UKH

Just heard something on the radio about, we (the UK) are going to include the expenditure on student loans, the bit the government picks up, as part of the national expenditure.

The Office for National Statistics (ONS) will now split the loans into two parts – financial assets and government expenditure – as only part of the borrowings will ever be repaid.

Now, I originally hated the idea of student loans, based on the idea of saddling a load of kids with a massive debt at the beginning of their lives.

I change my mind on them, partly due to Martin Lewis, who explained they are more of an "Education Tax" which was only repaid when you broke the repayment barrier.

So far so good, fro the students point of view, but maybe not from the tax payers point of view!

We now have a system where, universities seem to charge the maximum allowable, without regards to value for money.

There's a massive increase in wages paid to chancellors etc. of these universities, again without any tangible benefits to students.

We also have the student loans company which sits in between these two parties and requires funding and administration costs.

We the tax payer picks up and none, paid for loans after 30 years, the amount of which was hidden until the changes in the statistical analysis above.

So what have we actually gained?

We're still spending a load of public money on further education, it just appears to me that we've lost a lot of control about where that money goes and improved nothing, while making some people very very rich.

Haven't we simply deferred a load of debt, for future generations to find the money for?

Basically the government has transferred money that would have been given to Universities as grants into student loans. In the short term this looks good because that money appears on the accounts as a debt owed to the government, rather than just disappearing. In the long term the government (and taxpayer) will be better off so long as:

1. The average amount paid back per student is higher than before (even if the amount written off is also higher) and,

2. The total cost per undergraduate has not risen. I have not seen any evidence of this, in fact I have read articles by University administrators claiming that the amount they get per student has actually gone down.

I would be very interested in evidence supporting the "massive increase in wages paid to [vice-] chancellors", the BBC for example refuted this:

https://www.bbc.co.uk/news/education-41187447

Edit to address a point in the OP: My understanding of the change implemented by the ONS is merely to make the government's accounting more in line with reality. Specifically it factors in the expected shortfall up-front rather than waiting until the loans fall due (~30 years after graduating). This makes the current deficit worse as we are writing off some portion of the debt (to reflect reality).

The problem with the BBC factcheck is that it mised arguably the two most important factors. Firstly the biggest rises in VC pay occured before the 2008 crash. Secondly average staff increases in pay in Universities has been well below the average rise in earning since 2008. If you compare the pay of a VC and that of a chief exec of an NHS trust, with the same budget, the latter has more responsibility, more chance of loosing their job and much harder operational requirements in the role. Most universities can run quite happily when their highly paid VC does next to bugger all.... I know as our first VC was like that.

I'm glad the deficit audit change has been done for student loans, even though HE will probably suffer as a result. Off-balance sheet debt was always a national disaster waiting to happen. It was the next PFI style scandal. The next priority is removing the 430, 000 overseas students from the net immigration stats that the government wants to reduce back below 100, 000. Burning billions of UK HE export income on May's mad ideology (most of the rest of the cabinet are against her on this) 

For Krikoman... you make the same mistake many do....Martin Lewis advises students in the system that exists,  he never looked at the public planning issues of if the system was the most sensible economic and socially beneficial HE funding system. Recent analysis has shown that the debt repayment situation is so bad that there may have been no taxpayer benefit at all in the move from the old 3k fee system to the current 9k fees with higher repayment rates. Think on that for a moment... all that extra student debt for little or no reduction in taxes (and even a chance of increases taxpayer costs). We should as a minimum return to 3k fees immediately and go back to taxation for the extra top-up money required for HE rather than burning the same level of taxes in a broken loan system.

https://obr.uk/student-loans-and-fiscal-illusions/

https://wonkhe.com/blogs/begone-fiscal-illusions-understanding-student-loan...

A system where students view themselves as consumers of a productised higher education. Can’t see that having any effect what so ever on the ability of institutions to maintain robust, impartial standards of quality whilst delivering excellent - and intensively measured and league tabled - customer satisfaction.

We also hid it from the public balance sheet helping out messers Blair and Brown and then some other twerps.  

Except it wasn’t really hidden as everyone knew it was just differed in to the future from day 1, but you could pretend you didn’t know about it a bit more honestly with it off the books as a direct cost...

Customer satisfaction was always something that needed very careful handling in Universities . The customer is not buying a product. They are buying a course, where ability, diligence and enthusiasm are the most important factors in success and where its possible to pay all the money on a well taught and well supported programme and still fail.

The Royal Statistical Society, in their submission to government (for TEF) said there was no correlation of student satisfaction scores (NSS) with teaching quality, except some anti-correlations in 'difficult' subjects.

In two of the other measures (progression and good degrees) it's in the interest of instutions to 'game' the measures as much as it is to try to increase teaching quality or student support.

In conclusion what students see and are satisfied with isn't anything straighforward to do with quality. Gold TEF is more about sytems, NSS and quality of institutional narrative than real teaching and student support  quality.

The clear positives I've seen since TEF came in recently are a bit of a welcome refocus on teaching in a few instutions previously too arrogant to care (research is still their main priority and on the teaching side overseas students are the ones they need to keep happiest) but they can't accept TEF bronze happening again. The initial introduction of fees and change in fee levels made little difference in my opinion.

There have been some other specific improved student support areas (especially for those with mental health issues) but I'm not convinced these relate to fees or TEF. Sadly, due to funding cuts, in some other areas support has dropped in the last few years  (esp dyslexia support).

Messers Blair and Brown were not obsessed with deficits and austerity unlike other twerps.  Brown's fiscal response to 2008 was much more Keynsian. Off balance sheet for them was a minor benefit. For Osbourne and Hammond it was a major advantage.

Actually very few HE commentators predicted the horrendous increase in size of the hidden expense of non repayment of fees  as we moved from the 3k fee and it's repayment schedule to the current 9k fees and the current repayment rules. The Department of Education now estimate 45% of fees won't be repayed and they are unsurprisingly at the lower end of those making such cost estimates. About 40 of that 45% came on 66% of the current fee...the increase to 9k from 3k  (a lot of that due to repayment changes rather than the increase in size of debt). It's quite likely that the real number is over 66%... all the increase in fee...and so the taxpayer gains nothing at all in the change.

Whatever we all think, some of student debt is back on the deficit books soon, thanks to the OBR, and if repayment estimates prove to be optimistic the amount on the books will be adjusted upwards.

Now, I originally hated the idea of student loans, based on the idea of saddling a load of kids with a massive debt at the beginning of their lives.

I thought I'd said that?