Can’t pay? Won’t understand.

What angers me most about the opposition to raising the cap on student fees probably isn’t the rioting and vandalism that the protesters get up to. It’s the ignorance, stupidity and ill-informed manner with which the opposition is presented and articulated.

“I can’t afford nine grand”, “it will put poor kids off university”, “we shouldn’t have to pay because Clegg and Cameron didn’t”. Wrong, dangerous, and cobblers.

Of course in some ways it’s very easy for me to comment, my student debt is pretty small compared to some leaving University now, it’s not much more than £10k. On the other hand I was expected to stump up my tuition fees in September each year, the state basing the amount on the means of my parents, regardless of their willingness to support me; it was expected of them. How very progressive.

Others are leaving University this year with debt of more than twice what I have behind me, yes their tuition was free at the point of need, but their debt is a mill stone around their necks as they embark on the hard journey to getting a job and paying it back. It’s debt they can’t afford leaving many in a perilous financial state in harsh economic times. Except of course that’s total nonsense.

I wouldn’t give a toss if my SLC debt was £100k or more, it wouldn’t cause me a second thought. Know why? It isn’t real debt. I have real debt and you can tell the difference pretty quickly.

The problem with the current debate on student debt is the ignorant misconception that it’s like a mortgage. It isn’t anything like a normal loan. You will and can never default on the debt. No one will ever chase you with a stick demanding payment. The interest rate is inflation, so effectively zero – this year inflation was flat so it really is zero. You’ll never lose your house, car, shirt off your back or anything else if you can’t keep up with repayments, because the repayments have to keep up with you. You pay 9% of everything you earn over a threshold of £15k a year by PAYE or in your tax return. If an average graduate gets paid £20k on leaving University, they’ll be paying £450 a year in repayments. When I was working I spent more than that in a year on breakfast. And I don’t eat breakfast.

If you have SLC debt and are thinking of paying it back as quickly as possible, do yourself a favour – wise up, and don’t pay back any more than your statutory repayments, no one will thank you for doing anything else.  If you’re that desperate for the extra £50 disposable income, get a paper round.

So you cry at me you can’t afford £9000 a year because you’re from a working class background, your parents can’t afford to fund you through university, you’re not like the Eton toffs behind the policy. That may very well be true, but it isn’t what will stop you going to University. The NUS and Labour Party telling you that you can’t afford it will. Your own ill-informed prejudice will. You’ll be expected to pay nothing upfront, and nothing until you earn £22k. Yes you’ll be asked to pay 1% on top of inflation, but that’s still the cheapest debt you’ll ever have. And just like now, if you never earn enough to pay back the full amount, after 25 years, the debt dies. No one holds it against you, the state just writes it off as a favour between friends.

So what is really the problem here? Is it really that the policy is regressive, discriminatory and inherently unfair? Or are we having and uninformed debate, lead by party political combatants seeking an easy poll pleaser playing on the fears of people they aren’t giving the whole story to?

The villains of this piece aren’t the Lib Dems or the Conservatives, it’s the duplicitous, malicious, scaremongering left.

  • Itwas SammyMcNally whatdoneit


    It is somewhat similar to the poll tax, there is a general feeling that it unfair and although there are positive elements to it the visceral reaction (which is understandable) to a measure which has broken Libdem elections promises and is championed by a Tory party – still widely regarded as protecting the interest of the wealthy (perhaps a little unfairly) is a political disater.

    The police are left with the almost impossbile task of keeping order on the streets when the Plain People of Britain (or a large percentage of them) think the policy is fundamentally wrong.

    Sometimes (and leaving aside the merits of the case) and as we often see in Ulster, sentiment and ideology rule over arguement and reason.

  • Johnny Boy

    A large % of people seem to think that when the government are paying for something they aren’t. Violent opposition to this policy is born out of ignorance.

  • HeinzGuderian

    Well said Michael……….Well said sir !! 🙂

  • DC

    So what is really the problem here?

    For a clue click on this.

  • DC

    If this is such a fantastic and great idea maybe the government could build good houses for the public like this using private contractors?

  • Johnny Boy

    “So what is really the problem here?”

    I’d rather policy is dictated through reason than by pre-election PR stunts.

  • Great post. I agree with all of it and am grateful for some new angles on the nature of the debt, which I had so far not heard. I have little left to add, save to comment on comments

    “It is somewhat similar to the poll tax”

    I prefer to liken it to the introduction of the breathaliser test back in the 1960s. Ignorance played a huge part in the opposition to that policy back then.

    The political impact of the Student loan policy will not be known until ordinary folk have grasped what it means in practice. Over the next few years, I think this issue will disappear from the radar. I also believe it will survive the next Labour Government.

    By contrast, the poll tax was an enduring political disaster and contributed to the Conservative problems in Scotland. Unlike student loans and fees, the poll tax was weak on the fairness argument. It looked simply like a property owner’s charter.

  • DC

    I dont really know how anybody can celebrate a policy or in fact anything that makes something more expensive for somebody?

  • Dewi

    “You pay 9% of everything you earn over a threshold of £15k a year by PAYE or in your tax return.”….
    “You’ll be expected to pay nothing upfront, and nothing until you earn £22k”
    Sorry Michael – how does that work?

  • thethoughtfulone

    A rather simplistic view I think.

    Take the principle of university fees as a stand alone arguement and it holds up quite well. Why should tax payers, some of them quite lowly paid, pay for the further education of some who will then go on to earn much, much more than they could ever hope to, seems fair enough.

    Firstly, look at the money that’s being saved and then look at some of the things that vast sums are still being spent (wasted?) on and can you honestly say that it is all more worthwhile than the university education system?

    Secondly, what really needs to be done is to reverse the trend of every man and his dog going to university even if it is to study some half-assed degree which will probably never benefit the recipient or the country at large. This will not achieve that as those same degrees will probably never be paid back along with many, many others for various reasons.

    I do take your point that you agree with tuitions fees but for different reasons than those being touted, well I disagree but for different reasons. The scheme is clumsy, ill-though, shows no imagination or lateral thinking in it’s conception, and will probably not even save anything like it’s supposed to anyway.

  • Mack

    The problem may less be that the system is unfair (although as described it certainly seems unfair. It is fair that those who benefit from higher education – pay for it, that may not be the best mechanism as previous generations are still not contributing), but that it is a predatory vendor financing scheme.

