England has the honour – or shame – of being out there on its own when it comes to hitting its young people with debt for their education.
England has the highest student fees in the European Union – and worldwide we’re up [or should that be down] there with the worst, only the USA and Korea can beat us.
This national shame is a direct result of the LibDem/Tory Coalition’s decision in 2012 to pass on the costs of Higher Education from the Government to the student – TREBLING student fees for most courses to £9000 p.a.
In 2012 the Coalition Government changed its method of funding for Higher Education.
The fee rise replaced funding which was cut from Universities in the Coalition’s early spending review.
Before that the government paid the bulk of funding for teaching– from 2012 on that cost was passed directly on to students in higher fees.
The choice for universities was – poorer quality higher education – or higher fees.
The choice for students was no choice at all – higher fees, or no higher education.
And what’s been the benefit of all these extra fees to the taxpayer?
The fees are covered by Government backed student loans.
But these loans will not all be repaid – many will be written off in whole or in part.
The Government itself estimated last year that 45% of the loans taken out to cover fees would never be paid back.
Once that figure tips 48.6% any gains from fees become losses.
The average student will now graduate with £44,000 of debt. That’s bad for them, because they have tens of thousands of pounds of debt hanging over them for decades – but it’s bad for the taxpayer too, because almost three quarters of students will never pay their loan back in full, and the cost of writing it off has to be met by the Government. In fact, government forecasts show that the current student fee system is set to add £281 billion to the national debt by 2030-31.
So debt for students becomes debt for all young people – and all of us – national, public debt.
The system is broken – and only Labour has plans to tackle it.
Cutting tuition fees from £9,000 to £6,000 will reduce average graduate debt by nearly £9,000. And because our plan is fully funded, it also means £40 billion less government debt by 2030-31, or over £10 billion less government debt over the next Parliament.
We will also help students from lower and middle-income families by increasing student grants by £400, so that the full grant goes up from around £3,400 to around £3,800. More than half of students will benefit.
We will pay for the grant increase by asking the highest earning graduates to pay more: increasing the interest rate on the loan from 3 to 4 per cent for those earning over £41,000. This will make the overall system of repayment fairer, but all students will be better off overall as a result of our plan – with less debt, and less to repay.
Students who are currently in their first year at university will benefit from Labour’s plan . We will cut fees to £6,000 from September 2016. That means that students who are now in their first year at university will see their fees capped at £6,000 in their third year. Students who start university this autumn will see their fees capped at £6,000 from their second year onwards. And students who start in 2016 will see their fees capped at £6,000 from the start.
Universities will not lose out. Our plan is fully funded, so we will increase the teaching grant universities receive by the same amount that their fee income from English students falls – around £2.7 billion.
Labour’s plan is fully funded by restricting Pension Tax Relief for those on the highest incomes
At the moment, people with incomes over £150,000 get tax relief on pension contributions at a rate of 45 per cent – more than twice that of basic rate taxpayers. This means that although they are only the top 1 per cent of taxpayers, they receive 7 per cent of all Pension Tax Relief. So we will make the system fairer by restricting Pension Tax Relief by £2.9 billion for those on the highest incomes. We will reduce the rate of relief for those with incomes of over £150,000 to 20 per cent – the same as basic rate taxpayers. And we will reduce the annual and lifetime allowances to cap the amount that people can put into their pensions tax free: £30,000 a year, or £1 million across a lifetime. This is far more than most people can ever afford to put into their pension pots.
As Ed Miliband said in Leeds on Friday
‘Britain needs the best educated young people in the world. Britain mustn’t send our young people off into life saddled with unsustainable debt.
Britain mustn’t penalise the young, if we’re going to prosper in the future.
Our economy and our country can’t afford to waste the talent of any young person.
This is a better plan for Britain. A better plan for our young people.’
‘But that is not just the concern of young people themselves.It is the concern of every generation.
Every parent, every grandparent, every person in our country, cares about the future of our young people.
Today is the day we say: we will not make the young pay the price of hard times.
I appeal to every parent and grandparent in Britain, every concerned citizen:
Let’s together turn around the prospects of young people.
Let’s make ourselves again a country where the next generation does better than the last.
Let’s restore the promise of Britain.
Let’s be a country which again believes in our young people.
So we can be country which all our young people believe in again.’
If you want to help get the Labour government that will do all this – vote for Alex Sobel here in Leeds North West on May 7.
And why not give him a helping hand before May – by signing up here