Live updates

Student finance system 'lost its last shred of credibility'

Shadow universities minister Liam Byrne has waded into the debate stating David Cameron's finance system has lost credibility, he said:

"David Cameron's student finance system has lost its last shred of credibility."

He also stated that degree costs have trebled previous to this announcement which could now damage "public confidence."

(File photo) Statements from the Student Loans Company Limited. Credit: Johnny Green/PA Wire

Government 'needs to look again' at student finances

The Government "needs to look again" at student fees after a change in university finances in 2012, an education think-tank said.

The new system will benefit graduates who earn very little in their lifetime.

But for many professionals, such as teachers, this will mean having to find up to £2,500 extra a year to service loans at a time when their children are still at school and family and mortgage costs are at their most pressing.

With recent revelations about the proportion of loans unlikely to be repaid, it seems middle-income earners pay back a lot more but the Exchequer gains little in return.

We believe that the Government needs to look again at fees, loans and teaching grants to get a fairer balance.

– Conor Ryan, director of research at the Sutton Trust

The report comes just weeks after it was disclosed the Government believes around 45% of loans will not be paid back, close to the 48.6% threshold at which experts thinks they will begin to lose more money than it makes.

Read: In numbers - How expensive is university now?

Advertisement

In numbers: How expensive is university now?

A majority of students leaving university now will still be paying back student loans in their early 50s, according to new research.

A new student finance system was introduced in 2012, but how does it compare with the old system?

Figures from a study commissioned by The Sutton Trust

  • Tuition fees were raised to a maximum of £9,000 a year in 2012, almost treble the previous fee which stood at around £3,000.
  • Students do not have to start repaying their loans until they have graduated and are earning £21,000 a year, at a rate of 9% on all income above this threshold.
  • In comparison, under the old system there was a £15,795 threshold.
  • Debts are written off after 30 years.
  • Those studying for a degree now will also pay an above-inflation interest rate of up to 3%, which begins while they are still at university. Previously, there was no real rate of interest.
  • A typical student now leaving university will have more than £44,000 worth of debt from loans - without accruing interest after graduation - around £20,000 more than they would have done under the old system, according to the research.

Read: Most students 'will be paying back loans in their 50s'

Most students 'will be paying back loans in their 50s'

A majority of students will still be paying back university tuition fee loans when they are in their early 50s and many will never repay their debt, new research suggests.

University students celebrating their graduation. Credit: Chris Ison/PA Wire

Almost three-quarters of graduates will have at least some of their loan written off, The Sutton Trust commissioned study said.

The findings showed that the new student finance system, implemented in 2012, could leave some people vulnerable who are trying to cover loan repayments at a time when family costs are high.

Farage blames Maureen Lipman for low quality degrees

Nigel Farage has blamed a 1980s advert starring Maureen Lipman for too many students studying what he says are poor quality university degrees.

The actress starred in an advert for BT in which she tells her grandson that getting an 'ology' made him a scientist.

Actress Maureen Lipman has come under fire from Nigel Farage Credit: Barry Batchelor/PA Archive/Press Association Images

In a phone-in on the Daily Telegraph website, the UKIP leader said:

"I think we are sending too many youngsters to university. I think we are encouraging people to go and get degrees, in many cases not particularly good degrees

"I blame Maureen Lipman for the whole thing. If you remember the advert, 'oh he's got an 'ology'."

Advertisement

Repayment threshold 'much higher than expected'

The threshold before graduates start paying back tuition fees is much higher than the Government originally planned, according to a former adviser to the Universities Minister.

The Government has got the maths wrong, plus the economy has changed. The £21,000 repayment threshold is in real terms much higher than the Government expected."

– Nick Hillman, former government adviser

'Big funding gap' emerging in higher education

The Government 'got the maths wrong' on how much money the Treasury would recoup from student loans for new higher university tuition fees, a former ministerial adviser has claimed.

Universities Minister David Willetts is under pressure over tuition fees. Credit: Tim Goode/EMPICS Entertainment

Nick Hillman, who worked for Universities Minister David Willetts said there was now a "big funding gap" emerging.

His claims follow new estimates suggesting the cost to the public purse of unpaid loans could eventually end up cancelling out the money raised by the move to raise fees to up to £9,000 a year.

UK spending on university 'comparable with Chile'

The UK needs to spend more on higher education if it does not want to lose its reputation as one of the best places in the world to study, the head of the Russell Group has said.

Wendy Piatt, Director General of the group, which represents 24 leading universities, said Government spending matched Slovakia and Chile - "far less" than its main competitors:

The UK was recently ranked as the best in the world for the quality of its research.

However, UK public spending on higher education and research is comparable with that of Slovakia and Chile, far less than competitors like the US, China and most western European countries.

And while we currently punch above our weight, only with increased, long-term investment in research will the UK's leading universities and hi-tech industries continue to compete on the world stage.

– Wendy Piatt

Read: Top 10 universities according to the Times Higher Education

Load more updates

Advertisement

Today's top stories