On Not Bleating

I'd not noticed this till someone pointed it out to me in conversation yesterday, but apparently the Government's proposals for changes to the funding of higher education are now substantially worse than those made by Browne. Rather than make apocalyptic claims about the effects of a system of university funding where which courses students pick to pay for decides how much money universities get for teaching them, apparently in ignorance of the fact that we currently have such a system, opponents of the Government's propsoals might like to point out that fewer students are going to eligible for grants, fewer students are going to be eligible for subsidised loans, and that those loans are going to be less subsidised and take longer to pay back (BBC News; HEFCE presentation (pdf)). Basically, the financial burden students are going to take up by going to university is going to increase for all but the very poorest. That is an affront to equality of opportunity. Students should not have to live like paupers in order to be able to go to university, which is the fate which will await all but the wealthy. There's also good evidence it'll put people off, which is of course also a failure in terms of equality of opportunity.

According to my informant, although I can't find direct evidence of it anywhere, part of the government proposal includes re-rating the level at which loans start to be repaid only every five years and on the basis of 2% fall in the real value of money. Both RPI and CPI are currently above 3%. This means that the headline rise in the threshold at which graduates start repaying their loan is illusory, since it'll be eroded over time and anyway fail to keep piece with growth in incomes for four years out of five. For example, at 3% inflation, £21,000 in today's money will have lost nearly 15% of its value in five years and be worth a little over £18,000. Even when re-rated, over five years a difference of 1% between the actual inflation rate and that assumed produces a real fall in the threshold of over a thousand pounds. Add to this that people will be paying for longer at real rates of interest, and you wouldn't want to be poor or to have taken up much of the government's offer of means-tested, subsidized support.