    Does it really cost £9k per year in fees today? What will it cost in 15 years? Where is the incentive for the university sector to keep costs under control, if the bill can always be palmed off to students?


    By the way an interest rate 1% above inflation is a significant real interest rate and thanks to the miracle of compound interest will significantly increase the real debt burden on borrowers over time, particularly on those who can least afford it – i.e. those who start making payments late because they find it difficult to secure well paid employment. That in itself makes the system grossly unfair..

  • Johnny Boy


    Noticed that as well, I think it’s just a mistake. 15K is threshold under the current system.

  • polizeros

    Here in the States, it’s the opposite. Student loans are not dischargeable even by bankruptcy, and they will come after you and take money out of your paycheck. Interest is between 5-7%

    The loans are guaranteed by the government, and bundled into bonds, just like subprime.

    A recent story here was about a women who graduated from university with $200,000 in student loans. She’s working as a clerk and has no realistic way she can afford the loans.

  • Itwas SammyMcNally whatdoneit


    It is similar to the Poll tax in that those who introduced it (the Tories) and those on whose behalf they are widely percevied to operate on behalf of – ‘the wealthy’ – are not really impacted upon – whereas middle-England-man is.

    This makes is similar to the poll tax politically as the debate is based on a gut feeling of unfairness rather than the merits of the case.

    There is no comaprison with the breathaliser as that was not a party political issue and had no concept of unfairness except of it being unfair on those who wanted to wreak havoc on the roads.

    p.s. Were there not similar exemptions proposed for the very poorly off in the poll tax?

  • Johnny Boy

    Mack – No matter when you start paying or how much of your debt is outstanding, you still only pay 9% of you salary in repayments (until you earn more that 41k I beleive), so I don’t see how that’s a problem.

    My understanding is that the debt is written off after 30 years, I’m not sure whether this is 30 years after your course ends or 30 years after you start paying. If it’s the former, it’s hugely beneficial to those who start making payments late.

  • DC

    where is the incentive for the university sector to keep costs under control, if the bill can always be palmed off to students?

    And another thing, where is the incentive to give out crap grades, if looking to make a profit or to attract students to attract the wealth?

    For instance, why hand out 3rd class honours whenever to market the university better it makes better business sense to hand out 2:1s or 2:2s. The old saying: nothing succeeds like success.

    I pay you £9k – you better mark me good mister!

    Whereas if getting funded from an arms length and constant source the tutors may be more inclined to mark on content, rather than mark to market.

  • Johnny Boy

    Useful information (I’m guessing it is a government website)

  • Mack

    @Johnny Boy –

    I note that the loan terms seem to be getting progressively harsher with time.

    What you have is a double or treble subsidy from say Social Anthropology / Social Policy / Drama students to Law / Engineering / Medical students.

    In the first instance those courses are not of equivalent value. Drama might be worth more than Social Anthropology because of the non traditional-academic aspects, but Law / Medicine / Computer Science degrees etc are all worth a lot more than your average liberal arts degree in the market.

    But what this system seems to do is charge the Social Anthropology / Social Policy / Drama students more for their degrees p.a. than students studying truly valuable degrees who will get jobs earlier.

    Coupled with a differential pricing / competition based market mechanism in terms of course pricing it might be fairer – but just look at what has happened to 3rd level education pricing in the US. Or the property market here…

  • Mack

    @Johnny Boy –

    The loan system described here seems fairer that what I took the OP’s post to imply.

    Anyone got any info on price differentials of degrees at Queen’s ?

  • Johnny Boy

    What also needs to be understood is that the change is to the maximum tuition fee that can be charged. All universities will not charge 9k or even the lower limit of 6k.

  • Drumlins Rock

    how many will be able to charge over the 6k? Would Queens be in that group if it were in England? So far as I can see it seems to be a pretty fair system, having taken the vocational route as they say and originally having to pay up front, I have little sympathy for the students.

  • Johnny Boy

    DR I like you didn’t go to university, the new proposals seem to offer the mature student the opportunity to avail of a loan to pay for part time study which I think is a positive.

  • Alan

    It is still 9% of your total income if we can believe this thread. On my calculations that would come out a 157.5 per month on a salary of 21k. That will substantially impact upon the level of mortgage you can afford in later life. Never mind car loans, school fees etc. Those whose parents can write off the loan or buy their offspring a Merc for Xmas will have a significant advantage, of course.

    In addition, there are living expenses to be included while you are at University. Little wonder less well off young people are feeling in the firing line. If you have nothing to start off with there is a real disincentive to go for HE.

    Also, we are seeing the introduction of a multi-tier university system – the more you can pay, the better your education. Fairness went out the window with the Tories.

  • Mack


    That will substantially impact upon the level of mortgage you can afford in later life

    As it will affect most people in your cohort equally, that is generally a good thing. You’ll get the same house for less.


    The terms seem to have gotten better this time out, but surely the last decade and a half of deteriating loan t&c’s means it’s only a matter of time before they get harsher again. Case in point repayments on student loans from 15 years ago didn’t kick in until incomes reached £18k or so, but I note they have just been raised from the £15k threshold that applied to students who entered the system last year. That is, £3k lower in nominal terms than my student loan and significantly more in real terms (£7-10k lower)…

  • Mack

    Correction – inflation wasn’t that high – probably a threshold of just less than £6k lower, maybe 5k or so..

  • Johnny Boy


    Repayment seems to be 9% of your earnings above 21000, so your figure is completely misleading.

  • The £15,000/£21,000 discrepancy is no such thing.

    The intention always was that the threshold would escalate with inflation. That magic £21,000 (of which the ConDem propagandists never cease to bleat) is merely the former threshold up-rated to 2015/16 levels. The first-year nurse on London weighting pays that 9% impost, by the way. End of that one.

    What is the nub of the issue is the trebling of debt: both to the individual and to the bottom line of the national Exchequer (which has to guarantee the commitments to the private sector, then bear the costs of defaulting). The Treasury Debt Management Office will soon be under-writing considerably more than is currently paid out in teaching grants. The Browne Report addressed this (by suggesting loans go only to those achieving higher A-level grades): so far we haven’t heard how the inevitable rationing of student loans will be achieved. The current estimate (by HEPI) suggests an increase in cost to the Exchequer of £2,600 per student: expect a third of future first-degree students to be refused loans.

