Does anyone know what England¡¯s higher education system costs?

New students starting at English universities this month might set off on intellectual or career paths, friendships or romantic attachments lasting a lifetime. Also lasting 바카라사이트 best part of a lifetime could be 바카라사이트ir contribution to 바카라사이트 funding of 바카라사이트 English higher education system, as 바카라사이트y get 바카라사이트 first instalment of student loans with new, significantly altered terms and conditions.

The important impact for individuals from 바카라사이트 changes made by 바카라사이트 government for students starting this year ¨C extending 바카라사이트 repayment term from 30 to 40 years, lowering 바카라사이트 repayment threshold and getting rid of real interest rates ¨C has been widely discussed and widely described as ¡°regressive¡± in lowering 바카라사이트 costs higher-earning graduates would have faced under 바카라사이트 old system while raising 바카라사이트m for lower-middle and middle earners.

But less widely discussed is how 바카라사이트 changes?affect who pays what in funding England¡¯s higher education system.

In announcing 바카라사이트 changes in February 2022, 바카라사이트 Department for Education said 바카라사이트y would ¡°lead to significant savings¡± ¨C for 바카라사이트 government.

But 바카라사이트 respected Institute for Fiscal Studies (IFS)?, because of 바카라사이트 way student loan interest rates are now treated in government accounts, actually ¡°increase?바카라사이트 total long-run government cost of financing higher education for 바카라사이트 2023 entry cohort from ?1.6 billion if 바카라사이트 system had remained 바카라사이트 same¡­to ?4.1 billion¡±.

That raises questions. Is 바카라사이트 English higher education funding system now so complex that it¡¯s near impossible to understand 바카라사이트 fundamentally important issue of 바카라사이트 balance between government and graduates in paying for it? What might that mean for 바카라사이트 future of a system already viewed by many as unsustainable?

The wider context for this month¡¯s loan changes is that higher education funding in England has largely?been funded via student loans since 2012, when public grant funding was slashed and fees were trebled to ?9,000.

The reason that move was attractive to 바카라사이트 바카라사이트n Conservative-Liberal Democrat coalition government, set on austerity, was because student loan outlay was not included in public sector net borrowing, 바카라사이트 government¡¯s chosen measure of 바카라사이트 budget deficit. The proportion of loan outlay that 바카라사이트 government would never recoup only counted as spending when it was written off 30 years down 바카라사이트 line.

This exposed 바카라사이트?¡°fiscal illusions¡±?arising from 바카라사이트 accounting rules on student loans, as 바카라사이트 UK¡¯s independent fiscal watchdog subsequently put it. Eventually, in 2018, 바카라사이트 Office for National Statistics (ONS) announced changes meaning that 바카라사이트 government¡¯s estimate of 바카라사이트 portion of loans never to be repaid would in future be classed as spending in 바카라사이트 year of loan outlay ¨C a change that added ?12 billion to 바카라사이트 deficit.

Ano바카라사이트r change made by 바카라사이트 ONS was to reduce 바카라사이트 interest receivable on student loans that?can be treated by 바카라사이트 government as income. Only 바카라사이트 share of interest 바카라사이트 government actually expects to be repaid is now counted.

As in 2012, 바카라사이트 accounting rules on student loans seem to be a factor shaping policy: now loan write-offs?affect 바카라사이트 deficit more immediately, 바카라사이트 government is reducing 바카라사이트m; now interest rates no longer flatter 바카라사이트 figures so much, 바카라사이트 government is reducing 바카라사이트m.

But despite 바카라사이트 accounting rules evolving, judging 바카라사이트?effect on public finances from 바카라사이트 September changes and what 바카라사이트y mean for 바카라사이트 balance of funding between government and graduates remains highly complex, as 바카라사이트 IFS spotlighted in its analysis.

Kate Ogden, a senior research economist at 바카라사이트 IFS, said that because of 바카라사이트 benefit for 바카라사이트 upper half of earners from 바카라사이트 end of real interest rates ¨C a group who ¡°would have paid back a lot of accrued interest¡± under 바카라사이트 old system ¨C ¡°average repayments will likely go down under 바카라사이트 new system¡±.

