Student Developments Driving Out Coventry's Businesses
20th Jul 2018
Theresa May's former chief of staff has described the current university fee system as a "unsustainable Ponzi scheme", which is in need of radical reform.
Nick Timothy compared the fee system in England to the investment scam, whereby high returns are promised for investors, but are in fact generated by using money from new investors. Eventually the scam runs out of funds and the whole scheme collapses.
Mr Timothy wrote: "Tuition fees were supposed to make university funding fairer for the taxpayer, but more than three quarters of graduates will never pay back their debts.
"We have created an unsustainable and ultimately pointless Ponzi scheme, and young people know it.
"With average debts of £50,000, graduates in England are the most indebted in the developed world."
Mr Timothy resigned as a Number 10 adviser following the 2017 election but had backed the idea of a single financial entitlement, which could be spent on any kind of tertiary education, including technical courses.
He suggested governments had wrongly assumed that an increase in university graduates would boost economic growth, and that technical qualifications were more likely to boost productivity.
Responding to the comments, universities minister Jo Johnson defended the system. Mr Johnson said: "Young people from the poorest areas are now 43% more likely to go to university than in 2009-10, and 52% more likely to attend a high tariff institution."
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