    Then there is the blatant cut: 80% of the teaching budget instantly alienated from higher education. Universities are being effectively privatized: was that in any manifesto?

    Finally there is the lack of any equity. If one is possessed of a trust fund (or has the “pull” to get one of those legendary £100,000-a-year plus bonuses City jobs), one pockets the loan at nil interest, invests it, then repays before the interest rate applies. If one is on average graduate earnings, the compound interest hikes the debt up pretty sharply (as all those on pre-1998 loans @ 5% are now finding) and one remains in debt all one’s working life. So, with a 9% graduate tax (which is what a loan repayment is in all but name), the real marginal rate of taxation is about the same as the higher-rate tax-payer (unless, of course, one is “Sir” Philip Green).

  • Reader

    Malcolm Redfellow: and one remains in debt all one’s working life.
    Only if you retire at 51. Who expects to do that these days? By the way, what was the Labour party going to do with the output from the Browne report? After all, Labour commissioned it and supplied its terms of reference. Has Ed Miliband promised to undo the system if/when Labour gets into power? And what would you put in your manifesto?

  • Reader

    DC: I pay you £9k – you better mark me good mister!
    Don’t forget to give another £9k to the external examiner, and even if that works for you, another £9k for the company HR bod who sees that you went to a degree mill.

  • Johnny Boy

    Malcolm Redfellow – “with a 9% graduate tax (which is what a loan repayment is in all but name), the real marginal rate of taxation is about the same as the higher-rate tax-payer”

    Basic Tax Rate = 20%
    Student Loan Repayment = 9%

    I didn’t go to university you understand, but to me that doesn’t add up to be “about the same” as 40% (higher tax rate)

  • The Raven

    …and just where for vocational training, and an extended role for Further Education? In my own circles, which are mainly very small businesses, very few owner-managers are looking for degrees. They’re looking for a bit of savvy and experience. In my last job, I managed to remove the notion of degrees from job descriptions – in fact we did away with “job descriptions” and moved towards broader “job roles”. Small businesses want workers with a bit of nouse, some flexibility, and plenty of experience/transferable skills.

    I think a trick has actually been missed here – let’s get away from this degree crap and move towards developing skills again. Let the degrees remain the domain of doctors and accountants. Let’s get FE back on the ball in terms of teaching specialist courses with use-able skills – across ALL the professions. They’re trying, but I think they’re missing the goal by a country mile.

  • JAH

    Only £27K debt plus the 3 year debts from actually living for 3 years!

    Judging by most of the comments above £100k couldn’t be enough debt to saddle students with. I assume most of you don’t have any teenage children and wonder how on earth they are going to fund their way thru college. Of course those who have paid £10Kpa school fees this is mere bagatelle. It isn’t for the rest of us.

    However, that’s a problem for under 50% of the population. What about the other 50% plus many of whom receive the educational maintenance allowance. With poor families already having to carry the biggest % burden of the cuts (and the bulk of the job losses) plus no more family allowance, how on earth are they going to even travel to college?

    I’m aware of 16 year olds already giving up on certain colleges for next year as there is no way they can afford to travel to them.

    So now we’ll have large numbers of unemployed teens with no money, little incentive and a godawful negative attitude to the society that’s dumped on them. I hope I don’t meet them down an entry.

    My University days were all paid for by the state. I have always assumed that my tax would do the same for all children. It would have crippled me to have left Uni with the mountain of debt student’s now face. You can spin the loan details anyway you want. It’s still a huge unacceptable debt to start your life with.

  • Johnny Boy @ 7:57 pm:

    National Insurance upper earnings limit: £43,875 p.a..

    20+11+9 = 40

  • The Raven @ 8:03 pm:

    Fair enough: you don’t believe in “education”, you believe in “instruction”.

    There is a profound difference; and it was nicely spelled out by Stanley Fish in his New York Times Opinionator blog, just yesterday.

  • Johnny Boy


    I’m sorry I didn’t realise I should have included national insurance contributions for the basic rate tax payer, and not for the higher rate tax payer in your spurious comparison.

  • The Raven

    @Malcolm Redfellow

    I don’t that’s a fair comment on what I am saying. If you had said, “Fair enough: for the times that’s in it, you believe that kids should be coming to the employment market with use-able skills”, you’d be closer to the mark.

    I write this, dashing off for something else, without having read your link – I will, later. You always find the interesting stuff.

  • JAH,

    “My University days were all paid for by the state”

    Lucky you but I think you meant to say My University days were all paid for by the taxpayer”.

    But you mention the problem as you see it, what’s your solution? If the students are to get our hard-earned dough which other sector would you take it from?

  • DC

    If the students are to get our hard-earned dough which other sector would you take it from?

    If we are going to wipe the slate clean and get all philosophical about this sort of “taxpayer guilt” then the “sponsoring private sector” aka Southern English can give back a proportionate and fair amount of money and wealth they once extracted out of Africa. (And I can’t even be bothered to mention just how much the bankers got and received in taxpayer support.)

    Why do you think the southern English as a cohort have more money than the colonised and periphery regions to date?

    Let me see: think slavery and the concentration of capital and assets and trades built up in those boom years, the boom years when people worked for free for their masters – America got relatively wealthy off the back of it as well. Then there was feudalism and so on etc. And even the English nouveau rich are only rich because the bank of England keeps on printing money for them – if their fiat currencies were all forced to be pegged back to gold they’d be fooked and begging on the streets like the rest of us. Gordon Brown and his 5 tests re the Euro – there was only ever one test and one reason why Britain didn’t join: it was that their ability to print money and to give it to bankers to innovate in financial markets would have been greatly reduced; so the political and financial elites didn’t bother. (If there is actually a difference between the two?)

    The personification of the age of empire and such hereditary wealth can be seen in both Cameron and Osborne neither of whom have received the millions they are worth as a result of actually working for it – as a result of say of the ‘hours put in’! They live off very high rents which are collected off the back of those hereditary – family owned – assets.

    Much like Roman Obramovich has flipped and sold on state assets – in the very early days of Russian capitalist development – and other such oligarchs who have become billionaires; let’s not forget there was a country – namely England – that did similar such flips and got wealthy, it just happened centuries back. But the wealth still lingers on. (I imagine so too will Obramovich’s.)

  • Johnny Boy


    The only part of your spiel that is on topic is the quote taken from the original post.

