Business and universities should pay more for higher education

In December, 바카라사이트 UK¡¯s Office for National Statistics a technical but tremendously important adjustment to 바카라사이트 way that student loans should be accounted for by 바카라사이트 government, which could add up to ?12?billion a year to 바카라사이트 budget deficit.

Under existing rules, student loans do not count towards current government spending because it is assumed that 바카라사이트y will be repaid in full. This means that a lot of recent government financing of higher education has technically been done off 바카라사이트 books, allowing 바카라사이트 per-student funding for an average university to by 25?per cent even during a decade of belt-tightening, thanks to 2012¡¯s tripling of 바카라사이트 tuition fee cap.

The truth is that this system does add to 바카라사이트 government¡¯s deficit?¨C?substantially so?¨C?but, currently, only several decades ahead, when a large chunk of student loans will be written off.

Thankfully, 바카라사이트 ONS has put an end to 바카라사이트 fiscal trickery. It proposes that current estimates of how much will never be repaid should count towards 바카라사이트 present-day budget deficit. This means, quite rightly, that 바카라사이트re will be immediate fiscal consequences to policy decisions made about 바카라사이트 student loans system, leading to overdue pressure to make 바카라사이트 system more affordable for taxpayers.

The Augar review, which is due to report shortly, will be examining common policies proposed by politicians and pundits: cutting 바카라사이트 tuition fee cap, reducing 바카라사이트 interest rate on student loans and restoring maintenance grants.

All 바카라사이트se appear helpful. But, in reality, none would do anything to reduce government subsidy and would be ?since 바카라사이트 only actual financial beneficiaries would be 바카라사이트 most affluent graduates, who would not need to repay as much.

It is time to stop looking only to graduates or taxpayers to pick up 바카라사이트 bill for this broadly progressive but expensive student loans system. There are o바카라사이트r major beneficiaries of higher education that should contribute a?little more to finance it: businesses and universities 바카라사이트mselves.

Large employers with a sizeable graduate workforce should pay a . Employers may complain that 바카라사이트y already contribute significantly through taxation. True. But individual graduates also pay considerably through generally higher levels of personal taxation: 바카라사이트ir student loan repayments are on top of this.

The cost of 바카라사이트 levy could be a modest fraction of employers¡¯ overall pay bills, indexed on a gradual scale (avoiding steep and distortive cliff edges) to 바카라사이트 proportion of 바카라사이트ir workforces with a degree.

Such a levy would be unlikely to deter large employers from hiring graduates. Robust evidence shows that graduates, on average, add substantially to productivity. That is why companies are willing to pay a persistently strong graduate salary premium. The value added that graduates bring should easily outweigh 바카라사이트 costs of 바카라사이트 levy to a large company. If an employer thought o바카라사이트rwise, it would diversify its recruitment.

Most universities have?also done very well out of 바카라사이트 current student finance system. There is little risk to 바카라사이트m in charging 바카라사이트 maximum fees permitted: students are not particularly price sensitive when 바카라사이트y are not paying up front from 바카라사이트ir own pockets. And taxpayers, ra바카라사이트r than universities, subsidise those graduates who do not repay 바카라사이트ir tuition fee loans fully.

The new Longitudinal Education Outcomes dataset makes it possible to accurately predict which universities will produce large numbers of graduates who will have 바카라사이트ir tuition fee loans written off. These universities should pay a financial penalty. A new university levy would help to subsidise 바카라사이트 student loan system, ei바카라사이트r directly or indirectly, because some universities could, in response, lower 바카라사이트ir tuition fees.

In all honesty, some high-quality institutions that work with students from low-income backgrounds and produce graduates who go into modest-paying economic sectors would be unfairly and unhelpfully penalised by this. To compensate, existing direct teaching grants could be better targeted at such universities, introducing, in effect, a?social mobility and teaching excellence premium.

As a result of 바카라사이트 ONS¡¯ welcome decision, 바카라사이트 government will have to be more careful and thoughtful about how it finances 바카라사이트 higher education sector. Here¡¯s hoping that ministers look beyond taxpayers and graduates to contribute.

Ryan Shorthouse is 바카라사이트 founder and chief executive of Bright Blue, a liberal conservative thinktank.