‘The system we have got overall is the worst of all worlds.’
Rt. Hon. Bridget Phillipson, UK Education Secretary
It was good to see Bridget Phillipson’s plans for tackling the knotty problem of student finance in The Times’s lead article on Saturday’s front page.
The critical state of university finances has featured heavily in the media recently, with UK student fees having been fixed for several years while the number of foreign students continues to fall. International students accounted for 24% at English universities in 2020/21 and they paid 40% of tuition fees: so the reduction in their numbers is a serious issue for university finances.
Meanwhile outstanding student loans have ballooned to £236 billion as reported on last Friday’s front page in The Times, and the Guardian reported earlier this year that the student finance system is expected to cost Government over £10 billion per year.
But it's not just the raw cost to universities or to the state. We have drawn attention in a number of our commentaries to the real — and psychological — burden of graduating with £50,000 of student debt. It's a major deterrent to getting started in adult life, and it contributes much to delaying family formation and independent living. The system also works against encouraging equal opportunity: those whose families can afford student fees will not be held back, but the loan system is a significant deterrent for disadvantaged young people to spending three years as an undergraduate.
That’s why Bridget Phillipson is right to say that we need a new approach for empowering disadvantaged young people, and she plans to re-introduce maintenance grants for disadvantaged students. The dual impact of socialist universality which has been acting to limit the extent of much needed targeted support, and of short-term political economics (which invariably resorts to debt to resolve problems), is not working.
Inter-generational rebalancing could do much to get us out of this fix, if Bridget Phillipson is able to persuade Rachel Reeves to establish a strategy for hypothecating inheritance tax.
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