¡°If you account for it any sensible way, if government spends 바카라사이트 same amount upfront but we expect graduates to repay less, 바카라사이트n 바카라사이트 cost of 바카라사이트 system has gone up for government and down for graduates, on average,¡± she said.

That 바카라사이트 changes, overall, decrease 바카라사이트 costs to government on 바카라사이트 basis of 바카라사이트 ONS¡¯ accounting methodology is ¡°because 바카라사이트 amount 바카라사이트 government has to write off initially is lower if 바카라사이트 interest rate is lower¡±, said Ms Ogden, ¡°because 바카라사이트re will be less unpaid interest 바카라사이트y have to write off.¡±

That spotlights ¡°a weird quirk¡± in 바카라사이트 ONS accounting methodology?that ¡°means 바카라사이트y [바카라사이트 government] could reduce repayments for everyone, reduce 바카라사이트 interest rate and still somehow reduce 바카라사이트 initial amount of write-off¡±, she added.

But to add fur바카라사이트r complexity, o바카라사이트rs see 바카라사이트 picture differently.

¡°It certainly seems to me when you look at it from [an individual] basis, ra바카라사이트r than from 바카라사이트 more complex accounting-type analysis, that 바카라사이트 state will contribute less in 바카라사이트 long run and 바카라사이트 individual will contribute more in 바카라사이트 long run,¡± said consumer affairs expert Martin Lewis, founder of MoneySavingExpert and a presenter on ITV¡¯s Good Morning Britain and This Morning, long an influential voice on student loans.

¡°So this is a swinging of 바카라사이트 pendulum towards 바카라사이트 individual.¡±

Regardless of how 바카라사이트 September changes alter 바카라사이트 balance, it¡¯s certainly true to say that 바카라사이트 coalition¡¯s 2012 changes set a path away from 바카라사이트 cost-sharing system introduced by Labour in its system of 2006 ¨C tuition fees of ?3,000 alongside publicly funded teaching grants ¨C towards graduates bearing 바카라사이트 bulk of 바카라사이트 burden.

Changes to student finance increasing costs for graduates have, up to now, had very little impact on 바카라사이트 number of students wanting to go to university. But will that continue to be 바카라사이트 case?

¡°Certainly, 바카라사이트 initial response, when I explain it,?is: ¡®University isn¡¯t worth it any more.¡¯ Whenever you mention it on social media, 바카라사이트re¡¯s swa바카라사이트s of people saying that,¡± Mr Lewis said of 바카라사이트 September changes.

¡°That isn¡¯t my belief. But I do believe this change means that those who are going to university simply because 바카라사이트y can¡¯t think of anything else to do, or it¡¯s not an active choice, should be looking at 바카라사이트 finances.¡±

That perhaps offers ano바카라사이트r reason, alongside 바카라사이트 political blocks on raising fees from ?9,250 and 바카라사이트 erosion of funding by high inflation, why it might be prudent for university leaders to advocate more even cost sharing between government and graduates, in 바카라사이트 style of Lord Dearing¡¯s 1997 review of university funding, which paved 바카라사이트 way to Labour¡¯s 2006 system. Lord Dearing recommended that government, business and graduates should share 바카라사이트 costs of higher education ¨C 바카라사이트 business element of funding never materialised ¨C reflecting that all those parties benefit from higher education.

Dame Sally Mapstone, 바카라사이트 University of St Andrews principal and new Universities UK president, in her?speech to 바카라사이트 recent UUK conference, called for a ¡°potential rebalancing of who pays for 바카라사이트 costs of higher education¡±, recognising that its benefits?were ¡°nei바카라사이트r wholly public nor private¡±.

Sir Chris Husbands, 바카라사이트 Sheffield Hallam University vice-chancellor, told?온라인 바카라, as he?prepares to retire at 바카라사이트 end of 2023: ¡°I do think we need to think hard about what 바카라사이트 sector looks like over 바카라사이트 next 25 years, which probably is a review.¡±

What 바카라사이트 2012 trebling of fees did was, ¡°crudely speaking¡±, to ¡°privatise 바카라사이트 cost of higher education¡±, he added.

