The increase in tuition fees poses several potential issues. The obvious concern for many students is the large amount of debt with which they will be burdened after education. To tackle the higher debts from raising the fees, the government is implementing a new current student loan scheme whereby students will repay the 9% of their annual salary when they earn over £21,000, rather than the previous £15,000. However, this measure to facilitate the repayment of higher loans is not enough to help the students manage their huge overall debts that are likely to average around £53,000. In the bigger picture, with higher debts come higher interest payments, which reduce the dispensable income of the post-graduates. This of course will slow down Britain’s economy, as its overall demand will have shrunk.
Another likely issue that the new tuition fees present is the deepening of social immobility within society. For a country that prides itself in allowing those from the bottom rung of the economic ladder to reach the top, a raise in fees would create a block to the obvious way of getting out of low paid jobs.
Although undergraduates will not have to pay a penny during the course, in economic conditions where the unemployment rate is steadily increasing (2.62 million currently) and the job market is contracting, it is not taken for granted that universities will secure a profession straight away. Consequently, potential students from poorer backgrounds will be less likely to attend university lest they are not able to handle the student debt after their degree.
Despite the immediate negative implications, we must not ignore the long-term motives behind the implementation of the rise in fees. Britain reached a trade deficit of 10.3% of GDP in 2010 which ranked them 163 in the world between Nepal and Greece, and indicated huge over spending. In the long run, the UK needs to maintain itself as a competitive economy in the world market, and cannot do so sustainably if it were to carry its huge debt. Doing so could result in Britain being in a position similar to Greece, on the verge of default, so it is without saying that it is imperative that the debt be paid off.
Nevertheless, it is worth questioning whether the government is ignoring an even more efficient alternative to tackle the higher education system. The Conservatives are adamant in raising the tuition fees in order to deal with Britain’s debt. However, an alternative could depend on the transformation of thousands of the skill based degrees to more industrial based diplomacies. This could be beneficial in many ways. Apprenticeships are less costly for the state to run than degrees, therefore the government would save money which could be used to pay off its debt. The vocational nature of the apprenticeships would be likely to increase the employability of each student far more than certain academic degrees. This concept is very similar to the current German higher education system where specialised vocational schools known as Berufsschule are available as a viable alternative to university. Students work in their desired industry for 2-3 years on a part time salary and at the end of the course they are ready for a career up to a low management post. The scheme has successfully diversified Germany’s economy; the same method could too diversify Britain’s economy from one specialized in services to an industrial-based economy as well.
The compromise between spending cuts and making higher education available to everyone is a difficult one to formulate. Yes, the tough austerity measure to raise the tuition fees is likely to remove a large burden off the government, and in the long term this will maintain Britain’s economic competitiveness. However, it is certainly not the best way to bring about a reduction in Britain’s debt. Via this method, a whole generation will suffer from great financial difficulties and it is arguable that the economic effects of this could counteract the government’s long term plans to amend the economy.
Contributed by Kapil Vijh