Hey there! Sign in to join this conversationNew here? Join for free
    • Thread Starter
    Offline

    14
    ReputationRep:
    Can someone please clear this up for me?

    There are 3 interested parties in the fees changes - the student, the government and the universities.


    The student - most students don't want the change and believe they will be worse off.


    The government - experts say that the changes won't save any taxpayer money and could cost more taxpayer money than the previous system. http://www.bbc.co.uk/news/education-11989773


    The universities - because of teaching grant cuts, the universities will not see their funding gap shrink. http://www.bbc.co.uk/news/education-11642373


    So who is gaining anything?
    Offline

    1
    ReputationRep:
    The grants you normally got would go higher.
    You wouldn't have to pay any debt you are in after 30 years.
    Offline

    1
    ReputationRep:
    And that is a question we all want Cleggeron to answer my friend. :nopity:
    Offline

    2
    ReputationRep:
    *sigh*
    Offline

    1
    ReputationRep:
    Students - They don't have to pay back any money until they earn + £21,000 i.e they don't pay any money until they're in a far more financially stable situation than the old system. Yes you pay back more money, but you pay it back in a much safer and easier way.

    The Government - In the long term students are paying more of their fees, so I presume the government has to contribute less money to higher education. (I know you said experts say it could cost more, but I'd take that with a pinch of salt)
    • Thread Starter
    Offline

    14
    ReputationRep:
    (Original post by tieyourmotherdown)
    Students - They don't have to pay back any money until they earn + £21,000 i.e they don't pay any money until they're in a far more financially stable situation than the old system. Yes you pay back more money, but you pay it back in a much safer and easier way.

    The Government - In the long term students are paying more of their fees, so I presume the government has to contribute less money to higher education. (I know you said experts say it could cost more, but I'd take that with a pinch of salt)
    OK so on the first point, I can see that some students might be better off in some ways. In terms of how much they pay back they are worse off, but in terms of the impact on their living standards at any instant they are better off. But graduates who quickly get salaries way beyond the threshold will be worse off.

    On the second point, it doesn't really matter if the government is paying less to higher education if they are tying more of their money up in students. Their balance sheet might look healthier because they have loaned out more money but spent less (due to teaching grant cuts), but at any instant in the future there will be a load of government money tied up in students that they can't therefore spend on hospitals and roads. Every year they get some of it paid back to them but they also pay out a whole load more. On top of that, they write off loans after 30 years (I think) so they won't get all their money back. They will also raise the threshold for paying back every year, so if graduate salaries don't rise as quickly as expected then that will be more money the government doesn't recover.
    Offline

    1
    ReputationRep:
    (Original post by paddyman4)
    OK so on the first point, I can see that some students might be better off in some ways. In terms of how much they pay back they are worse off, but in terms of the impact on their living standards at any instant they are better off. But graduates who quickly get salaries way beyond the threshold will be worse off.
    Yes but they are a minority of students. I know we should use a system that has the same rules for all in an ideal world, but ultimately the newer system does make the system of paying it back easier for the majority of students. I know it's really utilitarian, but I think it makes sense (From my point of view).

    On the second point, it doesn't really matter if the government is paying less to higher education if they are tying more of their money up in students. Their balance sheet might look healthier because they have loaned out more money but spent less (due to teaching grant cuts), but at any instant in the future there will be a load of government money tied up in students that they can't therefore spend on hospitals and roads. Every year they get some of it paid back to them but they also pay out a whole load more. On top of that, they write off loans after 30 years (I think) so they won't get all their money back. They will also raise the threshold for paying back every year, so if graduate salaries don't rise as quickly as expected then that will be more money the government doesn't recover.
    I'm not gonna argue with this point, because I was kind of clutching at straws with my government point, and I'm fully aware
    Offline

    0
    ReputationRep:
    (Original post by paddyman4)
    Can someone please clear this up for me?

    There are 3 interested parties in the fees changes - the student, the government and the universities.


    The student - most students don't want the change and believe they will be worse off.


    The government - experts say that the changes won't save any taxpayer money and could cost more taxpayer money than the previous system. http://www.bbc.co.uk/news/education-11989773


    The universities - because of teaching grant cuts, the universities will not see their funding gap shrink. http://www.bbc.co.uk/news/education-11642373


    So who is gaining anything?
    The student

    • Will have to pay more debt
    • Will have to pay off more interest as interest compounds quicker on a larger sum
    • Will more than likely be crippled with debt for life
    • Will have the £9000 paid up front by the taxpayer, then some will pay back after graduation depending on salary.


