Monday, August 09, 2010

British university degrees to become a lifelong financial burden?

Middle-class professionals face being charged much more for their university degrees under plans for a new “graduate tax” system, according to research. GPs could pay some £70,500 to cover the cost of tuition fees while teachers are charged almost £50,000, it was claimed.

The findings came as David Willetts, the Universities Minister, insisted that graduates should make a “bigger contribution” towards higher education to keep universities strong during the economic downturn.

Speaking on Sunday, he appeared to endorse plans set out by Vince Cable, the Business Secretary, last month for student fees to be replaced with a levy based on earnings when graduates start working.

The Coalition claim this would end the current situation in which teachers, care workers and research scientists are expected to pay the same for their studies as top lawyers, surgeons and City analysts.

But the University and College Union warned that the changes risked escalating the cost of a degree for all students – and leaving millions of people in even more debt.

In a new report, the union, which represents lecturers, analysed a series of different financial models to test the consequences of a new-style tax on earnings. The UCU said a university-educated nurse on average wages would pay a total of £36,871 if the Government introduced a five per cent tax on graduates' total earnings over 25 years.

By contrast, under the current system, the same nurse graduating from an English university this year would be charged £10,300 to pay off the £9,440 tuition fee loan for their three-year degree. Even a three per cent rate of graduate tax over 25 years would work out significantly more expensive, at £22,123 for a nurse earning the average full-time salary of £29,497.

The conclusions come as the Government prepares to publish the findings of an independent review of student tuition fees in the autumn. The review – led by Lord Browne, the former head of BP – is widely expected to lead to a rise in the existing £3,225-a-year cost of a degree. Lord Browne has been asked to consider the graduate tax plan as part of his review.

Sally Hunt, union general secretary, said: "Parents and students will judge proposed changes to student finance on whether they make university more expensive or not.

"Whatever scheme is proposed to replace fees, the Government must ensure that studying for key professions remains attractive and that the prospect of prohibitive costs over a lifetime will not put off the next generation of innovators and public servants. "We urge Vince Cable to look again at the idea of taxing big business for the substantial benefit it gains from a plentiful supply of graduates, rather than merely looking to penalise students further."

But speaking on BBC1, Mr Willetts admitted the Coalition was looking at some “tough options”. This included forcing former students to make a “bigger contribution back towards the cost of the university education they have enjoyed”. “If you look at the overall position, we want to carry on providing finance for universities, but we think more of that finance should come from people after they have graduated, after they are in well paid jobs, and then making a contribution back,” he said.

Under a five per cent graduate tax on all earnings over 25 years, a secondary school teacher on average wages would pay £46,046, a social worker £37,550, a research scientist £46,418 and a doctor £70,526. According to UCU figures, if the rate was set at three per cent over 25 years, the same teacher would be charged £27,628, the social worker £22,530, the scientist £27,851 and the doctor £63,338.

Paying off a £9,440 tuition fee loan under the present system of funding for higher education costs the teacher £10,025, the social worker £10,272, the scientist £10,017 and the doctor £9,696.

The UCU said its research prompted fears that introducing a graduate tax could lead to shortages in teaching and social work, and would make "embarrassing reading" for Mr Cable. Mr Cable has admitted that some people were likely to end up paying more under a graduate tax system. But he said it was "unlikely" that those with degrees would have to make contributions for life.

He said: "It surely can't be right that a teacher or care worker or research scientist is expected to pay the same graduate contribution as a top commercial lawyer or surgeon or City analyst whose graduate premium is so much bigger."

But the UCU's conclusions have been criticised by the National Union of Students which has advocated a graduate tax system as an alternative to up-front fees. Aaron Porter, NUS president, said: "It would be quite wrong to make sensationalist and simplistic judgements before we have even seen the detail of Vince Cable's proposals.

“NUS supported the call for a move away from the ‘poll tax’ of top-up fees and towards a graduate contribution that is fairer for students. "Any analysis of [the] proposals must be based on robust data and realistic scenarios which take account of the complexities of the debate about the future of higher education and student funding."


Another attack on for-profit colleges

With a brief blog post appearing in its “College” section The Huffington Post joined in the chorus of liberal media outlets demanding more government control of businesses.

The article entitled, ‘Degreed And Jobless, For-profit College Graduates Turns to Stripping’ presents readers with a false idea of what the article is discussing.

The blog posts tells the tale of Carrianne Howard, a graduate of the Art Institute of Fort Lauderdale (a for-profit college) who secured a job in the video game industry after she graduated. She made $12 an hour until her position was eliminated. She is now working as a stripper.

But Howard’s story just led to an argument for government regulation of for profit colleges. “Howard's story is not entirely unique -- and experiences like hers are driving the government's investigation into the efficacy and recruiting practices of for-profit colleges,” the unnamed blogger wrote.

“This week, a Government Accountability Office report detailed how for-profit recruiters often promise potential students unobtainable jobs and high salaries, and tell them to lie to procure more federal financial aid,” the Huffington Post said.

The article didn’t document the GAO’s qualification to determine what constitutes “unobtainable” positions or pay in the dozens of industries for which students study. Nor did it furnish instances of dishonest financial aid coaching. Still, the demand for increased government regulation did not stop there.

“At a Senate Health, Education, Labor and Pensions Committee hearing on the report Wednesday, Sen. Tom Harkin (D-IA) slammed for-profit institutions, saying that the report made it "disturbingly clear that abuses in for-profit recruiting are not limited to a few rogue recruiters or even a few schools with lax oversight," The Huffington Post said.

The fact is, the Obama administration and Democrats in Congress have targeted for profit colleges, and the Huffington Post was just helping to publicize the effort. Andrew Ferguson of The Weekly Standard explained the issue in his article ‘Obama’s Crusade Against Profits, Coming soon to a College near you.”

“We should quickly stipulate that for-profit colleges are hardly delicate flowers of free enterprise. They are creatures of government subsidies without which they would become unrecognizable. And they are happy to meet the government on its own terms,” Ferguson wrote.

That said, Ferguson painted the all-too-familiar and utterly predictable result of the Obama administration taking an interest in a given industry:
If the administration gets its way and the regulatory regime continues to tighten, the for-profit education industry won’t cease to exist. More likely it will regress into a form of state capitalism, as a kind of public utility: utterly dependent on government subsidy, hence utterly submissive to government authority, which can set prices and profit margins. The health insurance industry, with the passage of health care reform, is halfway there already.


Baby boom creating 'critical' shortage of primary school places in England

The baby boom is a side effect of the vast influx of foreigners allowed by Britain's former Labour government. Around half of the births are to non-British mothers

A baby boom is creating a 'critical' shortage of primary school places, it emerged last night. It will also affect class sizes, with more than half a million primary school children expected to be taught in classes of more than 30 from next month.

Schools are prevented by law from allowing classes in the first two years from exceeding 30. But that often simply means head teachers are forced to create much larger classes for older age groups.

The scale of the problems is such that thousands of pupils will be taught in temporary buildings when the new school year begins. A leaked Government report revealed new classrooms are needed immediately for as many as 60,000 pupils.

Ministers have attacked Labour for failing to prepare for the influx of new pupils, despite warnings schools did not have the places. Figures show the number of children at English primary schools will rise for the first time in a decade, to 3.96 million. And over the next four years they are expected to grow by another 320,000.

The report said: 'A considerable number of local authorities [are] claiming that they have been "caught out" by recent changes in demographic patterns and [are] seeking additional central funding for some 60,000 additional pupil places.'


No comments: