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Tuition fees slashed? Experts give their views on Labour's pledge to students

3rd March 2015

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Higher Education experts have spoken out following Ed Miliband’s pledge to cut tuition fees to £6,000 – and there are concerns that the promise isn’t fully viable.

The main concerns from Vice Chancellors and finance experts focus on the increased cost of student living and the viability of Labour funding such an extreme cut.

Ed Miliband pledged to reduce tuition fees from £9,000 to £6,000 during a speech in Leeds last week, if his party is elected in the General Election in May.

The current tuition fee cap was introduced for students starting their degrees in 2012 – meaning that those paying the heightened fees of £9,000 will begin to graduate this year.

The current system is likely to see graduates saddled with a debt of £44,000, which they will begin to pay back after earning £21,000.  

Miliband said fees would be cut by autumn 2016, and promised universities an extra £2.7 billion a year to cover the costs involved. He also pledged to boost the Education Maintenance Allowance by £400 a year.

He plans to pay for the lessened fee amount by reducing tax relief on pensions for the wealthy – namely, those earning more than £150,000 per year.

The Vice Chancellor of Birmingham City University has expressed reservation about the promise, however, based on whether Labour could fulfil the commitment and what it would do to student numbers in the UK.

Professor Alan Cliff, whilst saying that he welcomes any proposals that will “result in future students having less debt at the end of their studies”, points out that there are “catches with such proposals, including the extent to which a Labour Government could continue such a funding commitment over the five years of a Parliament with all of the potential uncertainties over that period, and the extent to which future student numbers may need to be controlled to afford such proposals.”

Meanwhile Michelle Highman, Chief Executive of The Money Charity, believes that the announcement is “a step in the right direction”, but that the real issue facing students is the often untenable and ever-rising cost of living rather than the debt that they will be faced with afterwards.

Highman says that “any increase in maintenance support will have to be significant to address the real cost of student living – the fact that at universities across the country, students’ financial wellbeing is undermined by sky-high accommodation costs that swallow up their maintenance support.”

She adds: “Our Set Up to Fail report found that at some universities students from low-income backgrounds faced spending huge amounts of their maintenance support on even the cheapest university halls. Politicians and universities need to work together on issues that make a direct difference to students, like paying their maintenance support monthly rather than termly and making sure they have money left to live on after paying their rent.

“As well as this, students need practical support to manage their money.”

Despite these reservations, employers have welcomed the plans. The Federation of International Employers believes that, “Although this announcement has been criticized by many organizations (sic) because it is believed that only half of all students will, in any case, pay back the loan - the assumptions of such critics is flawed because under the present arrangements there is a huge disincentive for graduates to go above the £21,000 repayment threshold by either opting for low paid jobs, accepting low paid second jobs in the grey economy or taking up work abroad.”

Robin Chater, the Secretary-General of the Federation of European Employers (FedEE), believes that tuition fees should be scrapped entirely.

He says that if tuition fees were zeroed “this would mean that the public is making a massive investment in the future and English graduates would be persuaded to stay working in the home labour market rather than going abroad – as now is the case for the brightest students facing their huge debt burden.”

He adds: “If the total liability for repayment is reduced more graduates will feel confident to drive their careers forwards, knowing that their total repayments are not such a burden. This will have a potentially huge impact longer term on the English economy.”

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