    The universities

    • Will get more funding - some have said this is not the case when it clearly is. The increase in fee's far surpasses the cuts to government funding.
    • Top universities will be raking it in whilst those lower down the table are likely to either close or merge.


    The government

    • Will pay less in government funding to the universities (taxpayers money)
    • Will then use that money in other sectors whilst claiming they are cutting into the deficit.


    The taxpayer

    • Will have to pay more initially to fund students educations as the total loans taken out will be much higher and will more than cover the average cost a course in the UK, plus government funding which is essentially taxpayers money will be paid on top of that.
    • Whereas now they only initially have to fork out for loans of £25,000 they may under the new system have to cover loans of upto £50,000 per student.



    Overall Summary

    • The government are the only real ones that get what they want as well as some universities - the top ones that will charge the top costs to increase funding.
    • Universities is 50/50 - some will benefit as some lower down the academic ranking will struggle unless more funding is provided at times of hard ship.
    • Taxpayers will essentially pay more to cover the higher loans taken out and less graduates will pay back as the threshold has been raised.
    • Students that do get good graduate jobs will suffer with a mountain of debt and interest whilst those that are on low incomes do not pay back into the system they took from. Therefore, those that do Mickey Mouse degrees are unlikely to repay the costs to the taxpayer for their education.
    Offline

    2
    ReputationRep:
    Big business benefits, though I'm not sure how, I haven't worked that out yet.
    Offline

    0
    ReputationRep:
    (Original post by jb9191)
    The government

    • Will pay less in government funding to the universities (taxpayers money)
    • Will then use that money in other sectors whilst claiming they are cutting into the deficit.
    But they're going to be loaning out three times as much money per student as they do now, that's not going to start coming back for several years and is never going to be fully paid off (or even mostly paid off) for the majority of graduates. So all that money that was going to the Universities is now going to the students via the loan, and then on to the Universities in tuition fees. The government are just fiddling the books & changing the type of debt they have so it doesn't look as bad. In a few years it'll get a bit better but it has no effect on the defecit here & now which is why they're professing to need these cuts.
    Offline

    12
    ReputationRep:
    In the long run, the taxpayer benefits due to more of the burden being placed on the student. The poorest ~25-30% of graduates are also made better off over their lifetime. In the short run, many students will be better off (in cash terms at university). Universities may well benefit if they can charge a £9k fee and it more than makes up for the funding lost from the teaching grants.

    You can't consistently claim both that the taxpayer will be made worse off in the short run due to paying the up-front £9k fee and that universities will be worse off due to the teaching budget grant exceeding the money made from increased fees. The government shifting spending from the teaching grant to paying the fee has no short term effect - but in the long run it benefits the taxpayer.

    The main sufferers are high-earning graduates. The changes represent a transfer of wealth from them to both lower earning graduates and to non-graduates.
    Offline

    17
    ReputationRep:
    (Original post by jb9191)
    The government

    • Will pay less in government funding to the universities (taxpayers money)
    • Will then use that money in other sectors whilst claiming they are cutting into the deficit.
    Surely they will use that money to pay out loans so it won't cut the deficit.
    Offline

    17
    ReputationRep:
    (Original post by Budgie)
    In the long run, the taxpayer benefits due to more of the burden being placed on the student.
    By long term do you mean what after 2030?
    Offline

    12
    ReputationRep:
    (Original post by Quady)
    By long term do you mean what after 2030?
    As soon as the first students under the new system reach the point where they begin to pay back more than they would have done under the previous system. I'm not sure when it will hit, but when it does it will be a significant and permanent gain for the exchequer.
 
 
 
  • See more of what you like on The Student Room

    You can personalise what you see on TSR. Tell us a little about yourself to get started.

  • Poll
    Did TEF Bronze Award affect your UCAS choices?
    Useful resources

    Groups associated with this forum:

    View associated groups
  • See more of what you like on The Student Room

    You can personalise what you see on TSR. Tell us a little about yourself to get started.

  • The Student Room, Get Revising and Marked by Teachers are trading names of The Student Room Group Ltd.

    Register Number: 04666380 (England and Wales), VAT No. 806 8067 22 Registered Office: International House, Queens Road, Brighton, BN1 3XE

    Quick reply
    Reputation gems: You get these gems as you gain rep from other members for making good contributions and giving helpful advice.