By Fiona Edwards
One of the most popular policies put forward by Labour at the General Election in June was Jeremy Corbyn’s pledge to scrap tuition fees. It is a policy which is transforming the political debate on higher education. After 20 years of escalating attacks on education and a political consensus that burdening students with mortgage sized debts is the way to fund higher education, this bold new approach for free, publicly funded education at all levels has set the agenda and put the Tories on the defensive.
Labour’s policy chimes with public opinion with a recent opinion poll revealing that 58 per cent supporting the scrapping tuition fees altogether. It is an issue which has particularly enthused young people and was a major factor in increasing the youth turnout at the General Election and also in increasing Labour’s share of the vote amongst 18-24 year olds from 43 per cent in 2015 to 62 per cent in 2017.
Britain’s higher education system is in crisis. The lack of public spending on the sector combined with an approach of transferring the cost of education onto individual students and their families is at the heart of the problem.
The last Tory-Lib Dem Coalition government trebled tuition fees to £9,000 and the present Tory government are now allowing fees to increase year on year in line with inflation with students currently paying £9,250 per year.
Graduates who paid £9,000 a year tuition fees are leaving university with an average debt of £44,000 compared to the average of £16,200 prior to the trebling of fees in 2012. The Institute for Fiscal Studies (IFS) has calculated that young people from the poorest 40 per cent of families entering university in England for the first time this year will graduate with average debts of around £57,000. The huge debts acquired from attending university act as a deterrent on poorer students accessing higher education.
After graduation this debt burden rises even further due to the Student Loan Company’s interest rate which is set at the Retail Prices Index (RPI) which is currently at 3.9 per cent plus an additional 3 per cent on top of that. As the Financial Times points out, “at today’s rate of inflation this debt would take just over 10 years to double, a penalty on learning that is blatantly unfair.”
It should come as no surprise that the IFS anticipates that 70 per cent of students who left university in 2016 will never finish repaying their student loans after 30 years of repayments.
Under pressure from the popularity of Corbyn’s policy to abolish tuition fees, both the Tory front bench and Labour’s right wing have put forward fake concessions which are presented as antidotes to the student debt crisis when in reality these “alternatives” would change very little materially.
For example, Tory Chancellor Philip Hammond is reportedly looking at lowering tuition fees from £9,250 to £7,500 per year. But £7,500 fees, alongside high interest rates, would still see graduates repaying tens of thousands of pounds of debt over several decades. And given 70 per cent of graduates are currently anticipated to never repay their total debts, it is possible that Hammond’s proposal to “lower” fees is a cynical calculation which will make no material difference in how much the majority end up paying back but increase the percentage which repay their debts simply by lowering the threshold.
At the same time, there is a Labour right wing proposal to “replace” tuition fees with a graduate tax. Under the current system, tuition fees are paid after graduation through monthly repayments which act like an additional tax on graduates. Compulsory student loan repayments are imposed once someone starts earning over £21,000 at a rate of 9 per cent of their income above that threshold – and these repayments last for decades. If a graduate does not finish repaying the loan within 30 years, the outstanding balance will be written off. The current system is therefore already a “graduate tax” and those on Labour’s right who advance this “alternative” to tuition fees offer nothing more than a change in terminology. A “graduate tax” is simply a euphemism for student debt and does not differ from the current system of tuition fees which are also paid back via monthly repayments as a percentage of graduate’s income over decades.
Only Corbyn is offering a progressive way forward. Free education is the norm across Europe and it is entirely possible for tuition fees to be abolished in Britain – a step which would improve the living standards of millions of people by relieving them of the burden of massive debt as well as immensely improve access to higher education for poorer students. Free higher education is good for the whole of society and the economy; it creates jobs, boosts growth and is an investment in creating a highly educated and skilled workforce.