  • Alias

    A person’s working income will be higher with a degree than it would be without it, so it is fallacy to claim that a self-financing a degree will reduce that person’s working income. It will reduce it compared to what it would be if they didn’t have to finance it, obviously, but not when compared to what their income would be if they didn’t have a degree.

    In the US, for example, a person with a professional degree earns an average of over three times the salary of a person without a degree. Even if the difference was only marginal in the UK, say 20%, then over 40 years that difference would amount to 200k unadjusted if his wage was 30k unadjusted. Whichever way you do the math, a person with a degree has a considerable advantage in earning ability over a person without a degree.

    That raises the question: why should those in the lower socio-economic groups be expected to invest in the future earnings potential of those who will be elevated to a higher socio-economic group? I see no reason for lower earning groups to invest in the careers of other people via taxation.

    Those to want to increase their earning potential by investing in a degree should finance that investment, not others who gain no benefit from it.

    The mentality here is one of entitlement. These students think that other citizens should work harder and forego a greater portion of their incomes in order to finance their career opportunities when that responsibility properly lies with them. Of course, these students will try to shift the burden to their parents, so the parents try to shift the burden to taxpayers.

  • DC

    Johnny Boy – not true because in response to O’Neill’s comment about the ‘taxpayer’ he actually got me thinking about the taxpayer.

  • joeCanuck

    That raises the question: why should those in the lower socio-economic groups be expected to invest in the future earnings potential of those who will be elevated to a higher socio-economic group? I see no reason for lower earning groups to invest in the careers of other people via taxation.

    This is an honest question to which I don’t know the answer. Do those people in the lower socio-economic you mention actually pay any taxes? Are there free grants available to the lowest income group (like I was in when I went to university)?

  • Mack


    Even if the difference was only marginal in the UK, say 20%, then over 40 years that difference would amount to 200k unadjusted if his wage was 30k unadjusted. Whichever way you do the math, a person with a degree has a considerable advantage in earning ability over a person without a degree.

    The adjustments are critical –

    200k over 40 years is worth something like £80-90k today. Then tax it. So £40-60k.

    Then subtract your cost £27k and you are looking at £13-33k.

    Next subtract the costs of compounding real interest – say another £5k. £9 – 28k.

    Next factor in the loss if 3 years earnings, and you are in the hole (loss) for whopping £81 to £62k…

    Worth it?

  • Mack

    The NPV calculation is a little harsh as the debt repayments are also spread over time and the salaries will probably increase with time. If the workers are lucky at least at the same rate as inflation or maybe a little above. It still should be discounted by something though. Maybe £150k would be fairer.

    Still not much advantage of a college education with those numbers…

  • joeCanuck

    One argument used in favour of subsidized education when I was going through University was that the higher salary expectation would result in more taxes being paid which would more than offset the subsidy. Is that no longer valid? I haven’t seen the argument used recently.

  • Alias

    Good posts, Joe and Mack – and not easy to counter.

    Income taxes rates vary, so those on lower rates that are presently excluded will be brought into that net as part of the process of bailing-out financial institutions, in addition to what they already contribute via indirect taxes. The essential point there is that the ordinary taxpayers is being asked to invest via taxation in increasing another person’s earning potential in the marketplace where no benefit will accrue to the investor. It would be different if they were investing in a business that would create employment or a benefit to the economy that would indirectly accrue to them rather than just investing in an employee. I don’t see why I should donate a part of my income to finance, for example, a law degree for somebody in Limerick or an Arts degree for some Pole who is here as an EU citizen to benefit from my money and will return to Poland when I have financed his education…

    It’s cheating not to adjust the projected incoming monetary values for inflation if you’re adjusting the outflowing values for it. What was the cost of a law degree 40 years ago? Probably a great investment as far as the average 65-year-old legal eagle is concerned. But the example was marginal, and in those examples then a benefit-cost ratio is unlikely to predict a good return on the investment. But I think that folks would still rather, for example, teach than clean toilets so they will still make that investment in marginal examples for non-monetary reasons.

    These are essentially privavte career choices, and it is not the business of the state to finance them.

  • Alias

    “One argument used in favour of subsidized education when I was going through University was that the higher salary expectation would result in more taxes being paid which would more than offset the subsidy.”

    The state could achieve the same result for less cost by simply increasing taxes. Anyway, it isn’t a valid argument since the job is not created by the degree and the taxes would still be paid irrespective of whether or not the state funded that employee’s degree.

  • Brian

    I worked my way through college in the states. These punks can do the same.

    They will probably get more out of it as they will take more seriously. Those who don’t have to pay, in my observation, were much more likely to treat it like a 4 year party interrupted by exams.

    Although I do with they had given more of a scare to the royals lol

  • joeCanuck

    the job is not created by the degree and the taxes would still be paid irrespective of whether or not the state funded that employee’s degree.

    That would be true if it were a zero sum game. And that is true for some degrees; we probably only have a steady number of jobs for psychologists, for example. But some degrees can result in an increase in total employment through engineering enterprise, for example. Could expand on this if you want to. Did our “troubles” result in an increased number of solicitors and barristers?

  • Alias

    Joe, the EU has an open immigration policy. One of the advantages of that policy is that particular categories of workers can be imported if they are required. One of the disadvantages is that taxpayers in one member state will end up paying for the education of citizens of another member state if they offer a subsidised education that willl serve as an incentive for students to travel freely from one state to another to claim the subsidised education of that state. It is not possible to limit subsidised education to British citizens only, so the British will end up paying for the education of foreign citizens who will offer their economy no benefit. Open immigration equals the end of the welfare state.

    Incidentally, if it is the case that a degree doesn’t lead to an improvement in a person’s socio-economic circumstances then what is the argument for the State paying for that degree? It then makes all taxpayers worse off and offers no economic benefit to that person. If the benefit of a degree is personal and not economic then there is no case at all to make that taxpayers should finance that person’s pleasures, pursuits or indulgences.

  • joeCanuck


    Agree with much of what you say. Personally, I went into a job initially where I felt I would be repaying society for their contibution to my education. I did have other possibilities, particualy in guided missile technology with a number or firms. Same when I emigrated to Canada which country was desperate for experienced engineers. I did do a calculation to determine wheter or notI I had repaid my personal debt to society through my increased taxes; I was earning twice the average wage at that time. I don’t claim in the least to be a “saint” but I did hope that some fellow students did realize the debt they owed to others and acted appropriately; but I’m not naive – more usually “self” comes first..

