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Monthly Archives: April 2014

According to the Times Higher Education:

A sector-wide panel of experts is to look at ideas for reforming England’s university funding system after an influential thinktank said that trebling fees has saved the taxpayer less than £400 a year per student.

The panel is convened by Universities UK, the club of university vice-chancellors, which previously lobbied for higher tuition fees.

It will be chaired by UUK president Sir Christopher Snowden, vice-chancellor of the University of Surrey, who said he wanted to seek a “broad political consensus for a sustainable system of funding”.

Other members of the Student Funding Panel include six other university leaders, economist and principal of Hertford College, Oxford Will Hutton, and Emran Mian, director of the Social Market Foundation and the former civil servant who was lead author on the 2010 Browne Review [which recommended the trebling of tuition fees].

Although this is an admission that the current funding system is in crisis, we should be worried. The over-riding purpose of the panel is to reduce the cost of loans to the state, not to investigate a fairer or more rational funding system. Already there are hints that repayment rates should be increased:

According to the IFS report, if graduates were asked to pay 12 per cent of their income over £21,000, instead of the current 9 per cent, the loan write-off rate would fall from an estimated 43.3 per cent to 35.6 per cent. A 15 per cent deduction would lead to a write-off of 30.9 per cent – close to the 28 per cent default rate originally predicted by ministers.

Lowering the repayment threshold from £21,000 to £18,000 would also yield savings, but less dramatically, by lowering the write-off rate to 36.9 per cent.

According to the Guardian:

Sir Christopher Snowden, the president of Universities UK and Surrey vice-chancellor who will chair the panel, left open the possibility that the terms of student loan repayments could be changed to keep the current funding model sustainable.

 

The National Union of Students (NUS) will be asked to prepare a submission to the panel. The student movement should be demanding:

  • No increase in the repayment rate
  • No lowering of the repayment threshold
  • The abolition of student debt and the introduction of grants
  • Free education funded through taxing the rich.

UPDATE:

From Universities UK:

Members of the panel include:

  • Professor Sir Christopher Snowden, Universities UK President and Vice-Chancellor, University of Surrey
  • Professor Dame Glynis Breakwell, Chair of the Universities UK’s Funding Policy Network and Vice-Chancellor, University of Bath
  • Professor Janet Beer, Vice-Chancellor, Oxford Brookes University
  • Sir David Bell, Vice-Chancellor, University of Reading
  • Will Hutton, Chair of the Independent Commission on Fees
  • Paul Johnson, Director of the Institute for Fiscal Studies (IFS)
  • Emran Mian, Director of the Social Market Foundation
  • Professor David Latchman, Master of Birkbeck, University of London
  • Professor Paul O’Prey, Vice-Chancellor, University of Roehampton
  • Mike Rowley, UK Head of Education, KPMG
  • Professor Sir Steve Smith, Vice-Chancellor, University of Exeter
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The finance website Slate has published an interesting article on radical free-market economist Milton Friedman’s views on higher education funding. In 1954, Friedman:

laid out a radical new plan for funding education in a footnote to a lengthy academic volume. He described a system where individuals would sell “stock” in themselves—i.e., a share of their future earnings—to investors who would finance their education and training. “The purchase of such ‘stock’ would be profitable so long as the expected return on investment in training exceeded the market rate of interest,” he and his co-author, Simon Kuznets, wrote.

Surely this idea is too horrible to envisage in real life? Well, that was said about other elements of neoliberal policy, such as mass privatisation of public assets and letting unemployment soar to tackle inflation, until they were tried by governments in Chile, the US and the UK. Now, such notions are common sense amongst the ruling-class everywhere. According to Slate:

Sixty years later, the lending system Friedman envisioned is beginning to take shape. Income share agreements—contracts that allow investors to give individuals money upfront in exchange for a percentage of their future earnings—are quietly gaining a following among critics of the nation’s staggering student-debt problem. New companies such as Upstart, Pave, and Lumni have turned to the investing-in-people model to help talented individuals secure funds for anything from education to business ventures.

