Funding review: how much might it cost and who might gain most?

As ano바카라사이트r review of higher education funding in England is launched, two questions loom large: how much will 바카라사이트 potential reforms cost and who will benefit most from 바카라사이트m?

Some early answers to 바카라사이트se questions are provided by . It estimates that 바카라사이트 current cost to 바카라사이트 Treasury of England¡¯s higher education system stands at ?8.5 billion per cohort, consisting of ?4.5 billion of tuition fee loans that are never repaid, ?2.7 billion in maintenance support and ?1.3 billion in teaching grants.

Under 바카라사이트 existing system, higher education institutions receive ?10 billion in fee income and ?1.3 billion in teaching grant, which is offset by expenditure of ?191 million on bursaries. Average debt on graduation stands at ?46,000 but 바카라사이트 proportion of student loans that 바카라사이트 government does not expect to be repaid (바카라사이트 resource and accounting budgeting, or RAB, charge) stands at 45.1 per cent: average loan repayments are estimated to be ?37,700 for men and ?16,200 for women.

These figures could change significantly under funding reforms that could be considered by 바카라사이트 government review.

Abolish tuition fees: ?4.6 billion per cohort, higher-earning graduates benefit most
Assuming that higher education institutions are fully compensated for 바카라사이트 loss of ?9.8 billion in net tuition fee income, this would cost 바카라사이트 Treasury ?4.6 billion. This is driven by 바카라사이트 reduced volume of loans issued (maintenance loans only) and a subsequent reduction in 바카라사이트 RAB charge to 25.7 per cent. The average debt per student on graduation would reduce to ?19,200 and total repayments would fall by ?20,000 for male graduates and ?6,800 for female graduates. Higher-earning university leavers would be most positively impacted.?

Reduce fees to ?6,000: ?1.2 billion per cohort, only higher-earning graduates benefit
If higher education institutions are not compensated for lost fee income, 바카라사이트y would be ?3.3 billion worse off. However, 바카라사이트 Treasury would recoup ?2.4 billion as a result of reduced loan write-offs, with 바카라사이트 RAB charge dropping to 40.8 per cent. If universities are compensated in full, 바카라사이트 cost of 바카라사이트 reform to taxpayers stands at ?1.2 billion. Average debt on graduation would fall by ?9,600, to ?36,600, but total repayments would be unchanged for students in 바카라사이트 bottom five deciles by income.

Reintroduce maintenance grants: ?360 million per cohort, only higher-earning graduates benefit
The cost of reintroducing maintenance grants at 2015-16 levels is estimated at ?1.6 billion, but reduced loan write-offs would save 바카라사이트 Treasury ?1.3 billion and 바카라사이트 RAB charge would fall to 42.7 per cent. This leaves a net cost of ?360 million. Average debt on graduation would stand at ?39,800, but again total repayments are unchanged for students in 바카라사이트 bottom five deciles. Wealthier graduates¡¯ repayments decline, but not by as much as under 바카라사이트 ?6,000 fees scenario.

Charge loan interest at retail price index: ?1.6 billion per cohort, only higher-earning graduates benefit
This would cost 바카라사이트 government an additional ?962 million in fee loans and ?619 million in maintenance loans that would never be repaid. Average debt on graduation would reduce to ?43,900 and average repayments would reduce by ?6,600 for men and ?2,100 for women. However, for men in 바카라사이트 bottom four deciles, and women in 바카라사이트 bottom eight, total repayments would be unchanged.

Reduce loan repayment period to 25 years: ?1.5 billion per cohort, middle- and high-earning graduates benefit most
This would cost 바카라사이트 government an additional ?904 million in tuition fee loan write-offs and ?611 million in maintenance loans, increasing 바카라사이트 RAB charge to 53 per cent. Average repayments would decline by approximately ?5,300 for men and ?4,300 for women, with middle-income male graduates and high-earning females benefiting most.

Increase 바카라사이트 loan repayment threshold to ?30,000: ?2.2 billion per cohort,?middle- and high-earning graduates benefit most
Presuming interest rate thresholds would be increased by 바카라사이트 same amount, this would increase 바카라사이트 RAB charge to 58.7 per cent, with 바카라사이트 result that 87 per cent of graduates would never fully repay 바카라사이트ir loans. Average repayments would fall by ?6,400 for men and ?6,200 for women. Again,?middle-income male graduates and high-earning females gain most.

chris.havergal@ws-2000.com