  • aquifer

    If we want to make university attractive to students from les well off families that have a shorter financial time outlook, make the first year free. If they love their subject they will stay, and we will all be better off.

  • PaddyReilly

    Some of the talk here about it ‘not being real money’ reminds me of the way we got into the housing bubble and current economic downturn. The making available of funds from never-never-land is a good way to encourage the education providing market to increase costs till they match the money which is available to pay for them.

    To train someone as a chiropodist takes at most six weeks, yet I believe the current BScs take three years.

    Basically, if there is a need for trained personnel in a field, should not the industry be paying for the training, and if there isn’t, should the training be allowed to take place at all?

    Do we need a degree in drama? If we do, can it not be got over with in 1 year rather than 3? Why is it that army officers can qualify after two terms?

    The legal profession works by homing in on two people with a legal dispute, and using this to extract their money until there is none left. The educational establishment works on a similar principle: if there is more than one candidate for a job, it sells one party higher and higher qualifications until his rivals run out of money and he sails into it.

    I seem to be the only person who thinks that economy means not spending money when you do not need to, and especially when you do want to.

  • tierney

    Mack’s numbers are generally spot on but in this case I think the cost of annual maintenance has been left out – usually assessed at £6K per year, so another £18K on top of the cost of fees for a total start-off debt of around £45 K (although the government will not provide loans to the full value of the cost of maintenance). This is an addition to the £30-45K one can reasonably assess to be the level of earnings foregone whilst taking the degree – although given that many people taking degrees would presumably in fact, in the short run, be able to get higher paying jobs having a high level of academic qualification at 18, the real amount foregone may be higher.

    Add to this the fact that the differential between graduate and non-graduate earnings is generally overestimated – figures are frequently taken from graduate recruitment agencies, which cater for specific types of graduate jobs, not the job market in total. The figures provided by the Office for National Statisitics are always lower. I don’t know of any studies that follow through earnings for specific kinds of degree (aside from the obvious, such as medical). In addition, differentials are often quoted on the basis of variation in graduate and non-graduate salary for people say, in the their mid-30s: i.e. for a cohort when around 15% of the population went to university, rather than the 40% today. Obviously this expansion in student numbers is going to cause the differential to shrink. It thus becomes highly debatable whether a degree will pay for very many people.

    I dislike the new fees arrangement, but the objections to not just rest on the finances. Education is arguably a public good, where peope are taught to think, discuss, and engage in wider public debate, as well as acquire skills related to ’employability’. These social benefits are not easily captured in market returns, and indeed to try and do so could be seen to undermine some of their most salient virtues. Degrees are not to be differentially priced (and if they were, why not A-levels too?). Equally, the premise of this reform is essntially the privatisation of great swathes of university teaching. This government is very keen on providing new, stirring narratives of national history, but it is no longer prepared to invest in the teaching of history as a good of wider benefit to the populace.

    Those who believe Nick Clegg when he argues most universities will not charge near the fee limit are completely wrong. Universities have no choice – in most cases, teaching an undergraduate costs £7500, and there aill have to be a buffer aganist variation in numbers, and a likely decline (given that we must expect students to behave like any other group purchasing a good – is demand so inelastic that a trebling of price will make no difference?). everyone who can is going to charge £9K – and indeed, they are worried that charging less than this will be seen as a marker of lower quality devaluing the degree. I’m a university insider, and this is what I see happening.

  • Mack

    I think the whole debate in general has been hijacked by vested interests so as to persuade the turkeys to vote for Christmas.

    90% of courses are not worth €27k, 90% of courses (or more) could be delivered for a fraction of that cost. Universities don’t just teach undergraduate’s – but why should they, and not taxpayers generally subsidise the other activities if society deems them valuable?


    The essential point there is that the ordinary taxpayers is being asked to invest via taxation in increasing another person’s earning potential in the marketplace where no benefit will accrue to the investor

    Yes. There is only an indirect benefit. But let’s think of the cost.

    9k per year. 9 * 7 = £63k.

    That should be enough to pay for a whole year of teacher time (standing in front of a class or preparing classes or exams).

    Given an 7.5 hour day and 220 working days a year that is 1650 hours a year. That is probably enough to deliver 1 year’s worth of college level teaching.

    So after the first 7 pupils on a course, is it fair to say that any additional students are paying for the facilities (buildings, heating & electric, general running costs for teaching) as well subsidising research projects (and their use of the facilities), perks for staff, junkets, conferences etc, and general waste within the system.

    How is this fair?

    Business 101 – you charge at value not cost. British universities (like their American counterparts) are doing neither. They are ripping off students.

  • DC

    These social benefits are not easily captured in market returns, and indeed to try and do so could be seen to undermine some of their most salient virtues. Degrees are not to be differentially priced (and if they were, why not A-levels too?).


    It could be emulated in health service policy – more fees there?

    Or it could be emulated even in schools as well.

    Or even the police service! Why should society pay for the police to come out and check out *my* burglary?

    The concept of taxation is one that the state lifts money or redistributes blocks of wealth for the benefit of society – for wider social reasons, not just for the individual – which is what these fees are all about – loading the individual with debt.

    Currently we have two very wealthy leaders – the PM and deputy PM, both of whom have enough disposable cash to see beyond the necessity of the state and just because they can pay high market prices for education and health, doesn’t mean others can.

    Rather than cutting the individual loose, the battle of hearts and minds needs to be won on the concept of progressive taxation, of effective regulation and of legislation.

  • Mack

    Another way to think of this is to as WWMoLD?

    What Would Michael O’Leary Do?

    My guess is he would segment college places into various graduate premium and discount levels. I.e. Like the business next day travel, a place on a medicine course might be regarded as a valuable premium product. He would charge accordingly.

    The premium products would be used to cover most of the fixed costs (buildings, running costs for the courses).

    The remaining courses would be used to generate extra profits by maximizing the utlisation of resources. So what might happen is that once a non-premium course had attracted a sufficient number of overseas students to pay the lecturer’s wages, prices would be heavily discounted for locals. That way a social anthropology degree would probably only cost £1,000 per year, or maybe even £1 (+ taxes)..

