MPs debate fee refunds, IfS says only the rich would benefit

On Monday evening MPs debated parliamentary petitions relating to university tuition fees - an event held in response to five petitions that have received just short of a million signatures between them.

Jim is an Associate Editor at Wonkhe

Whoever you are, watching the issues facing “your” sector get debated in Parliament can be a dispiriting process if attendance is poor. The chances of a packed room for a Westminster Hall debate at 6.00pm on a Monday night during a national lockdown were always low – and who knows whether eleven MPs (including the Chair) is better than this sort of thing would usually get or is befitting of a million signatures.

Chris Evans, (Labour Co-op Islwyn) kicked the thing off with a round up of the issues in the various petitions’ wording, quoting from follow up research commissioned by the committee:

“Students feel greatly mistreated by the Government: blamed for the rise in Covid cases, locked in accommodation in new cities with no support network, and not receiving the teaching they have paid for. The Government’s lack of engagement with these issues is severely damaging.

He ended on the student suicides that have been reported throughout the term. Every life lost is a tragedy, but ONS tells us that 182 full-time students died by suicide in 2018 in England and Wales – context perhaps sensibly not traded around around in rebuttal.

Esther McVey (Conservative, Tatton) has emerged as an unlikely student consumer champion during the pandemic, reminding us that an episode of her “Blue Collar Conversations” podcast had focussed on the issues back in May. She’d been speaking to students and found that what we might call complaints confidence was low:

They were only in their first or second year and they thought they might not get the grade that they should, so they felt that they did not want to upset the apple cart and would not pursue that route.

Former NUS officer Bell Ribeiro-Addy (Labour, Streatham) supported free education, but argued that if students were paying for it then they should get refunds – if not the government was trying to have it both ways. Claudia Webbe (Leicester East) and Kim Johnson (Labour Liverpool, Riverside) took up the UCU position on safety. And Rachael Maskell (Labour Co-op York Central) lamented that the marketised system meant students were having to request refunds and discounts rather than working as partners.

Labour’s Shadow Universities Minister Emma Hardy delivered an impassioned speech covering almost every base you might imagine – and even painstakingly read out every time the government has used its £256m magic money twig to say it is supporting students and universities, highlighting in the process the extent to which DfE seems to have delivered its Covid response in the sector on the cheap:

Time and time again, the Government have spurned opportunities to do the right thing and provide concrete help for students. A cohort of young people are looking ​for emotional and material support, and they have so far found themselves abandoned by this Administration, who shamelessly repeat “£256 million” in response to every single question asked of them about students.

Michelle Donelan didn’t seem too phased – and largely delivered the lines we’ve come to know and love over the months. For example, where students who feel the quality of their education has declined, the minister’s message remains that there is a system in place which can help – despite the fact that students can’t really complain about quality. And university staff might be relieved or appalled to learn that their efforts in converting teaching activity to online were explained, lauded and championed at least in part to explain why student compensation wouldn’t be necessary:

Universities have invested heavily in innovative and dynamic learning and have utilised technology. I have seen many examples of interactive lessons that staff have worked tirelessly, hour after hour, to produce. In fact, a recent survey by Unite showed that 81% of students were happy that they did not defer, and four in five agreed that, although it is not how they expected their first university year to be, they valued their time there.

Interestingly, Donelan did say that a new page is “now on the [OfS] website which pulls together existing guidance on consumer issues” – something which we knew was coming but OfS told us last Thursday was work on which we would get an update “soon”. And the £256m was defended again – although it’s probably reached the point now where an OfS none too keen to pick a fight with DfE really needs to issue some clarity on what student premium funding can and can’t be used for, given that the digital divide is still there and student hardship is starting to intensify.

Meanwhile to coincide with the debate, the Institute for Fiscal Studies (IfS) published an “observation” questioning who would benefit from reimbursing tuition fees. It notes that reimbursement would primarily benefit the small minority of students who pay their tuition fees out-of-pocket, and those who go on to have high earnings after they have graduated.

Only the roughly 10% of students (or their parents) who pay tuition fees directly would receive any immediate pay out. Others will have taken out the full government-backed loan to cover their fees, so reimbursement would merely lower their student loan balance – and the change to the balance only matters for high-earning graduates, because balances are written off 30 years after graduates start repaying.

As such, it’s a version of the argument that Martin “Money Saving Expert” Lewis has been making – but misses several points. It notes that the same logic doesn’t apply to potential reimbursements of postgraduates, skates over the 10% that pay upfront and ignores international students altogether. It also assumes that the current terms will remain fixed, when many analysts assume that the cost of the system will mean that things like responses to the Augar review will probably change the terms for the worst.

This isn’t some technical fantasy. On ConservativeHome last week, HEPI’s Nick Hillman argued that there were really three options for funding higher education from here – less support for students, fewer of them, or else they (ie graduates) pay more. In it he notes that in a “wasteful and opportunistic” announcement at the 2017 Conservative Party Conference, Theresa May relaxed the already loose student loan repayment terms by increasing the repayment threshold to £25,000 (up from £21,000), and ensured that a significantly lower proportion of public money lent to students would be repaid. “Tougher student loan repayment terms” in the future were suggested as the solution.

That’s one way of thinking about it. Another would be that what May did was relieve some of the burden of graduate repayments which can be pretty stinging on people in their twenties – by in her words “putting money back into the pockets of graduates with high levels of debt”. Telling graduates in their twenties to pay (back) more for this year’s higher education isn’t exactly going to endear this generation to the Conservatives. Maybe the fairest way to compensate the Classes of 2020 and 2021 would instead be to raise the repayment threshold even further.

One response to “MPs debate fee refunds, IfS says only the rich would benefit

  1. “Maybe the fairest way to compensate the Classes of 2020 and 2021 would instead be to raise the repayment threshold even further.”

    We need a sustainable system that doesn’t require modifications every few years. Raising the repayment threshold would also have to include all cohorts since 2012 so would wastefully also compensate them when their higher education was unaffected by Covid.

    David Willetts:

    “Too expensive? The taxpayer is currently having to pick up too much of the bill for undergraduate education of home students — more than 50 per cent of the value of the loans may have to be written off. But that is, above all, because of the terrible mistake by Theresa May’s government of increasing the repayment threshold to an absurdly high £25,000. One part of a deal to help universities through the crisis could be to reduce the threshold gradually. This could be the start of a long and painful process of paying for this crisis. The interest rate on the outstanding debt could be cut to offset the change and make the deal politically attractive.”

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