Exeter Student Scheme Recommended for Approval
21st Jun 2018
A parliamentary committee has branded the current tuition fees system for England's universities as a rip off, which represents poor value for money for taxpayers.
The House of Lords economic affairs committee revealed evidence that the student loan book would increase to more than £1 trillion over the next 25 years and the current system of fees and loans is deeply unfair.
The report also accused the government of hiding the true cost of public spending on higher education.
Lord Forsyth of Drumlean, Chairman of the Economic Affairs Committee, was particularly shocked to understand that by moving to a loans system George Osborne was able to appear to increase funding for education but at the same time cut his deficit.
He said: "The accounting trickery attempted by the Government in 2012, in which the high rate of interest on student loans created the fiscal illusion that Government borrowing is lower than it actually is, has had a devastating effect on the treatment of students in England."
By 2044, when many of today's students will still be paying off their loans, the student loan book will have grown to more than £1tn, increasing to £1.2tn by 2049.
One of the arguments for cutting the deficit was so debt wasn't passed on to the next generation. However, for the generation being asked to pay back these loans, when they've finally paid them off they may suddenly find there's a bill for £1.2tn.
The report put forward a series of key recommendations including a reduction in the interest rate charged on loans.
Lord Forsyth commented: "We recommend that the interest rate charged on post-2012 student loans should be reduced to the level of the ten-year gilt rate. This would mean reducing the interest rate from around about 6 per cent today, to 1.5 per cent. No student should incur interest while studying."
It was also suggested the means-tested system of loans and grants that was in place before 2016 should be re-instated and total support increased to reflect the true cost of living.
In response to the report a Department for Education spokesperson said the review into post-18 education and funding will ensure students are getting value for money along with a genuine choice between technical, vocational and academic routes.
21st Jun 2018
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