    Also, my guess is that lectures would run right throughout the year and courses (advertised for three) would finish in 2 (at your scaled down graduation ceremony a tape recorder will play a little trumpet)..

    I think Michael O’Leary could probably provide most (non-premium) undergraduate university degrees for less than £5k – all in!

    & the guys at could probably do it online for £500…

  • Mack


    Good point about cost of living expenses. There may an element of doubling counting in including that, but some students may incur extra expenses above and beyond those they would have incurred had the worked for the three / four years (and lived at home, gave their liver a break for example)..

    . Universities have no choice – in most cases, teaching an undergraduate costs £7500

    I doubt it. In an undergraduate course with 100 students that is £750,000 per year. How many man hours are spent lecturing them, or preparing them? Per year for most courses I’d would venture less than 2000. (That is 60 hours per week lecturing and preparation * 30 weeks is 1800 (just over the cost of one f/t lecturer) – even an incredibly excessive 300 hours per week gives you 9000 hours which is equivalent to the workload of just over 5 full-time teaching lecturers).

    What’s being bundled up here are all the inefficiencies of the university system, coupled with a proportion of the costs incurred by universities other activities (and low utilisation of resources).

    Academia provides a nice lifestyle for those lucky enough to work in it. Expecting undergraduates to bear the bulk of that cost (60% according to the fees facts link) is unreasonable, unless the system is streamlined to meet their needs (rather than suiting the work lifestyle of the staff).

  • tierney

    90% of courses could be delivered a for a fraction of that cost? Really? this time I am more dubious about Mack’s numbers. A subscription to a journal on-line can cost hundreds of pounds. Any effective working university needs very many of these subscriptions to be able to effectively operate even one course – aside from costs of books, lab equipment, etc. etc.

    Yes, there is undoubtedly ‘cross-subsidy’ from teaching to research – just as well, given the slashing of the research budget. At least fees present a means to make up losses in the cutting of the teaching budgets. But without good research what, pray, would there be to teach? These are not independent processes, whatever accountants might think.

    Junkets? Perks? Could you tell me what these are exactly? Are conferences not a legitimate part of academic life all of a sudden? I suppose businesses shouldn’t hold ‘meetings’ either – ripping off the customers! In practice, most academics pay at least some conference costs out of their own salaries. Indeed, in some universities it is now offical policy that academics on higher salary scales actually have to pay their own conference costs (as well as membership of learned socieities, journal subscritions, etc.). Academics in the UK are not badly paid (whilst not being especially well paid by northern European standards). And there is without doubt scope for efficiency savings in many parts of university life. But I am not sure where waste as a systemic problem is.

    Certainly, the introduction of a market that still imposes strong constraints on courses that the government doesn’t actually pay for any more, and relfects neither cost to the provider or benefit to the consumer, is a strange market indeed.

  • I feel this could be preached on the text of 1 Timothy, 6:10.

    The longer this thread drags on, the more obvious it is that the difference between us amounts to

    ¶ the concept of what “education” is;

    ¶ why proper “education” is different from “training” or “instruction” or “(pre-)work experience”; and

    ¶ what a university should be.

    We are therefore locked into a sterile conflict of personal versus societal gain.

    We are a degenerate lot. I doubt that any previous generation (or most societies outside the UK) would reduce the benefits of education to a mere “personal” good.

    For those who cannot see the point of a wide “liberal education”, I suggest they consider the implications of unbridled scientific experiment where moral scruples are not present. We have, after all, been there in the not too distant past.

    For those of a whit more imagination and culture, I suggest Dickens, back in 1854, illustrated the matter in Hard Times. See if that opening paragraph seems familiar:

    “Now, what I want is, Facts. Teach these boys and girls nothing but Facts. Facts alone are wanted in life. Plant nothing else, and root out everything else. You can only form the minds of reasoning animals upon Facts: nothing else will ever be of any service to them. This is the principle on which I bring up my own children, and this is the principle on which I bring up these children. Stick to Facts, sir!”

    Continue reading and you meet the delightful and imperfect Mr Sleary, and how his view defeats the utilitarianism of Mr Gradgrind.

  • Mack


    You are getting very defensive.

    The issue is who should pay for these and why?

    If there are inefficiencies, I don’t think these costs should be visited upon the student.

    Example : Costs in the industry I work in (Software) have been revolutionised by open source, wiki’s and the web. Information and licenses that were once incredibly expensive are now free.

    Why should student’s subsidise the producers of academic journals? (Look at what is happening to other publishing industries today).

    (Also aren’t these fixed costs that can be reduced by scaling?)

    Junkets? Perks? Could you tell me what these are exactly? Are conferences not a legitimate part of academic life all of a sudden?

    This is very defensive. The cost of this shouldn’t be visited upon the student. They benefit from it only very indirectly and randomly. Research & knowledge sharing does push out the boundaries but it is a slow process, and undergraduates only ever need to hear about a tiny fraction of it.

    The value they receive is from the teaching, that is what they are paying for.

    If society in general wants to subsidise it (and I have no particular objection to that) then that is fine. But foisting these costs on students, via predatory vendor financing is immoral.

  • tierney

    @ mack,

    Well, that’s how the accountants price it. I’m very happy for undergraduates to directly carry less or none of that cost – so long as somebody pays for all the costs that are currently allocated to teaching.

    Since when have lecturers been supposed to work 60 hour weeks (some do and some don’t, but that’s besides the point)? Of course universities don’t administer themselves – academics play a major role here – as well as other functions (welfare, for example). Again, I don’t dispute the scope for improved efficiencies, but I doubt they are of the scale you imply.

    It should be noted at some point too that students don’t get given degrees for merely turning up at university for 3 years. Some of them actually work for them. This is obviously true of anyone doing any kind of course, but too often university degrees are being discussed as if they are some kind of gift, and that they did not actually require some effort to get there, and complete them.

  • Mack


    I suppose businesses shouldn’t hold ‘meetings’ either – ripping off the customers!

    The way to think of this (which might diffuse the situation) – is that the customers don’t pay for the meeting.

    Let’s say Samsung employees spend half their time in meetings, but Apple employees only a couple of hours a week.

    Would you be willing to pay substantially more for a Samsung Nexus S, if they decided to double the cost to subsidise those meetings, or would you stick with an iPhone 4?

