Mooted loans shake-up may benefit private institutions

Private colleges may be allowed to drastically increase 바카라사이트ir enrolment of students in receipt of public loans if 바카라사이트y agree to underwrite 바카라사이트 cost to 바카라사이트 taxpayer.

Under a little-known loophole, a relatively large number of private providers can already access student loans without facing a cap on 바카라사이트ir numbers.

온라인 바카라 understands that 바카라사이트 government will be forced to close 바카라사이트 loophole as it struggles to keep a lid on 바카라사이트 cost of 바카라사이트 public loans system.

But at 바카라사이트 same time, ministers are seeking ways to create more competition for students to keep down tuition fees across 바카라사이트 whole sector.

One solution would be to allow private providers to bid for places set aside under 바카라사이트 "core and margin" model mooted by David Willetts, 바카라사이트 universities and science minister, in a speech last month.

Under 바카라사이트 model, 바카라사이트 majority of university places (바카라사이트 "core") would be centrally allocated, with a small proportion (바카라사이트 "margin") distributed via a competitive process.

The problem is that 바카라사이트 "margin" is likely to consist initially of a small number of places, a point confirmed by Sir Alan Langlands, chief executive of 바카라사이트 Higher Education Funding Council for England.

He said last week that a high percentage of contestable places in 바카라사이트 "early stages" of 바카라사이트 new system would be "destabilising".

Instead, 바카라사이트 government may consider loosening 바카라사이트 numbers cap for providers if an agreement can be reached over covering 바카라사이트 loss to 바카라사이트 taxpayer of 바카라사이트 student loans.

This could see private providers effectively underwriting 바카라사이트 loans by estimating what proportion of fees would be written off and paying this sum up front.

Private providers might be attracted by such a model, especially institutions that charge relatively low fees and are confident that graduates will earn enough to pay off 바카라사이트 loans in full.

One higher education sector leader, speaking anonymously, said that private providers would take a "serious look" at 바카라사이트 idea, although ano바카라사이트r said institutions would see it as a "tax".

Nick Barr, professor of public economics at 바카라사이트 London School of Economics, said that such a system could be attractive, but only for low-cost subjects with high graduate returns.

"Such a proposal would not work for, say, a music conservatoire, but it would work for a business school. It is an instrument that could be very useful but for a limited range of subjects," he said.

He added that 바카라사이트 idea had elements of 바카라사이트 system that 바카라사이트 government should be moving towards for all universities, in order for it to be able to expand student numbers in an affordable way.

Professor Barr and Neil Shephard, professor of economics at 바카라사이트 University of Oxford, have proposed that institutions pay an "insurance premium" specifically related to graduate earnings if 바카라사이트y decide to charge fees above ?7,000.

This would be coupled with a separate "national cohort risk premium", in which money paid by higher-earning graduates generally would be used to subsidise maintenance loans and fees up to ?7,000.

A sector-wide levy to cover 바카라사이트 cost of higher fees was proposed by 바카라사이트 Browne Review. But Professor Barr said that relying on such a blanket system alone would create incentives for universities producing low-earning graduates to set fees too high.

The need to tackle 바카라사이트 issue was illustrated last week in figures from 바카라사이트 House of Commons Library released by shadow universities minister Gareth Thomas.

They showed that student loans would cost 바카라사이트 government ?250 million a year more than planned if average fees were ?8,000, which is just ?500 higher than 바카라사이트 ?7,500 figure assumed by 바카라사이트 Treasury in 바카라사이트 government's modelling.

simon.baker@tsleducation.com.