UKC

So £7.5k as predicted but with a 40 year pay off... wow!. I think this change in time is really silly as it leaves the debt hanging for an extra decade, almost into retirement, before being written off. Also no recommendations to close the resultant funding gap.

It's going to be really hard for many institutions , including some big names like Reading, to close this new funding gap, as although some of the spending and investment has been rather profligate you can't unspend such very easily... new building costs are not cheaply removed from balance sheets nor are staff. This lack of additional money that UUK identify, risks trashing many good institutions on the bonfire of market ideology.

The link below gives the two VCs view on some of the latest unprecedented parallel risks (of course completely ignoring the additional problem of their average poor financial control in the UK.. too many new buildings, with their extra loan and depreciation costs...and too much investment in central bureaucracy) 

https://www.theguardian.com/education/2019/may/09/its-a-dangerous-time-can-...

The Education Secretary seems to be spouting deluded rhetoric in comparison (just looking at average reserves... which won't last long and are not all healthy on an individual basis.. ask Reading):

https://www.theguardian.com/education/2019/may/25/education-secretary-unive...

Reading is in a somewhat unusual situation given recent events. 

However, the 'free market' approach to Unis with essentially unlimited access to loans was always doomed to fail. Universities that didn't expand would be left behind whilst those that did became dependent on high student numbers. Rather than do a 'soft landing' of keeping fees at £9k without inflationary rises, the headline grabbing approach of a 'cut' but, in reality, a rise has been proposed. Medicine costs far more to teach than £9k and what was done to the nurses was awful.

Osborne knew his accounting trick that turning student grants and directly paying fees into loans would come back to haunt the system, but he knew he'd be out of the scene before this happened.

The link to salaries is simply stupid. If you get a job down south it pays more - but that doesn't mean that southern Unis inherently teach better. Some really important jobs don't pay well - but that doesn't count either.

Before anyone else chimes in, I know VCs salaries are exorbitant (= free market) but that's not the cause of the problem. The problem is the system was systematically broken with the massive increase in fees (and a very quiet £700 million cut to Uni finances at the same time) and there's no way back without a lot of grief.

We should fund technical colleges better for vocational skills and allow the Unis to do research and teach those courses to those students that need the higher level skills. I simply don't see how we get there.

Not really that unsual, Cardiff is isn't far behind and quite a few othe old Unis have real problems but they haven't yet hit the press (so unfair to report here). Some of those 'upper mid rank' institutions with bonds are especially vulnerable now.

Medicine and most STEM courses get central funding top-ups. Nursing fees in contrast was foot shooting.

I'd love to see more funding in vocational education but my experience of college management (from franchise and articulation)  is they too often make some of the problematic Uni management look exceedingly competant and the staffing and educational standards are often a real mess. Back when I started in HE even City and Guilds qualifications had proper standards. Family friends in electrician training seem to have more knowledge that some HND graduates who come to us. The Uni based graduate apprentiship schemes seem OK so far to me (if underfunded compared to degrees). 

I'm seriously worried about growth of US owned private colleges who were part of major scandals back home. The QA rules that apply to most UK HE don't apply to private institutions. The tories seem really keen on more of these.

I agree about Osborne. Fees were like PFIs: handy being off-balance-sheet but very high risk in terms of long term costs.

It's a total con. Hopefully any student clever enough to be going to university will notice that with the lower repayment threshold and the longer term the average student is likely to be paying off far more than they would on the old system.

As far as the funding situation goes, I know that as it stands, every university in Wales is going to be making a substantial loss this year and I doubt this is any different in the rest of the UK despite the Welsh government not giving Welsh universities a proper top up for running expensive courses.

The plan of attack for my employer is to recruit loads more foreign students, cut spending, make sure everything possible is costed and charged for and eventually lose a few senior staff.

Sadly I think thats common across the UK. Efficiency saving and recruit more overseas students is almost a standard mantra.

Simon Jenkins makes some useful points below, although some of his 'facts' are sloppy (chinese students are a quarter of post grads and University contributions to an economy are one of the best value outcomes for state investment..   https://www.universitiesuk.ac.uk/policy-and-analysis/reports/Pages/the-econ... )

We do need a better story for the public (and Collini sure won't acheive that ) and much less waste of public money and less regressive funding (loans favour rich kids).

https://www.theguardian.com/commentisfree/2019/may/31/what-are-universities...

I'm especially worried about this.

"For the universities, the student fee was state money up front. They grabbed it and spent it. According to the Institute for Fiscal Studies, the Treasury cost per student is now more than it was before fees were tripled in 2012. In other words, the entire student fee appears to have gone on inflated university costs. Meanwhile, universities have not been freed of the government, quite the opposite. Academics are run ragged by Whitehall oversight and meddling in their research and teaching. That is what happens when you move from ivory tower to public service."

The lost money (no longer off balance sheet so a big problem for the treasury)  falls on future taxpayers and mostly goes to shiny buldings as marketing tools and management bureaucratic initiatives no one needed and some to those many graduates who fail to acheive high enough paid work and way too much to the costs of the company handling the loans. The new proposed system will proportionally squeeze more money out of the lower paid. I've never known a time when academics have been under so much pressure in teaching, research and admin and the main funding tsunami hasn't even hit us yet.

I also agree with this.

"Augar should have proposed a switch from a loan to a progressive graduate tax. This would be easy to levy, would not be paid by those on low income, and could not be avoided by those whose wealthy parents currently pay their fees. It is a career-based repayment of a state benefit."

Loans are now proven to be a regressive and expensive method of funding. 

Adding and extra 10 years at 6% interest adds another 80% interest.

If you've paid for 30 years and you have £1000 left to pay, then lose your job or have to take a lower earning job under the payback threshold, at the end of the next 10 years you own £1800.

Worse than the current system; for poorer students.

For the average person the overall loan amount is meaningless as they won't pay back anywhere near the amount they technically owe. The term of the loan and the earnings threshold determined this. So by increasing the term and lowering the threshold effectively adds a load onto what could be repaid.

considering a hypothetical graduate who borrowed £30,000 ( debt of 34,750 by the time they graduate) who earns £30kpa, they will be paying about £385 a year off their loan but the interest is £2,085 a year. With the proposed changes the will be paying £630 a year so £25,200 in total compared to £15,400 with the current system. Neither will pay off the full amount.

I've been ranting about this from Day 1 - it's an even more pernicious accounting trick than PFI ever was. Why it hasn't been called long before I have no idea.

It nicely reduces the cost of tuition for well off graduates and increases it for poorer ones.  It is in keeping with the rest of government policy.  Transfers the extra money to financial institutions rather than the universities too.

What we need is tax breaks for businesses who sponsor apprentices to put them through uni.

If businesses do this, they can protect their investment with a contract so the apprentice repays tuition fees if they leave within a number of years. 

This cuts out the student finance interest, guarantees jobs for graduates and guarantees businesses get the graduates they want.

Well that's what I was getting at really, the fact everyone ends up paying more, quite a lot more. On the face of it, it looks like longer time = lower payments, but it's all bullshit.

Bring back the EITB I say, a great 1st year full time for practical students, with progression for the cleverer one's to management, but with a knowledge of what's involved in preforming the duties of different trades.

Do you mean tax breaks instead of the current apprenticeship levy?

https://www.gov.uk/government/publications/apprenticeship-levy/apprenticesh...

Another good article on the subject.

https://www.theguardian.com/education/2019/jun/04/the-augar-report-on-highe...

The lecturers union view, which I suspect will be developed and even stronger worded when Jo Grady gets going:

https://www.ucu.org.uk/article/10125/UCU-response-to-Philip-Augar-review-of...