  • Mack


    Since when have lecturers been supposed to work 60 hour weeks (some do and some don’t, but that’s besides the point)?

    They’re not, there’s 52 weeks in the year (220 working days, 7.5 hours per day). I’m just getting a handle on what the cost might be if academics only taught students. As that’s really the only cost students should be covering..

  • tierney


    I agree that the costs shouldn’t be foisted on students, so we’re all sweetness and light there. I dispute (in an entirely friendly fashion) your description of costs, and our ability to differentiate usefully between ‘teaching’ costs and others. To put it another way, can universities reasonably accuratelt attribute the contribution of particular activities to the marginal value of teaching? It is rather doubtful, any more than companies can in many cases clearly distinguish what exactly contributed to the development of any particular product.

    The objection to the 60 hour week still stands, doesn’t it? given that, in fact, academics are supposed to be spending 40% of the year doing research and other acitivites. Equally, much as I generally admire your facility with numbers, the ‘meetings’ comparison is spurious, because it suggests that students receive no benefit at all from conference attendance (again, I note, I would not charge the students these tuition fees). I can tell you very plainly as an academic teacher that this is not true. Conferences can feed very directly into teaching – and ensures they get access to the latest research.

    As for the price of academic publishing, this may be right (publishers are charging according to salebable value and not cost, perhaps? To be honest prices are virtually entirely determined by the American market). But open access may be difficult to reconcile with a culture where peer review is a an essential marker of quality, that leads to an inevitable hierarchy of journals and information. Students who write their essays off Wikipedia don’t do so well.

    As for the ‘junkets’, clearly this is a pejorative word as you well know, so please tell me what they are, so I can make sure I am riding that particularly gravy train, or at least enjoy the fact that I am riding it in the full knowledge of doing so!

  • Mack


    Most people would regard flying off to a conference in a foreign city of a few days a ‘junket’, I’ve even been on a joint academic / private sector conference ‘junket’ myself.

    The objection to the 60 hour week still stands, doesn’t it

    No, I think there is still confusion here. Normally businesses charge at value, if the costs exceed the value you don’t have an ongoing business.

    One alternative structure, that might give insight into pricing, might be to imagine an ecosystem in which public universities focused on research and didn’t teach undergraduates. Dedicated, privately run universities would teach the undergraduates (but not do research).

    The teaching universities would hire lecturers from the public universities to teach and prepare courses on hourly contract rate.

    So, a given course might require 60 hours per week (sometimes called ‘man hours’ – because any person can fulfil those hours, it’s not necessarily the same person) to deliver the course. The cost of running the course to the teaching college would 60*lecturers’ hourly rate + cost of maintaining their facilities. I sincerely doubt that cost to the teaching-only colleges would be anywhere near £7,500k.

    (Especially if there were people like O’Leary or the WalMart team let loose on driving out any inefficiencies out of the teaching colleges).

  • tierney

    @ mack

    Okay – you could abolish the ‘research-led teaching’ we are all told to do – and which is clearly better. And you could indeed set up the kind of structure you suggest. I’d suggest in turn that the division of costs is still aribtrary, but we can agree to disagree on that. I don’t reall see what it has to do with your imputation of a 60-he week to a fill-time lecturer either.

    On the junkets, fair enough, I engage in research with colleagues in various different countries. If we’re effectively to work together, we have to meet face-to-face occasionally. If doing this is a ‘junket’, so be it (in fact most meetings are tagged onto conferences to save costs). But it’s not how people usually describe business travel. Sometimes the conditions for doing this are pretty nice (we’re not all fools). Sometimes they’re not (1-2 day trips to the west coast of America to be inside a hotel the whole time and come straight back again… ? Hmmmm… unless hanging round airports is your idea of a good time.)

  • Mack @ 11:08 am:

    Let’s say Samsung employees spend half their time in meetings, but Apple employees only a couple of hours a week.

    Would you be willing to pay substantially more for a Samsung Nexus S, if they decided to double the cost to subsidise those meetings, or would you stick with an iPhone 4?

    [No: because one runs Android and the other a great OS.]

    However, that was the moment the argument flushed itself away.

    Android is a product of Google (and a goodish one, apparently). Google has an astonishingly liberal attitude to its employees. Cross-fertilising ideas over demarkations (tech/non-tech) is positively encouraged (as in a proper university). Indeed, Larry Page’s concept, the Google HQ at Mountain View, CA, operates very much as an ideal university campus, but without faculty/student division, and with free cafeterias, hair-care, laundry, dry-cleaning, transport …

    Result: ever-improving productivity and exponentially-improving revenues.

  • Mack


    Sounds positively terrible, perhaps you should consider an alternative career as a miner? 🙂

    I’m not an academic, although family members are. It’s 10 years since I’ve been in a university, I don’t know how your working day breaks down today. I do have an idea roughly of what it was like to do an undergraduate course (and even a pg course).

    The structure suggested is a though experiment so that you can separate out the delivery of the service to the student and the other activities and work out a way to put a cost on the service delivered to the student. If lecturers are contracting their non-research time to the private colleges they can provide any service (just like any software contractor) to their employer. You could transfer over any service provided directly to the students there is no need to drop anything. It’s all just fungible time at an hourly rate within the constraints that services of direct benefit only are charged for (preparation or service delivery) – other academic functions get paid for by the state.

    You are a smart bloke, I know you could do this, even if it is moderately complex, but my guess now is you are opposed to doing it on principle.

    It reminds of the old anecdote about the monkey’s beating each other up over company policy, because, we’ll that’s just the way it is 🙂

  • Mack


    And their services are delivered free to the end user too.

    And the advertisers pay directly for measurable value.

    Hurrah! No one is getting ripped off..

  • Mack


    Although cynics have suggested the purpose of the free food, laundry etc is to reduce the need for young staff members to go home 🙂

  • DC

    separate out the delivery of the service

    Is teaching a service?

    Trouble is as Mister Redfellow highlights:

    ‘¶ the concept of what “education” is;

    ¶ why proper “education” is different from “training” or “instruction” or “(pre-)work experience”; and

    ¶ what a university should be.’

    Now if you start stretching the definition of things such as superimposing marketable terms onto lecturers and teaching with that you stretch the definition of what it is to be lecturer and teacher.

    The theory becomes all the more ropey as do the concepts if you stretch private sector definitions over long understood public sector ones.

