Last week the final German state to charge tuition fees for higher education announced they would be coming to an end. The reason for Germany’s reversal of their experiment with tuition fees was that they are “socially unjust” as “[t]hey particularly discourage young people who do not have a traditional academic family background from taking up studies” said Dorothee Stapelfeldt, President of the Hamburg Parliament.
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On the following day reports from a Conservative party conference fringe event suggested that the current UK tuition fees system is unsustainable. Moreover, it was acknowledged that the current system of £9,000 fees is on the verge of bringing in less money than the previous system were students were charged around £3,000. This is because under the previous system the government contributed the rest of the fee while today they give nothing, except for some STEM subjects.
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With the new system students take out loans to pay the higher fees but these take a very long time to pay back and in many cases are unlikely to ever be paid. Of those holding loans (for living costs) from the time before tuition fees were charged only 14% are currently being repaid at all. The loans taken out in that previous era were only represent a total of around £10,00 per student whereas current students are likely to be indebted by around £40,000.
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The proposals which have been hinted at as method to deal with this situation were to raise tuition fees, probably to around £16,000, or to change the terms of the loans so students will be required to pay their loans back more quickly or will have to start repayments at a lower income threshold (currently no payments are taken until they are earning £21,000).
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I fail to see how raising tuition fees will help with this problem as currently very few people are repaying the smaller amount so all this is doing is creating a bigger hole. It is, however, likely tuition fees will rise as another admission was made that the £9,000 fee was always set too low as most courses cost more than this to run anyway. Therefore, it seems likely that the the fee was set at £9,000 only because a higher rate would be too unpalatable initially but now the public have been softened up to the idea of paying huge amounts for tuition fees seems almost inevitable.
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The second option, of changing the terms of the loans, is, then, very likely and was predicted at least a year ago. If this does happen it means that the higher fees will become an even more significant barrier to people from low income backgrounds. Previously, it was suggested that the good terms of the loan—repayments starting on a fairly high pay threshold, being staged with income level and being wiped after a set period of time—meant that there should be no barrier to those from a low income background as they only have to repay the loan if they feel the financial benefits of their “investment”.
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Of course it was always clear that this was a fallacy and the psychological impact of a big loan was significant. Nevertheless, even this argument will likely dissipate and the real social injustice of tuition fees will become clear. Will, then, UK universities be reserved only for the wealthy of the UK and the rest of the world? Also, will a worsening of the terms of student loans further the move towards a “monetary conservativism” amongst students, as I have previously suggested, with students encouraged to engage with higher education as consumers or prudent investors?
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