Rishi Sunak announced his plan to publish data on supposedly poor performing university courses yesterday. Tory spokespeople were reluctant or unable to say what these courses were. None were willing to give an example of a single course that met this criteria.
Buit let's just consider the issues involved. The first is that it would seem that a poorly paying course is one where the government thinks that it is unlikely that it will recover the student loan advanced to a student to participate in the course. That means that there is inherent class bias in what Sunak says. Rich students do not take out fees to pay their loans. Their parents pay for their courses instead.
If this is the criteria then it is also sexist. The average male student enhances their earnings over their life by about £130,000 by going to university. The average women student does so by £100,000. The risk of bias is very obvious as a result. Women do, of course, repay less of their loans as a result.
Third, this takes no notice of the massive increase in student loan fee charges arising as a result of inflation and the extortionate demands for additional interest that have arisen upon them as a result. I don't approve of student loans, and never have. I always believed in grants. But what I am quite sure about is that an incredibly low rate of interest, if any at all, should be charged on these loans. Instead, excessive rates linked to inflation are, all for the reason of making them saleable to private equity capitalists.
Fourth, there is another issue. The tuition fees students now pay are also, according to the FT today, now unable to cover universities costs to provide undergraduate education. We are, in effect, wholly dependent on overseas students to now make UK universities viable going concerns. Except that in some cases that is not true: I am aware of a number of universities that are facing very difficult financial positions.
And why is that? This chart from the same FT article explains it all:
Yet again the UK lags well behind the rest of the world, as it also does on healthcare.
In other words, as a result of austerity and all that went with it we neither have a fit workforce or one properly trained for the roles that young people might have in the future, at least as far as government spending is concerned, and all because we have instead burdened a generation with excessive tax charges that the very wealthiest would moan about as being utterly unreasonable.
And then we wonder why people cannot save, buy a home or pay for a pension.
It's not low quality degrees that are harming the UK, as Rishi Sunak's would have it. It is our refusal to educate the young people of our country for the contribution that they might make to it that is leaving us with such problems. And after that it is fact that we have burdened them with debt that incapacitates the economy.
Sunak will not, of course, understand any of that. He can affiord to pay private boarding school fees for his children. They will never know what student debt is. But in the real world it is crippling, and is so by government choice. And the tuition fee system is also undermining our universities.
Altogether, this is another fine mess Tory austerity has got us into. There are ways out of it. But Labour has backed away from them. We are destined to remain in a mess whilst the wealth of younger generations is sucked from them to keep baby-boomers who paid nothing for their university educations in retirement.
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Thank you for another analytical. “X-ray piece.
Might a submerged purpose of student payable/paid fees be to gain control of a large and potentially powerful section of society through making them debt weak and so more pliable?
Yes, in a word
Indebted people do not argue is the logic
It also teaches them to accept indebtedness as normal. Encouraging people to spend what they do not have in order to boost the economy has been normalised during my lifetime. When I was growing up, buying on the never-never was disapproved of. Now people crave good credit scores and disapprove of people like me because we don’t (as I understand it) have one, because we don’t buy till we have the money to pay in full.
I am in the old fashioned school.
Apart from a house I have always saved to buy things.
I’ve always thought this was Thatcher’s rationale for selling off council houses. “If you have them by the mortgage, their hearts and minds will follow”, went the thinking.
It’s surely nationalist and borderline racist to offer degree courses and loans to foreigners on different terms to locals. Imagine if Tesco did that for your car insurance or loaf of bread, ah, your club card says you’re not British, that’s an extra quid to you.
Interesting point….
The government exempts itself from race discrimination legislation
There undoubtedly are some low value university courses – ones with an unusually high drop out rate, or inadequate teaching, or where the impact on lifetime earnings is low or negative. On the other hand, most students will increase their expected lifetime earnings by taking a degree, and the additional taxes they will pay will more than offsets any loan write-offs. And more importantly, three or more years of undergraduate study will have a positive impact on their quality of life.
Some economic analysis here, although pre-pandemic, and subject to the usual caveats. https://ifs.org.uk/publications/impact-undergraduate-degrees-lifetime-earnings
As you might expect, medicine, law, economics, maths, computing are near the top of the tree in terms of expected lifetime earnings, although the average conceals a large dispersion. Some do very well and some don’t. The difficulty is picking winners a decade or more in advance.
For women, languages, bioscience and architecture are surprisingly poor. And for men, social care and physics. And for both, creative arts, agriculture, philosophy, and English.
So let’s get everyone to study Oxford PPE.
The last possibly the most destructive degree ever offered.
Andrew
Sheesh. The worth of a degree to be measured by lifetime earnings?
Whatever next?
* Oh, how about killing off A-Levels if the student isn’t going to be studying for an approved degree?
Then what?
* Free post-11 education only if you have an aptitude for the ultimate – an approved degree?
Education is about personal growth, not utilitarianism. When do we start creating Epsilons? The attitude of “monetary worth” in an (MMT-cognisant) economy is disgusting, is vile. Shame on you, sir, for even contemplating the notion, as you did in your first remarks.
