Virtually all taxpayer funding will be removed from the majority of degrees and students will have to borrow tens of thousands of pounds to cover the doubled cost of courses.
Seems sensible enough really.
The major beneficiaries of a degree are the people who hold that degree in the higher lifetime earnings they gain from having that degree. So it should be they that pay the costs of gaining that degree.
There\’s no real way to have private funding of the loans though: yer average 18 year old isn\’t the greatest credit risk for £50k now, are they? So government provision of the loans seems fine.
The greater societal benefit of having lots of graduates: I\’m entirely unconvinced about that. Yes, I\’d say there is a public good to having a largely numerate and literate society, thus meaning tax subsidy to that part of the education system that provides that (and if only we did have a part of the education system that does provide that) but having 40, 50% of the age cohort with degrees?
Given that the vast majority of them go on into careers which were not traditionally thought of as requiring a degree I don\’t really see it I\’m afraid.
In fact, I rather hope that the unwrapping of the current subsidy, the making plain what are the true costs, will mean fewer taking a degree in the first place.
But the basic concept being proposed seems just fine to me. Here\’s what a degree costs, we\’ll help finance it but you\’ll have to pay for it: just fine by me.
If the quality of secondary education was better, then there wouldn’t be a need for more than 15% of the population to take a degree. The demand for degrees for jobs that clearly shouldn’t really require a degree just adds a cost to citizens and funnels money into higher education where it is no longer available for productive investment. This academic black hole has to be reduced.
I hope the greatest benefit will be that market forces reduce the phenomenal levels of waste and profligacy common in academia.
It should also eliminate the more wanky, irrelevant degrees.
Mark, John, Tim,
It’s a pity politicians won’t put it like that. Everyone would understand but no, they’ve got to keep up the pretence that 50% of school leavers going to University is a good thing even if they are getting Mickey Mouse degrees and sucking resources from other areas.
Better to charge £20,000 cow Law degrees and the like, while heavily subsidise engineering and maths. Fewer lawyers is good; fewer engineers not so good.
I’d like to see Oxbridge PPE degrees costing £100,000. Should price out the Milibands, Coopers and Balls of this world. Win, win!
The true benefit of this will be to force universities to be independent of government funding for undergraduates. The losers will be the academic “establishment” where producer capture has driven this nonsense about 50% having degrees. And good job too.
“Better to charge £20,000 cow Law degrees and the like, while heavily subsidise engineering and maths. Fewer lawyers is good; fewer engineers not so good.”
Good idea.
Would this increase income inequality? If people are required to make a large investment that may or may not pay off in the long term, and any return is taxed at over 50% (higher marginal income tax rate) you would want a big premium on expected gross pay in order to invest. So pay for jobs that required a degree would need to go up. Or higher rate tax rates decreased.
“The major beneficiaries of a degree are the people who hold that degree in the higher lifetime earnings” – depends what you do with your degree – engineers who drive mass production create untold billions in wealth enjoyed by all of us through lower prices
On the other hand, there was an interesting post by Megan, speculating that government-backed student loans in the USA had caused the great increase in college costs, as colleges’ grabbed to themselves more of that future boost in earning power. (Before government support for student loans, they couldn’t, as most of their students couldn’t pay that much as who wants to lend to a penniless 18 year old?, so college costs were limited by how much the marginal college-going 18 year old and their parents could afford.)
Ah, the link was
http://www.theatlantic.com/business/archive/2010/09/the-high-cost-of-college/63445/
Johnny,
Your assumption is that the student will pay.
Here in SA many companies pay bursaries to employees who qualify to attend university. Why? because they earn way more from their employees than they actually pay so it makes sense to send them to university to get clever.
What Tracy W said.
Worse, in order to keep new graduates from defaulting on their student loans the loans are not dischargeable in bankruptcy in the USA. As a result, some students face a lifetime of debt slavery, especially people with law degrees, where each year 45,000 graduates compete for 22,000 jobs. (This has spawned a host of ‘law school scam’ blogs, such as ‘But I Did Everything Right’. )
ZT
There is an education bubble in the United States, caused by the idiot notion that every individual must have a degree ‘to get on in life’.
People leaving 3rd rate schools with law degrees and $100k debt are finding out the hard way that Hoboken University law degrees don’t open many doors to the upper reaches of the legal profession.
But the $100k debt is very real.
It’s an extension of the ‘you’re all winners’ silliness of the modern left – if everybody has a Bachelor’s degree, then a Master’s becomes the new entry level qualification.
And not all Master’s programs are created equal either.
We even see firms designing their own testing and assessment programs, so devalued have degrees become.
Like every leftist program, eventually grim reality kicks in and the hard world returns. Just not for Obama and Broon and their detestable ilk.
Lots of students at Uni hides a large cohort of the unemployed.
I’d go for full fees, paid up front from a govt backed loans and access to the same benefits as the unployed get. Why do we subsidise a sofa lifestyle but not a lecture hall one?