Magazine article Times Higher Education

Demos: Widen Participation by Scrapping 'Overly Generous' Student Loans

Magazine article Times Higher Education

Demos: Widen Participation by Scrapping 'Overly Generous' Student Loans

Article excerpt

The coalition government must take the tough political decision to make student loans less generous if it wants to fix the "central impediment" to an "efficient, competitive and high-quality" higher education sector, according to a report out this week.

The study from thinktank Demos, expected on 3 February, says that lowering the cost of loans to the taxpayer would allow expansion of the system, proper competition for places and would end a "vicious circle" where universities are able to set high fees due to excess demand.

Without such measures, the government would be forced to continue overly bureaucratic policies such as the AAB and core-and-margin plans to try to force competition on the sector, with unintended consequences.

The suggestion forms the key recommendation put forward in the Future Universities report, which calls for loans to be made less generous by lowering the repayment threshold of Pounds 21,000, scrapping the 30-year period after which debt is written off, increasing repayment levels or putting up interest rates.

"Developing and implementing (such policies) would take political bravery and a willingness to admit that the present White Paper, while right in its general thrust, is wrong on many details," the report says.

"But after surveying the evidence, these are the policies we believe would best serve future generations of English students and taxpayers," it concludes.

Matt Grist, the senior researcher at Demos who wrote the report, said his findings were based on the premise that the current state of the UK's public finances meant that increasing direct taxpayer funding for universities would prove to be too difficult. …

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