The basic theory behind income share agreements (ISAs) is “that they make life more manageable for the borrower because the debt is repaid in proportion to earnings.” Now, where have we heard that logic before? As Labour List reported earlier this month, the Labour Party leadership is considering replacing tuition fees with a graduate tax:

The most economically sensible way of making a graduate tax viable would be to offer a fixed term repayment period (the NUS previously suggested twenty years) and an increasing tax scale dependent on earnings.  This would make it possible to collect the same amount of revenue as tuition fees whilst ensuring that ability to pay is aligned with amount repaid.

What both systems – ISAs and the graduate tax – have in common is that education is seen as an individual investment in future earnings. With the ISAs, this is financed in advance by a private investor; with the graduate tax, it is financed retrospectively through a tax on individual graduates – essentially, through a tax on learning.

ISAs are particularly noxious because they allow private capital to decide which education should be funded. A society without art, literature and philosophy would be a poor one, in every sense. Yet, it is difficult to point to the immediate income dividend from any of these things and such an investment would be risky. Even from the standpoint of capitalism itself, this has dangers. Many technological developments arise from scientific work initially conceived of as theoretical with little intended practical application. It is difficult to foresee which research, or which learning, could prove useful, notwithstanding the fact that we should reject these utilitarian criteria and assert that education for its own sake is valuable.

Even under our current system of loans and fees, private capital is re-shaping education. It does so most directly in the sense of business leaders and the government crafting courses to turn out graduates with the skills to work in industry. Less directly, the growing conception of education as preparation for the world of work means that school-leavers feel pressure to opt for courses more likely to lead to a job.

A graduate tax would perhaps solve part of this problem, if education was made free at the point of delivery. Yet, it continues to re-inforce the idea that education is an individual benefit, not a wider social good, and that it should be paid for solely by individual graduates. To be sure, ISAs are worse but both systems are based on the same warped principle. We recoil at ISAs only because it makes the principle explicit.

On one level, a graduate tax lets off the capitalists who benefit from our skills, placing the burden of paying for education on workers ourselves. More fundamentally, though, we don’t let healthy people off funding the NHS, because it’s in everyone’s interest to have a healthy society; and it’s not just motorists who pay for roads, because infrastructure is necessary for society as a whole to function. The graduate tax introduces a user-pays logic which, if applied to other public services, would undermine universalism and pose a severe threat to the welfare state.

Besides, there already is a tax based on earnings – income tax. A more progressive income tax, with higher rates for the rich, could pay for education, and the other services we need.

The National Campaign Against Fees and Cuts (NCAFC) has called a national free education meeting on 15 June, to be co-hosted and run by all individuals, groups and sections of the movement who want to work together for fight for free education.

The Labour Campaign for Free Education will be holding a caucus at the meeting, which takes place from 10:30am at the SU Arts in London.

Check out the Facebook event for more information: https://www.facebook.com/events/224119391121627/

In the meantime, ‘Like’ our Facebook page and get in touch with us at labourfreeeducation@gmail.com!

 

Slaney Street

“They say the government is an uncaring government. I don’t agree with that. They care all right, they just don’t happen to care for our people. They care for their people.”

In 1996, Tony Benn gave this speech at a demonstration organised by the Campaign for Free Education (CFE), of which he was honorary president.

In 1995, the leadership of the National Union of Students began their (eventually successful) attempt to drop its support for free education and living student grants, in order to smooth the way for the next Labour government to introduce fees. The CFE was set up to combat this move, mobilising thousands of student activists in the NUS structures, in colleges and universities and on the streets.
As well as making the case for free education superbly, Benn’s speech is startlingly relevant to the situation today.

***

I bring support from the Campaign Group of MPs and I congratulate the people who have set up the Campaign for Free Education. It is clear that the present leadership of the National Union of Students have a great reluctance to support the policy agreed at the Derby NUS conference, and something independent of them needed to be set up.

