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Last Updated: Wednesday, 25 June, 2003, 10:32 GMT 11:32 UK
Student plans go head to head
Prospective students being shown around a university
The government wants more people to try higher education
An expert analysis of higher education funding concludes that Labour's plans might be socially fairer than the Tories' - if they can persuade enough people to take on the extra debt involved.

The government wants to raise tuition fees and increase student numbers in England - the Conservatives to abolish tuition fees and leave student numbers roughly the same.

The Institute for Fiscal Studies (IFS) examined the impact on students and on the wider population, publishing the findings in a report, "Study now, pay later", or "HE for free"?

It says that under both proposals, students would be better off to the same extent while they were studying than under the current system.

Divergent paths

Their gains would still not be enough to cover their living costs, calculated by the National Union of Students (NUS) as being 6,200 for a first-year student living away from home, for rent, food, bills, leisure, insurance, laundry, clothing, travel, books, photocopying and fees - not including the 1,100 tuition fees.

But once they finished studying, the effects on graduates "could differ significantly", says the IFS.

Under the government's plans, higher contributions to tuition fees - which could rise from 1,100 a year now to 3,000 - would leave graduates with bigger debts than under the Conservative system.

They would then have to repay their debts for longer while working.

Cost to taxpayer

The IFS calculates that - with no career breaks - the "average" graduate would make loan repayments for seven years under the current system, eight under the Conservatives' proposals and 10 years under the government's.

The overall cost to the taxpayer would be "about the same" under both systems - 1.8bn under the government's white paper, 1.7bn under the Conservatives' proposals.

The shadow education secretary, Damian Green, pointed out that this meant his party's proposals to scrap tuition fees would cost 100m less than the government's plans.

The IFS notes however that the Tories have not assessed the possible extra costs in the further education sector if significant numbers of people go into vocational education rather than to university as a result of their reforms.

Its report says that, for a given amount of government spending, more students could go to university under the white paper proposals because graduates would be contributing extra money through paying for tuition fees.

And it says: "The Conservative proposals would benefit the richest households more than the government proposals, while the poorest households would be worse off."

'Seems fairer'

Assuming the government's plans went ahead and the system then changed to the Conservatives' way of doing things, the poorest households would lose 1.5% of their income on average, while the richest would gain by about 0.4%.

Under our proposals more students from less well off families would be likely to go to university
Conservative spokesman Damian Green

Its reasoning is that under the Conservatives' proposals, "lower income taxpayers (who are less likely to be graduates) would bear more of the total costs of tuition than under the white paper".

"In addition, fewer people from lower income families would be likely to go to university." The Tories dispute this.

IFS research economist Greg Kaplan said: "The white paper reforms would ask graduates to pay more of the costs of attending university and would extend the reach of the university system.

"On the face of it, this seems fairer and more efficient than asking taxpayers in general to pay more for each student, as the Conservatives propose."

But he said the success of this approach "depends crucially on whether the government can persuade young people that taking on bigger loans should not deter them from entering higher education".

Damian Green said: "The IFS study refutes the government's claim that abolishing tuition fees will mean big cuts in current student numbers."

He did not agree with what the IFS said about poorer families being worse off.

Labour rebellion

"The IFS has assumed that fees will not discourage students from less well off families from going to university," he said - but the annual NatWest survey suggested they would.

"So under our proposals more students from less well off families would be likely to go to university, reversing the IFS assumption that they will simply pay taxes but not get the benefit of free university education."

On Monday, 10 Labour MPs rebelled against the government in a Commons debate on tuition fees and many more abstained.

The debate was called by the Liberal Democrats, who favour abolishing tuition fees, restoring grants for poorer students and giving universities more money. Their policy did not feature in the IFS study.

The Tories are holding their own debate on the issue on Wednesday.

NUS president Mandy Telford said: "Neither the government nor the Conservatives have got it right with their plans to fund higher education.

"Neither of them are providing students with the support they need to get through university."


SEE ALSO:
Top-up fees defeat
24 Jun 03  |  Politics
Lib Dems fight tuition fees
23 Jun 03  |  Politics
Tuition fees 'justified by earnings'
21 May 03  |  Education
'Fair access' test for universities
08 Apr 03  |  Education
Top-ups 'will deter students'
05 Jun 03  |  Education


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