    What I’ve come to learn over the last while is that having the private sector run public services under contract is an entirely different thing to the marketisation of public services itself. Such as students becoming customers and hospital patients consumers of hospital services.

    It is a flawed theory. You need to ask yourself whether this customer service approach to public services is done by design, or lazy default (which could be more appealing in terms of pitching the policy to the public in an understandable way, but over the long run it may not be actually be such an effective approach in practice.)

  • Mack

    Ok DC, just continue to charge the students for the whole shebang…

  • tierney

    @ Mack

    Of course, I realize that the whole of the rest of society works in the vast mining industry I look down on from my ivory tower, and so I count my blessings every morning (though don’t y’know that libraries can be very dusty?). Aside from a few in software, of course. I hear with terrible industrial accidents they sometimes get trapped for months in front of flickering screens with no hope of rescue.

    Of course, you hit the nail on the head. I am not inclined to go for the solution you propose, which is close to models some people in higher eucation would very much like to see – usually managers rather than academics. As is often found with shoehorning institutions that are actually quite flexible and innovative into solutions to satisfy accountants, I suspect you would just greatly increase bureaucractic costs, while reducing the extremely valuable synergies between teaching and research (even if sometimes done by the same people) and provide a worse service to students (who value proximity to research, which would be harder to maintain for various reasons which I won’t go onto now). It’s true that this might vary from subject to subject, which is perhaps an argument against the one-size fits-all model that to some degree exists in the UK. But we can get round the problem of charging supposed direct costs to students simply by not trying to charge the students a notional full value tuition fee, and be done with the whole argument. Unsurprisngly I am in the camp with others who see education as a public good. But even if I wasn’t, would the intervnetions required to put an imputed cost on the direct service to the student actually save money or add value? I doubt it.

    Your model though probably points the way ahead in that students (who by and large have very little idea of how lecturers spend their time or what goes into preparation) are going to hold staff to account for their time to an increasing degree. Contact hours will increase, which will be a good thing, on balance (and students will perhaps make better use of them too). Becuase the academic process is relatively poorly understood, people are going to start treating contact time as if it is indeed an hourly fee and there is going to be a lot of upset as a result. In fact, ‘hourly rates’ don’t even remotely reflect input into teaching. Students these days don’t quite expect lecturers to be on e-mail call 24/7, but it’s moving in that direction (and this can in fact promote good habits of academic inquiry and discussion) – aside from the myriad things that go into preparation.

    At least, with new funding constraints, they won’t be paying much for conferences, you’ll be pleased to hear, as these will have to be externally- or self-funded anyway.

    A final ote – given its international profile and publishing record – albeit aided by being the original home of English – one could argue that the UK university system already has a strong claim to being the most efficient in the world, given the low spend on higher education as a share of GDP. Perhaps the people running Harvard and Yale should be wondering how Oxford and Cambridge do it on a third of the money?

  • DC

    Well Mack – if education is a service and I want a product of say a 2:1 can i get a refund if the service doesn’t deliver me that end 2:1 product?

  • Mack


    It’s not a solution, it’s a thought experiment that allows you to separate the various costs that can be used into inputs to determine a reasonable ceiling for fees. In my view it isn’t anywhere near £7,500 (or £9,000) for most courses.


    Of course not. You can expect a reasonable quality of teaching and rigour and fairness in grading (you do want that 2:1 to mean what it says), but not any particular outcome.

    Can I sue Nike because I didn’t get scouted by Man Yoo after I bought my predators?

  • DC

    Well if I pay money to get my car serviced I expect it to be done right and to a certain definable standard, not the same thing then for education?

    I’m not against the concept of tuition fees or raising money off the back of those people that have gone through university and got the benefit of it, but if there is to be a balance it’s best to make sure the conceptual analysis is right – and definitions mean what they say they mean.

    I think the service approach in education could work if universities offered: a 1st or a 2:1 – or your money back approach 🙂

  • Mack

    Well if I pay money to get my car serviced I expect it to be done right and to a certain definable standard, not the same thing then for education?

    Yes, it is exactly the same, the equivalent service is the teaching (and not the result – driving / marks). You don’t sue the garage if you drive out of their premises and straight into an oncoming truck.

    The students still have to take the materials they are given and make the best use of them.

  • DC

    Not quite the same thing Mack – but you are right I wouldn’t sue the university for say carrying out a wrong operation despite having left their institutions fully qualified as a doctor, qualified up to a certain professional standard.

    It’s the getting qualified to a certain standard bit I’m concerned about, as a fee payer.

  • Mack


    I don’t you can purchase qualifications – only teaching or the right to sit an exam. If you could, no employer, customer or patient would trust them and they’d be inherently worthless – so why pay for them?

  • DC @ 1:50pm:

    Nice to see you back so promptly after PMQs.

    I think the service approach in education could work if universities offered: a 1st or a 2:1 – or your money back approach.

    That’s already a significant problem in HE. Have you not heard of “grade inflation”? Who, in that view, controls the teaching, and to what end? Take it further, and what cannot be gained from “distance learning” that requires the face-to-face teacher?

    My previous reference to Dickens (way above your heads, obviously) reminds me of a recent conversation. This, too, illustrates for me the difference between “university education” (as I understand the term) and an instructional degree-mill (which is what others, including people who should know better, intend for us).

    Anecdote begins:

    I entered one of my usual resorts to see an acquaintance gazing dismally into a half-empty glass. I bought the refill and hoped to engage him in uplifting literary conversation.

    However, he narrated the cause of his despair.

    He is an expert in 19th literature, teaching at honours-degree level. With a colleague he had been explicating the structure of Dickensian fiction to a class. The colleague was carried away to illustrate the episodic nature of a typical Dickens novel, which derives from original publication as fortnightly magazine episodes.

    Up went a student’s hand: “Question! Will this be in the exam?”

    The only possible answer there is on the lines of “not specifically; but it’s probably necessary to bear in mind, to understand how the piece works, how the writing was done, and how it impacted on the original readership.”

    Soon after the lecture, my acquaintance and his mate were summoned to Higher Authority. A complaint had been lodged by students about deviation from the prescribed syllabus. Reprimands were administered.

    Anecdote ends

  • Michael Shilliday – I salute you. I completely agree.

    I’m also rather annoyed at you as I was intending on writing this very blog post tonight.

    I think I will anyway…We need more common sense talkers.