised by the taxpayer.

      I agree with shifting payment of tuition fees away from the taxpayer and towards successful graduates. The problems come in when the graduates don't actually need to pay much or any of it back and the taxpayers have to pick up the tab.

      Really this is speculation either way, it depends on how much Unis tend to charge, how many go to Uni, how many have to pay back their debts etc. But I do think its good for market forces to be operating more in higher education, since competition drives up the quality of service.
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      I heard this, and the conclusions make sense. Increasing tuition fees is going to do very little to reduce the deficit, and is just part of wider measures to move towards a privatised university system. Interestingly, one article I read suggested that tackling tax dodging among big companies like Arcadia would be a far more effective way of reducing the deficit without the need for such substantial cuts.
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      (Original post by WelshBluebird)
      Exactly what I've been saying for the last few weeks.
      This has nothing to do with the deficit, and everything to do with political ideology from the Tories.
      So what there idelogy is the greater. Its proven the world over.


      Im glad less poor people will be there maybe universty will be for those with class!
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      (Original post by Dave Davidson)
      So what there idelogy is the greater. Its proven the world over.


      Im glad less poor people will be there maybe universty will be for those with class!
      Where has it been proven exactly? Take healthcare as an example, privatised healthcare doesn't work. Privatisation is not the solution, and that's what the eventual aim is here, which would be completely wrong and a betrayal of what past governments worked so hard to achieve.
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      (Original post by Dave Davidson)
      Typical communist. Murderer
      No no, not murder. Just unbarable pain, which cannot be treated by the local NHS walkin due to today's unfortunate new measures. Love this big society!
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      then hopefully they'll let more EU people in nah jk (a girl can still dream since I'm applying for such a competitive course) but maybe they wont increase fees for every course?
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      Either it costs the tax payer more or it costs us more, it can't do both unless much more money goes to the uni's; money has to go somewhere! What it may be doing is costing well off graduates a lot more while saving all the people earning sub-21k an amount which cancels this out. If it is going to cost the tax-payers more as this study suggests then all the socialists should be over the moon as it essentially means the rich are paying for the same education that the poor get for free. I do struggle to see how it could cost more though, unless the unis are getting more money out of it which would be good.
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      (Original post by crazylemon)
      Debt should never expire

      /large amount problem.
      But thats not whats being introduced. Way to spectacularly miss the point.
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      (Original post by aeonflux)
      But thats not whats being introduced. Way to spectacularly miss the point.
      I wasn't addressing that, there is no point.
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      (Original post by WelshBluebird)
      Exactly what I've been saying for the last few weeks.
      This has nothing to do with the deficit, and everything to do with political ideology from the Tories..........
      ............and a complete abandonment of political ideology from the Liberal Dems I note.

      Though in fairness, it was Labour that introduced fees, and presided over the first increase. And, were Labour in office today, they'd be doing the same thing so it's really a bit disingenius to wrap this up as Tory ideology.
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      (Original post by crazylemon)
      I wasn't addressing that, there is no point.
      If you have no point, it makes sense not to post in a forum for serious debate and discussion.
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      (Original post by WelshBluebird)
      Scalped? Hardly. I think its pretty obvious you are a troll now. Your just trying too hard.



      The Lib dems are just the Tories toys right now. I realise they are in coalition, but they seem to have abondoned pretty much everything they stood for before the election.

      As for Labour, there is a huge difference in fees of £3000 and fees of £9000, and there is a huge difference in bringing in fees to add to government funding, and increasing them to replace government funding. While nobody can say what they would do if they were in government, I seriously doubt they would be increasing them by so much. Upto £5000 I could handle. But trebling them to £9000 is just wrong.
      Well, I'm opposed to fees full stop. But I think you're wrong to blame the Tories for this. It's a Coalition government that have just voted in favor of these measures and the ideology itself belongs to the Labour Party as much as anybody else.

      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.
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      Agree to disagree then. Although it is a coalition, it is mostly Tory.

      As for the last bit, I wouldn't say its discrmination. Its not the governments fault the WAG and the Scottish Parliament have decided to pay the higher costs for their students so fees will effectivly stay as they are. I don't try to claim discrmination becuause I get £1000 a year less in grant / loan from the SLC just because I'm from Wales.
     
     
     
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