Expected lifetime earnings is certainly one measure, Anne, but not the only one, and probably not the most important one. Else we would all study economics and become investment bankers, and starve for want of agricultural workers, die of untreated illnesses for want of health workers, and drown in a sea of rubbish for want of refuse collectors.
You might have noticed where I mentioned quality of life. I’m entirely happy with people studying creative arts if that is what enthuses them – indeed, I always encourage people to do a degree in whatever they find most interesting, whether that is languages or maths or philosophy or art, because they are more likely to do well and then have a better chance to do whatever they want next – but I’m not ashamed to think it is a good idea to be aware of the long term implications.
Students who drop out of university, or don’t receive the quality of teaching they deserve, are not getting many of the benefits of a university education. Some might do better with another form of tertiary education – perhaps a practical skill or trade, perhaps a degree apprenticeship.
I very much agree with you: take the subject you are interested in and get the best degree you can. That is much more usefulthan the content. Fir example, most accounting and economics degrees teach absolute rubbish, the former because the professional institutes demand it and the latter because they choose to do so.
This all demonstrates that education should not be treated as a business.
Likewise, ideally healthcare should not be treated as a business.
Three words: “Mindless Fiscal Conservatism”
Student loans are pernicious. A new graduate, earning above the repayment threshold, will pay a marginal “tax” rate of 20% income tax, 12% NI, plus 9% loan “repayment”. 41% tax, when you have just started work, given the cost of renting and, later, house purchase, is way too high. The conservatives claim to be a party of low taxation. That’s a sick joke.
It is clear, because we do it, that we have the real resources to send our children to university.
It is a wholly political choice to saddle them with debt. We don’t have to do so. We should provide grants as we used to do. This would not add to inflation, students are clearly spending their money. It is not inactive money in “investments” (e.g. collateralised debt obligations based on student loans) that causes inflation, but money spent. Grants would not increase the money spent in the real economy.
“Forgiving” existing student debt is a great way to stimulate the economy. The money ex-students save will be spent into the real economy. We should do so. Of course,the current, austerity blinded, politicians will not.
You ate right about debt forgiveness and it clearly does not only benefit the well off
If Sunak is really concerned about poor performance, he should dip his nose into the utter bollocks under-grads are taught about economics and in in PPE courses at universities. That would be a good place to start IMHO.
Spot on
Given the problems the Uk faces, is the Uk educational system fit for purpose? Is the current trajetory actively undermining the UK?
The recent report on China from the HoC’s Intelligence & Service Committee would seem to think so. China spends £600m on educating Chinese students in the Uk. The report notes that some (emphasis on this word) – are used to collect intellectual property (others spy on their fellow students).
In my area of expertise (electrical engineering) the 1980s and 1990s saw a lost generation of graduate engineers – they all went into the City of London – which means that they are lost for ever. As for debt, there should be none – uni education should be free, as it was. BUT, those from other countries should pay.
I am confident that the combo of vile-tory and vile-libore will do……..nothing. Together they have made things worse for 33 years and will continue to do so.
What seems to get lost in the debate about education is the distinction between consumption and investment benefits which was always part of the literature on the economics of education. Furthermore, the important distinction between private and social returns to education and the associated positive externalities that arise from it appear to be absent from the current government’s thinking.
The broader arguments about the nature and purpose of education as against training are lost completely. There is more to education than simply enhancing life cycle earnings and being able to pay off the debt that accrues (which, as you say, favours the better off who can afford to fund their children’s higher education and provide them with an allowance on top). However, l am not surprised given that the PM appears to be more at home with spreadsheets than wider ranging discussion of the role and purpose of education).
Some individuals may choose careers which they perceive have greater net benefits (to the individual and society) rather than the greatest income. The higher education system in England has changed substantially to one in which many universities have become ‘results factories’ (many students see them as such). It seems to me (having spent over 40 years in the sector the focus has shifted too much to the outcomes and the process of education somewhat neglected.
I have to declare an interest, l was on of the lucky ones that went through the university system that had no tuition fees and provided maintenance grants.
I agree entirely with your comment regarding the Oxford PPE, from what I could gleam from the website it seems rather narrow and somewhat dated.
I was also one of the lucky ones – albeit I was on a small grant and my fathyer refused to pay for anyone to do an economics and accounting degree (he said I should be an engineer) so I pretty much worked my way through and was also very hard up – but had a great time anyway thanks in paryt to some very unmderstanding friends
To your main point – we basically have two main parties now that do not undertsand macroeconomics. I should do a thread.
What would be helpful would be to look at what we need from post 16 education, we are not training and retaining enough skilled workers especially in construction – and of course we are crying out for the technicians needed for the new generation of electric vehicles at the same time as we are recruiting students for courses with high drop out rates and/or limited earnings potential on completion.
Interesting that Germany has a National Careers Service open to all that provides training and where needed retraining