The government should build universities in places like Blackpool to help regenerate local economies and boost funding for higher education by forcing graduates to repay loans faster, according to the minister who created the current funding system students in England.
David Willetts, the former universities minister who oversaw the switch to Â£ 9,000 in student loans for tuition in 2012, said taxpayers were paying too much of the bill for unpaid loans.
Its solution is for the government to lower the starting threshold for student loan repayment to income of Â£ 21,000, from the current rate of 27,295. This would save the government nearly Â£ 3 billion per year. year, but English graduates would see their tuition and maintenance reimbursements more than triple.
According to Lord Willetts’ proposals, a graduate earning Â£ 30,000 per year would see their repayments increase to Â£ 67 per month or Â£ 800 per year, from Â£ 20 per month or Â£ 243 per year now.
âIt is in the interest of students that universities are well funded. But it should not come at the expense of taxpayers. It is wrong that the forecast of loan cancellations has increased by 28% [in 2012] at 53% today, âsaid Willetts. Using the proposed lower threshold, 44% of loans would be written off by the government.
It was reported that ministers are planning to lower the income threshold for reimbursements as part of the upcoming comprehensive spending review, and reductions in tuition fees and limits for some courses are also being considered.
The lowering of the threshold was among the measures recommended by the Augar Higher Education Review in 2019, which also suggested reducing tuition fees to Â£ 7,500 and extending loan repayments from 30 to 40 years.
Jo Grady, secretary general of the University and College Union, said that instead of putting more students into debt, the focus should be on âcorrectâ public funding. She said: ‘Lord Willetts, as the architect of the Â£ 9,000 tuition fee, cannot claim to be concerned about the high levels of student debt while simultaneously offering to pay off the debts of low-income graduates. .
âLowering the repayment threshold to Â£ 21,000, which is well below the average salary, will be a touchstone around the necks of young graduates and risk deterring students from getting the education they need. . It also fails to address the systemic problems with the university funding model that have led to widespread job insecurity and a precipitous decline in part-time and mature studies. “
Writing in an article for the Higher Education Policy Institute (Hepi), Willetts argued that demand for college degrees remains high and he called on the government to continue to develop the higher education sector to encourage economic growth. .
âHigher education has fallen out of favor. But it increases the incomes, well-being and prospects of the people and areas left behind, âsaid Willetts. âConservatives are increasingly concerned that graduates are leftist, but the party’s problem concerns young people more broadly. The best way to tackle this problem is to help them realize their aspirations of owning their own home, finding decent work and – yes – going to college. “
Willetts argued that instead of trying to reduce the number of young people leaving school in higher education, the government should continue to encourage the emergence of campuses across England.
âMany cities that don’t have one see obtaining a higher education institution as one of the best ways to improve their prospects. They attract young people to one area instead of losing them while they go to university elsewhere, âhe said. âThe Blackpool council is supposed to have turned down a new university decades ago, so it went to Lancaster instead – now is the time for Blackpool to rethink that decision. Other cities such as Wigan and Wakefield are candidates, âwrites Willetts.
Portsmouth is one of those cities that benefits enormously from its university, according to its Vice-Chancellor Professor Graham Galbraith. The university has a ten-year strategic partnership with the local hospital trust, it sponsors the football club, sets up a multi-academy trust, and plans to invest several hundred million dollars in its urban estate over the next few years. years.
âWe are typical of universities in their towns from top to bottom of the UK,â said Galbraith. âWe are the city’s fourth largest employer with a regional economic impact of Â£ 624 million per year, supporting nearly 9,500 jobs each year.
âThese numbers may seem abstract, but they translate into downtown stores, taxi drivers and businesses having better sales when students arrive early in the term than at Christmas. You can imagine how much of a boost this will be this year and the clear, long-term impact our university is having on our local community and economy. “
Also in Hepi’s article, Willetts included an unusual proposal: to allow universities to buy student loans for their own graduates, causing institutions to earn more and keep paying back.
âUniversities should be able, if they wish, to take a stake in the debt of their own graduates, so if the graduate earns more, the university gets more,â said Willetts. âThe program needs to be designed in such a way that universities are not incentivized to simply select the students who will earn the most. “
Willetts said such a program could allow universities to buy their own graduate debt at a below-market price, minus the college’s deregistration fees.
Responding to the document, a spokesperson for the Department of Education said: âThe student loan system is designed to ensure that all those with the talent and desire to pursue higher education can do so, while ensuring that the cost of higher education is equitably shared between graduates and the taxpayer.
“We are not commenting on speculation in the run-up to tax events.”