I can’t believe that the NUS leadership can go on for much longer following a policy that has been rejected by their members. There is a broad democratic issue here to be raised.

I do believe that the argument for free education is an enormously powerful one and it is one that we will need to redeploy because people haven’t heard it for a long time. We are starting to have this argument now.

Next week, the Conservatives announce plans to impose a graduate tax. There are people in the Labour Party who support that proposal!

People say to you, well, why should you have free education? I say, well, I’m also a member of the campaign for a free health service, a free fire service; if you have a fire they don’t expect your parents to come along and make a contribution. Some things have to be provided because you need them. You need an educated community if you are going to survive.

This attempt to raise higher the financial obstacles to be surmounted before people can go into higher education will, if they succeed, throw us back to the period when only wealthy people’s sons and daughters went into higher education. That is what it is really about.

Somebody said to me this week: “Some parents can afford to pay for their children’s higher education.” But if they can afford to do that, they can afford to pay taxes, and make sure everybody’s children can go to college!

Therese are very powerful arguments indeed. And therefore I think your campaign, in addition to being about protecting opportunities for young people to go on to college, must be seen as part of the argument for a whole range of other services.

They will say: “If you give grants to students instead of loans or a graduate tax, that money has to come off financing nurses or schools.” Utter rubbish! There is tons of money about, it’s just been spent on the wrong things.

Can you imagine anything more absurd than a graduate tax? If you’re educated then you’ve got to pay a higher sum of money. Next they’ll be introducing an operation tax for everyone who’s had an operation in hospital! It won’t be long before they’ll be talking about loans for operations!

You have to tackle the arguments about where the money’s coming from. Think for a moment where the money is going to now.

Perhaps I could get the House of Commons to divide up the national budget per head of population? Think about the “national budget” in terms of family budgets, and you will see how absurd it is. I might go and knock on a door in Chesterfield and say “How are you getting on?” and they would reply “It’s a bit hard”.

“It’s the money, Tony.”

“Well, aren’t you spending a bit too much on weapons in this household?”

“What do you mean? There isn’t an air pistol in the house.”

No, but every family of four is taxed:

* £40 a week for weapons,
* £40 a week to pay the benefit for people out of work,
* £40 a week for law and order, much of it caused by unemployment, and
* £20 for the Common Agricultural Policy.

Every family of four is paying £140 a week before they’ve paid the rent, mortgage, whatever. That is wrong!

How can they say there’s no money? They’ve given £50 billion to the richest 10% in tax cuts!

They say the government is an uncaring government. I don’t agree with that. They care all right, they just don’t happen to care for our people. They care for their people. Don’t accept the argument that the money isn’t there! It is.

The truth is that the government doesn’t really want an educated working class. It’s bad enough for the government to have a lot of kids roaming around without jobs. But if those kids had a PhD in economics that would be really threatening, because they would know why they haven’t got jobs.

It is very important that this campaign is got across to the widest possible audience.

We will have a job putting this argument across to the Labour Party. The Party will have to think very seriously – even if its only motive is to win the election – about the extent to which you can go on alienating huge chunks of opinion whose support you need.

For example, there is no Labour Party pledge to pensioners who have lost out so much since 1979. There is no support for trade unionists now – they will have to wait for a minimum wage.

If the teachers and the student population are alienated, the Labour Party is going to find it much harder to get its case across.

This campaign should not be focussed on attacking the Labour Party, or anybody else, but concentrating positively on what we want.

We want educational opportunity for everybody, for the whole duration of your life.

In campaigning for education, we are campaigning for the enrichment of human life, for opportunities that have been denied to earlier generations of working people.

This is a campaign for a decent civilised society. I have a very strong feeling that this campaign is going to catch on.

There lots of parents who are worried about loans and taxes and entry fees, worried that their youngsters will not be about to go on to college. And there will be those who remember the time when there were better grants systems, who will feel a sense of injustice. So we are addressing a very wide and sympathetic audience.

I think people now want to see simple demands like full employment, more and better housing, decent education, and so on, implemented. And don’t try to persuade me it can’t be done!

