28 July 2014
PA Consulting Group’s Mike Boxall, a higher education expert, is interviewed on BBC Newsnight, the UK’s pre-eminent political news programme. Mike talks about the issue of student loans and who should be responsible for repayments – government or universities. Currently, the majority of student loans are never repaid.
Under the present system, the government lends students the money to pay their tuition fees, which they then repay when their income reaches a set amount. While government and the taxpayer currently take on the risk for the loan not being repaid, ministers have been working on a policy that could transfer some of the risk to universities. A change could reshape the whole of the English university system, according to Newsnight.
Commenting on the potential change within the sector, Mike says: “Undoubtedly, universities have got by far the best deal in the current system. They are getting a higher amount of money per student than they used to and they are receiving that money for every student they recruit – with no risk or responsibility for repaying it. The risk of students not being able to repay their loan is currently on government and the tax payer.”
According to Newsnight, under the alternative system, students would repay their student loan debt to their university, rather than to the government. Consequently, universities would make money if their graduates earn more than expected and lose money if they earn less.
Commenting on what this change might mean for universities and students, Mike says: “The most important change is that it would make student earnings, after students graduate, the single most important driver of behaviours across the whole system.
“It could mean that there would be less incentive for universities to offer courses that don’t lead to high earnings. Courses in the humanities, in social services, in education and nursing, for example, would become a bad deal for universities to be offering.”
David Willets MP, former Minister of State for Universities, is also interviewed as part of the news item.