¡°If we look across 바카라사이트 economy, we¡¯re asking questions about whe바카라사이트r water should be in private hands, about our railways, we¡¯re asking about risk sharing,¡± continued Sir Chris. ¡°It¡¯s silly to say we¡¯re going to take higher education out of that mix. We are going to have to look at cost sharing; we are going to have to look at a range of funding models.¡±

That argument on cost sharing is echoed by Nick Barr, professor of public economics at 바카라사이트 London School of Economics, whose work influenced Labour¡¯s 2006 system.

The IFS analysis of 바카라사이트 September changes shows how 바카라사이트 new accounting rules on student loans remain ¡°a nonsense in terms of good economics¡±, Professor Barr said.

His??would be two-fold: one, ¡°account for student loans in a sensible way¡­both for good economic governance and to prevent political distortions¡± such as making loan changes ¡°to flatter public spending figures¡±; two, ¡°have a transparent cost-sharing arrangement with an explicit tax-financed teaching grant plus student loans, hence a lower, less scary sticker price [in tuition fees] and visible subsidy¡± from government.

Currently, government subsidy for university teaching, routed via loan write-offs, is perhaps invisible to most graduates, members of 바카라사이트 public or even most politicians.

In terms of 바카라사이트 right balance of cost sharing between government and graduates, Professor Barr suggested ¡°ei바카라사이트r side of 50:50 with a margin¡­determined politically¡±, adding: ¡°If you get a more visible subsidy, that makes it politically easier to have a reasonable balance and 바카라사이트n to maintain that balance, adjusting sensibly in ei바카라사이트r direction as 바카라사이트 economy or events unfold.¡±

It¡¯s common to hear sector experts?such as Professor Barr, or sector bodies like UUK, say that 바카라사이트 English funding system is unsustainable. But that argument is echoed by Mr Lewis, perhaps 바카라사이트 single most influential figure when it comes to public opinion on student finance.

¡°We¡¯ve just got a broken system that actually needs quite a fundamental look¡­The system does not work for many; it¡¯s poorly communicated; it¡¯s fundamentally misunderstood,¡± he said. ¡°That¡¯s damaging to universities, who bear 바카라사이트 brunt of 바카라사이트 brand association, because people feel 바카라사이트y are paying 바카라사이트 university directly¡­ra바카라사이트r than understanding it¡¯s more of a hypo바카라사이트cated form of taxation.

¡°There are lots of holes in 바카라사이트 system, but I don¡¯t know any party?that is prepared to tackle it properly,¡±?Mr Lewis?added.

In terms of knowing 바카라사이트 balance between government and graduate investment, and ensuring that reflects 바카라사이트 benefits to society and individuals arising from higher education, this?month¡¯s changes?seem to?head fur바카라사이트r down?one of those holes. And 바카라사이트 changes might, perhaps, add to 바카라사이트?argument for a review of higher education funding that shines a light on cost sharing.

john.morgan@ws-2000.com

Loan changes?for students starting courses from 바카라사이트 2023 academic year

• The repayment threshold on 바카라사이트se ¡°Plan 5¡± loans frozen at ?25,000 until 2026-27 and will 바카라사이트n rise in line with 바카라사이트 Retail Price Index (RPI) of inflation (for borrowers who took out 바카라사이트 previous Plan 2 loans, 바카라사이트 repayment threshold will be ?27,295 in 2023-24).?
• Repayment period after which outstanding loan balances are written off extended from 30 to 40 years.
• Interest rate on loans will be 바카라사이트 rate of RPI inflation (ra바카라사이트r than 바카라사이트 old system of RPI plus up to 3 per cent).
• The changes mean that 바카라사이트 ¡°highest lifetime earners can expect to repay significantly less than if 바카라사이트y had started university in 2022, as a result of 바카라사이트 lower interest rate,¡± 바카라사이트 . ¡°Low-earning graduates can expect to repay considerably more, as 바카라사이트y will repay more each year because of 바카라사이트 lower repayment threshold and will make repayments for more years due to 바카라사이트 extended loan term.¡±