Means-tested fees offer a “third way” between systems with no fees but tightly-controlled student numbers (like Scotland) and systems with fees that are so high they could be squeezing out good students (as in England). The Guardian reports.
We know poorer families tend to be more debt-averse, and that graduates from poorer families typically earn less than those from richer families. Means-testing is also cost-effective to governments because it focuses help on those least likely to repay all their student debt.
This is why the policy is spreading like wildfire across five continents, in Canada, Chile, Italy, Japan and South Africa. On closer inspection, it’s clear that each country stumbled across it independently.
The UK has already experimented with means-tested fees. In 1998, Tony Blair and David Blunkett imposed a means-tested upfront tuition fee of £1,000, which students from poorer households were not expected to pay. It lasted less than a decade before higher fees for all students, backed by income-contingent loans, became the norm in England from 2006.
Student finance is a live political issue in Scotland too, where means-tested fees could be an option for improving university finances and increasing student places without imposing high fees on everyone.
The review by the Office for National Statistics may result in some of the student loan book – most likely, the part expected never to be repaid by graduates – appearing in government accounts as current public spending, rather than being deferred to the future. If that happens, it would remove some of the government’s logic for the existing high-fee systems in England and Wales. We may as well reduce the headline fee for some students and pay the cash direct to universities without pretending it is a repayable loan.
Please tell us your thoughts in comments or via Twitter ~ Tamsin
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