Interesting times ahead as it became apparent on Friday that the RAB charge has increased again, and that we are now at the point where the cost of running the current funding system for teaching in universities is becoming more expensive than the previous system. This is not going be a palatable story for government, for universities and tax payers (hardworking, of course).

image by freeimageslive.co.uk – gratuit
 

According to the Guardian

Nick Hillman, who worked for Willetts during the introduction of the policy, made the comments after it emerged that the rate of default on student loans is now so high that the £9,000-a-year tuition fees system could end up producing zero financial reward for the government.

Speaking to the Guardian, Hillman called for action to address the “big funding gap” looming in the universities sector caused by mistakes in the government’s modelling and the fact that graduates are earning less than expected.

Last night, the Universities UK alliance of higher education institutions urged the coalition to open talks with Labour on the issue, saying it was vital to think more carefully about how universities can be paid for.

Clearly the funding system has faults, and needs to be reviewed – the news earlier in the year of the amount that had been spent supporting students on sub-degree programmes at private providers seemed to come as a shock to many.

David Kernohan, at Followers of the Apocalypse provides his own take on this news, suggesting the following plan:

• another independent inquiry into HE funding
• the need to keep student number controls a bit longer
• why does the graduate job sector look so bleak
• Nick Clegg should apologise
• review the idea of marketisation…..

Not sure the last 2 are going to happen, bu there is merit in the first 3.

And then two days later, this story is published, again in the Guardian:

Willetts told Channel 4 News the government is “committed” to the current tuition fees system, which ministers believe is “far more sustainable than any alternative”. He also dismissed warnings that it will not bring in enough money to fund universities, saying the estimates of how much students will repay are likely to “bounce around” depending on what experts are forecasting for earnings over the next 35 years.

But, pressed several times on whether fees would have to rise or graduates would start having to repay money sooner, he said: “We’ve got a system with a £9,000 fee and a £21,000 [earnings] repayment threshold. That is our system that we are committed to. Above all it means students don’t have to pay upfront… We have fixed the fees for £9,000 for this parliament.

“But we will have to see how the income of universities performs. But we have a structure for £9,000 and £21,000 and that is working.”

Cathy Newman, a Channel 4 presenter, tweeted that she asked Willetts the question again about the possibility of higher fees after 2015 as he was leaving the studio and the minister replied “could be”.

I’m not going to claim that a single off the cuff comment reported on Twitter can be considered a policy announcement, but this would not be a surprise. Some universities are already pressing for the fee cap to be removed, as they don’t feel that £9000 covers their teaching costs. Removal of the cap would satisfy the neo-liberal argument of opening higher education up to “the market”.

Clearly this a time for the various university mission groups and representative bodies to create a consistent and powerful message about how we believe universities should be funded, to ensure that those who can benefit from higher education will be able to do so, and to support the wide diversity of our sector.

Last year, Steve Smith suggested that another avalanche was coming,and that it was financial not the MOOC revolution being promoted by Sir Michael Barber and Pearsons. Looks like Professor Smith was right.