Tuition Fees: Let's Bust the Myths
Mark Thompson says the tuition fee changes have been poorly communicated. No kidding.
22 Aug 2011, 08:39
Misled on Tuition Fees?
This person is pretty well educated and I suspect does regularly watch the news but the fact that the money is paid back over 30 years following graduation by the recipient of the degree, not the parents of the recipient seems to have completely passed him by. He's not the only one from what I can tell. Various vox pops on radio and TV in recent months that I have heard and seen suggest that this misconception is pretty widespread and infuriatingly often not corrected by interviewers or presenters.
That such a basic aspect of the new system is so widely misunderstood is a pretty damning indictment of how the policy has been communicated. Lib Dem and Conservative ministers and MPs need to accept some blame for this. But another big problem as far as I can tell is that the media narrative has focused on the most negative and politically contentious aspects of the scheme. This has led to headlines such as "UNIVERSITY FEES TREBLED" and "LIB DEMS IN DISARRAY OVER FEES". Both of those things were true to an extent but the Lib Dem woes on this topic were focused on so much around the time of the parliamentary vote as well as the protests that I honestly think the substance of the policy was not properly covered. Which given how much airtime the subject was supposedly given is frankly absurd.
For me, the two main aspects of the new system that seem to be regularly misunderstood are:
1) It will cost parents £30K+ up front to send their kids to university. This is palpably untrue. The graduate, not the parents pays the loan back at 9% of income above £21K. And they don't pay anything back after 30 years regardless of how much they have paid to that point. So quite a few, probably most will never pay back the entire loan anyway.
2) Graduates will be worse off under the new scheme just when they need disposable income the most, in their 20s making it harder to get a mortgage. This is completely wrong too. Compared to the previous system, graduates will be much better off in their earlier years when trying to build a deposit for a house etc. It is of course true that they will still be paying through their 30s and 40s too (assuming they earn over £21K) but that's the trade-off.
There are loads more (see FOOTNOTE) but they are the two that have most irritated me.
I suspect there will be some who accuse me of being a government patsy on this, as I am a Lib Dem, but the truth is I would be saying this no matter who was in government. I am always happy to debate the consequences and fairness of policies with anyone but in order to do this properly, the facts need to be clear.
And far too often in this debate they are inadvertently or in some cases I suspect deliberately distorted.
FOOTNOTE: The widely respected Martin Lewis of the Money Saving Expert website who himself is no fan of the changes is nevertheless appalled at the terrible reporting on the subject (I heard him bemoaning it on Jeremy Vine's Radio 2 show recently) and has taken it upon himself to produce a "20 Key Facts" page which goes into great detail and busts a number of myths about the new system. It's definitely worth a read if you have half an hour.
Comments (10)
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Reporting on the tuition fees issue has indeed been dreadful.
The British establishment media has consistently refused to compare tuition fees across the so called "United Kingdom".
The BBC is especially bad at reporting the UK government line that we are all in this together.
We're not.
Only English students face £9k a year fees.
Scottish students will continue to pay NOTHING for their higher education.
Welsh and Northern Irish students will have their fees heavily subsidised.
This is the scandal of the whole affair - that the English have to pay while others do not.
It is of course no coincidence that the Scots, Welsh and Northern Irish have their own governments established to work in the interests of those nations. England has nothing - neither recognition or representation. All the English get is the UK government working in the UK interest.
English parliament NOW!
22/08/2011 08:53http://www.youtube.com/watch?v=55fKa-ErQ8E
This video (by Martin Lewis) is a good summary of the new system, and busts the myths mentioned in the article above. More accessible I think than the web site.
22/08/2011 11:55I was having a think about the sudden rush to get on a course this year.
I graduated in 1997. My tuition was free. I've since had jobs here and there and gone back to do postgrad courses a couple of times. Under the new English scheme I wouldn't have had to pay a penny for my education as I've never had a wage over £19000 a year. The current English system would have seen me paying back money.
All of this has to be communicated so much better. It would be interesting to see if demand for all courses except for mathematics and economics is up this year with applicants who know how numbers work not changing their plans.
22/08/2011 13:48Hmm, great article and I agree about the poor communication - but i wonder if it's the whole story. i think it's about perception as much as it is about the facts - I've blogged why if anyone's interested. http://aviewfromhamcommon.blogspot.com/2011/08/tuition-fees-its-not-just-setting-out.html
22/08/2011 15:33INCOME TAX
(1) Tax is paid only on money earned above £7,475 a year
(2) I will only pay what I owe now not all the tax I will ever owe ...I pay as I earn
(3) This is not debt....it’s income tax....
UNIVERSITY FEES
(1) Repayments are made only on money earned above £21,000 a year
(2) I will only pay what I owe now not all repayments I will ever owe...I pay as I earn
(3) This is not debt....it’s graduate tax....
See the similarities because they are one in the same. This has been a monumental information disaster, if Vince had been listened to we wouldn't be in this position.
But now because of the Conservatives hatred of the word tax 33% of parents are unsure of the system and many more are convinced of the wrong information !
22/08/2011 18:49re: Ewan Hoyle comment 22/08/2011 13:48:
"My tuition was free."
No it was not free, just paid for in a different way. Your tuition fees were paid in part by the HEFCE core grant to the University and by the educational grant from your LEA.
This change to the system, where the major beneficiary (you) pays directly for Higher education fees, frees up income tax and council tax income to be spent elsewhere.
re: P Wild 22/08/2011 18:49:
"This is not debt....it’s graduate tax...."
It's NOT a graduate tax - it will be an income contingent loan. For a given income you will pay back at the same rate whatever your (nominal) debt. The rate you pay back goes up only as your salary does (starting after the threshold of 21k). Outstanding debt is written off after time (currently 30 yrs from memory)m whilst you will continue to be a graduate for life.
23/08/2011 09:53@fleaTamer
Sorry but it is a graduate tax in all but name ..a loan is a debt which requires paying regardless of the income or ability to pay of the person taking the loan.
There is no requirement to pay this tax until you reach a tax allowance threshold of 21K no one will chase you for repayment if you drop below that figure.
A LOAN requires payment at a set agreed level until its paid off even if your income drops .
If it looks like a wet fish , smells like a wet fish...its a fish .
23/08/2011 16:23re P Wild: 23/08/2011 16:23
"A LOAN requires payment at a set agreed level until its paid off even if your income drops"
but the "income contingent" loan (using the government's phraseology) as proposed means the pyemnst WILL drop if your salary drops AND will be written off after 30 years.
24/08/2011 09:38re P Wild: 23/08/2011 16:23
As a follow up on a graduate tax, the following makes a case why this route was perhaps not pursued by the government.
"20 reasons why a graduate tax is a bad idea"
24/08/2011 09:45FleaTamer
But that's why Iam calling it a graduation tax because it does drop if you earn below a certain figure (in effect a tax allowance level of 21K) People understand that a loan requires paying back and is true debt...something the new system isn't because it doesn't if you don't earn enough. In any other situation that would be called a tax and needs to be called that now.
My argument is the media for what ever reason is determined to put off kids from poor backgrounds and I hear it all the time. "Oh I cant afford to send my kid to Uni next year because I cant afford the loan"...usually someone on a housing association estate!
Explain it side by side with income tax and they suddenly get it
24/08/2011 16:15