Please note that there is no one single coherent set of statistics covering higher education, spending and student numbers, all figures are approximate and for guidance only.
Let's sum up the current position before outlining our policies:
Currently, about 38% of school leavers go on to Higher Education, and there are around 1.7 million UK domiciled undergraduate students at UK universities.
This represents a vast increase compared to twenty or thirty years ago. The general perception and overall picture is that:
- UK governments have pushed more and more people into higher education to keep the official unemployment statistics down;
- too many people are taking 'Mickey Mouse' degrees;
- the 'graduate premium' (the extra salary you can earn by doing a degree) is being eroded; and
- faced with far too many applicants for a job, employers prioritise applicants who have been to university, regardless of what they learned.
So to a large extent going to university is just an arms race and a waste of time, effort and money.
Total funding for higher education
The UK government i.e. UK taxpayers, pay around £6 billion a year directly to 'higher education providers'.
Students are supposed to pay £9,000 a year towards tuition fees by taking out student loans. Only half of these will ever be repaid and the other half will never be collected. So the taxpayer contributes a further £7.7 billion a year indirectly (loans made but never repaid), and graduates end up paying £7.7 bn.
So the total cost of running universities is £21 billion a year (the taxpayer pays £13 bn of that) and the average cost per student is £12,000 per year.
Tuition fees/student loans
Student loans are not really loans in the ordinary sense, they are a graduate tax with a capped total repayment; so they combine the worst aspects of debt (they hang over graduates' heads) and the worst aspect of income tax (they discourage people from working harder and earning more). The whole thing is smoke and mirrors.
The total accumulated student loans are £60 billion (pdf) owed by 4.3 million people; the maximum loan that will be owed by somebody starting a three-year course this year will be around £44,000 (including maintenance loan). Half is never collected and the repayment period is up to 30 years, so the amount that is actually clawed back via the tax system each year is minimal (between £1 and £2 billion).
Currently, the maximum non-repayable maintenance grant is £3,387, payable to those with a household (i.e. parents') income of £25,000 or less; those with household incomes above £42,875 receive nothing.
The usual rules apply; a lot of university-owned student accommodation has been sold off and student numbers have increased.
The result is that around a quarter of students stay at their parents' house; a quarter are in halls of residence costing £80 a week and half are paying rent to private landlords for the lowest quality accommodation.
Having set out the position as at today's date, the way forward is obvious:
- We as a society need graduates, especially in the fields of applied science (biology, medicine, chemistry, engineering, statistics etc); research for research sake (physics); and for teaching future generations (the three R's, science and some social science and arts subjects to round things off). But we do not need an arms race where people will take meaningless degrees merely in order to improve their chances of getting a job.
- The UK government/taxpayer can afford to spend £13 bn a year on higher education (under 1% of GDP) and as an economy, we can't afford not to. That would cover the full tuition cost for over 1 million UK students.
- Instead of 38% of school leavers going to university and being saddled with student loans of nominal £27,000 for the tuition fees of a three year degree, it would be better for around 25% of school leavers to go to university - for 'free' - to focus on studying what the country as a whole needs.
- A core part of YPP's manifesto is for there to be a Citizen's Income (non means tested, non-taxable, non-contributory) for all working age British citizens, equal to Income Support rates (currently £72.40 per week). Students would be entitled to this the same as anybody else, and this is considerably more generous that the savagely means-tested maintenance grants and loans currently on offer.
- Every student should have the possibility of living in low-cost student accommodation for a capped rent of £50 per week (outside London; perhaps up to £80 a week for London where space is at a premium) if they do not want to or cannot sensibly stay at home. This would involve the construction of several thousand units (bed sits or studio flats) in purpose built blocks, the cost of which will be minimal and which would be recouped out of the future rental income anyway.
All of this leaves just a few loose ends...
- outstanding student loans of nominally £60 billion which in practice will be repaid at the rate of £1 or £2 billion a year via the 9% graduate tax surcharge. A core part of our manifesto is to get rid of stealth taxes on income (National Insurance, VAT and higher rate income tax) and restrict taxes on earnings to 20%. The 9% graduate tax is just another stealth tax and a particular burden on the under-thirties (all these stealth taxes on earnings wold be replaced with a tax on land values!). So we would simply write off the bulk of the nominal £60 billion accumulated debt on day one and make up the £1 or £2 billion shortfall in other ways.
- Overseas students. If UK universities can make a profit by charging international students £20,000 a year, why shouldn't they? We ought to welcome such students - just like any tourists they contribute to our invisible exports - and exclude them from immigration quotas.
- YPP have not said that we would cap domestic student numbers at 1 million or any other figure. We have said that we would abolish tuition fees/loans for the one million students studying something of obvious and immediate benefit to society as a whole.
If other people wish to study subjects for purely personal advancement or personal enjoyment, with no obvious net benefit to the taxpayer or society as a whole (law, drama, fine art, ancient history, most post-graduates degrees), then it is up to universities themselves to decide which subjects to offer and what fees to charge and how these will be settled. If such subjects are studied part-time, then the annual costs will be easily affordable by somebody in full time work.