University places restriction lifted and funded by student loans sell-off

The Guardian is reporting that English universities will be able to take as many students as they want from 2015, after the chancellor said the limit on places would be abolished …

Describing the restriction on places as a “cap on aspiration”, George Osborne said the 60,000 students who achieved the necessary grades each year but missed out on a degree place would now be able to go to university. The Treasury calculates that the system will need £700m a year – and funds will be raised by selling off the student loan book.

However, critics questioned how sustainable this form of funding would be. The Russell Group, representing the UK’s top 24 universities, said “quality higher education should be prioritised over quantity, especially in times of limited funding”, adding that “only time will tell if [the loan book] sale will fully meet the costs of this expansion”.

These sentiments have previously been used by the business secretary, Vince Cable, nominally in charge of university policy, who has argued that the marginal benefits of sending more people to higher education will be less than the average benefits. Last month, the education spokesman, David Willetts, publicly disagreed with his boss, saying”everyone able to go to university should have a place”.

Cable’s department said the cabinet minister had “fully accepted” the announcement, pointing out in 2014 the number of university places would increase by 30,000, with £50m a year to fund science and engineering students – “to ensure that institutions provide places in the subjects most needed in the economy”…

While Osborne claimed “access to higher education is a basic tenet of economic success in the global race”, his detractors countered that the system would collapse under the weight of its own ambition. Andrew McGettigan, analyst and author of The Great University Gamble, said the government’s analysis that the student loan book was worth £12bn was “very optimistic”.

“Because students don’t earn enough to pay loans back, the actual value of the asset is much less than predicted. In fact, the best performing student loans date from the early 2000s [and] are only worth two-thirds of face value. So you need to sell about £20bn of student loans to get £12bn. In recent years, the loan book raises much less money.”…

More at:  University places restriction lifted and funded by student loans sell-off

Is this a good move to enable all who achieve the required the grades the chance to go to university or is an unjustifiable additional cost? Please give us your reactions in the comments or on twitter… 

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