Take full employment. They say you can’t have full employment in a global economy and so on. When I was sixteen, I had a lovely letter from the government. Dear Mr Benn, it said, will you turn up on your seventeenth birthday and we’ll give you free food, free accommodation, free training, 10p a day, all you have to do is kill Germans. It was a youth training scheme!

If you can have have full employment to do that, why in God’s name can’t you have full employment to build houses and recruit teachers and nurses? Because it isn’t profitable.

We need to tackle this absolutely vicious philosophy, that everything has to be profitable before you can even think about it. If we do that then an awful lot of other things will go down the pan in addition to the Tory Party.

This article originally appeared on anticuts.com

Labour Campaign for Free Education: Model Motion

Below is a model motion that you can use at your CLP, branch, Labour Club, Young Labour group or trade union meeting. Leave a comment on the blog if you have got it passed!

Notes:

1) That the 2014 conference of the National Union of Students (NUS) passed policy for free education to be paid for by cracking down on tax evasion and avoidance, taxing the rich, and taking the wealth of the banks under democratic control.
2) Several affiliated trade unions, including UNISON, UNITE and GMB have policy opposing tuition fees and a means of funding higher education.
3) It emerged in March 2014 that the current system of tuition fees and student loans is likely to cost more than the policy it replaced.
4) In December 2013, Labour’s current shadow higher education minister Liam Byrne suggested that the party would support ‘a long-term shift to a graduate tax.’

Believes:

1) That education is, above all, a public good which benefits society and not just individual graduates.
2) That the introduction of tuition fees was designed to undermine universalism, turn education into a commodity, and precipitate the marketisation of the higher education sector.
3) Higher education should be free to access, and funded through general taxation – with the richest in our society paying the most.
4) That although a degree is likely to a lead to higher lifetime earnings, this can also be said about secondary and post-16 education, and many other services provided by the welfare state.
5) Wealthier graduates should simply contribute more in income tax without an additional blanket tax on all graduates regardless of income or situation.
6) That a “graduate tax” is therefore an unfair replacement for tuition fees which perpetuates the notion that education is primarily an individual benefit.
7) That Ed Miliband and the Labour Party should re-open the debate on higher education funding, and enter the 2015 General Election supporting the principle of free education paid for by taxing the rich.

Resolves:

1) To support the Labour Campaign for Free Education
2) To oppose all means of funding higher education through tuition fees or specific taxes on individual graduates.
3) To campaign within the Labour Party and affiliated trade unions for a policy of free education, paid for by taxing the rich.

The Labour Campaign for Free Education was set up in April 2014. It brings together Labour members to campaign for free, accessible, and publicly funded education, to be paid for by taxing the rich and big business.

We want to push the case for free education in CLPs, Labour Clubs, Young Labour groups, affiliated trade unions and all other areas of the labour movement.

The current regime of tuition fees and student loans has been exposed as a failure. The system has reached breaking point.  The government is now approaching the point at which it begins to lose more money than it saves. Not only are graduates facing a lifetime of student debt, but the higher education sector is facing cuts, privatisation and marketisation.

Tuition fees have made education a commodity, to be purchased by individual consumers for their own benefit. We believe that education is a public good, which benefits society as a whole. It should be paid for through general taxation, with the rich paying the most.

We reject other mechanisms to make individuals pay for education, such as the “graduate tax”, which undermine universalism and perpetuate the idea that education is an individual privilege and not a social right.

Since 1996, with only one exception, the National Union of Students (NUS) has not supported free education as it ditched the policy to help Blair introduce tuition fees. In April 2014, delegates passed policy for free education to be paid for by cracking down on tax evasion and avoidance, taxing the rich, and taking the wealth of the banks under democratic control.

As we enter a general election in 2015 where higher education funding will be high on the agenda, we think the time is now to push the case for free education within the Labour Party and our movement as a whole.

To get involved, contact us at: labourfreeeducation@gmail.com