Photo by Fabian Society | Flickr
“The government has designed a system which is burdening students with debt today and set to weigh down the taxpayer with more debt tomorrow” – Ed Miliband.
Labour leader, Ed Miliband, has promised to cut university tuition fees by a third, from £9,000 to £6,000, if his party wins the General Elections on 7 May, thus confirming the pledge the party leader made already in the 2011 Labour party conference.
The cut in fees would come into effect in September 2016, meaning that those currently in their first year of university studies would have the fee of their final year capped to £6,000.
The plan also includes a £400 increase in student grants to cover living costs, which would take the full grant up to £3,800.
To fund the changes proposed, the plan suggests lowering the pension tax relief of those earning over £150,000 a year to the level of basic rate taxpayers. This, accompanied by a decrease in the sum that people can save in pensions tax-free, is said to reach the estimated £3.1 billion needed to cover the tuition fee cut.
The main concern of the party that the plan intends to tackle is the amount of debt the current system puts on the students and the government. According to the Labour Party plan, an average student currently graduates with a debt of £44,000. The government is currently increasing the national debt as it needs to write off student loans of nearly three quarters of students, who are not paying their loans back in full. Labour’s plan is intended to reduce the growing government debt estimate by £10 million over the next Parliament.
Graduates earning over £41,000 a year would have their student loan interest rates raised from 3% to 4%. Yet students would still need to earn £21,000 before they are required to pay back their loans and the loan is written off after 30 years from graduation.
University vice-chancellors have, however, rejected the plan, saying that lowering the tuition fee cap would generate a £10 billion gap in the university funding during the next five years.
President of Universities UK and the Vice-Chancellor of the University of Surrey, Professor Sir Christopher Snowden, responded that the cut in fees would cause harm “to the economy, to social mobility, to student choice, and to our universities.”
The National Union of Students (NUS) welcomed Labour’s plan, stating that the current funding system is ‘unsustainable’. Students interviewed on the matter by the BBC however, are sceptical and wary of a possible U-turn, similar to the Liberal Democrats after the 2010 elections.
