Higher Education: Yet another ‘borrowing’ power not available to Scotland

(c) UWS

By stewartb

The UK government’s Department for Education has been consulting on the re-introduction of STUDENT NUMBER CONTROLS (SNCs) for universities in England. It points to perverse incentives for institutions offering poorer/less impactful courses, with relatively low entry requirements, to more and more students whilst charging similar fees.

See https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1057091/HE_reform_command-paper-web_version.pdf

I’ve yet to read the Reform Scotland report. I trust it acknowledges key differences in the HE systems in Scotland and England – very long tail of ‘low tariff’ (easier to enter) institutions in England, none of these in Scotland according to UCAS; importance of HE provision delivered by colleges in Scotland, with a well-developed process (‘articulation’) for college students to cross over into universities during their studies.

The UK government consultation document makes much of the importance of ‘quality’ of students’ educational experience and not just number of students attending university. It also emphasises the importance of technical/vocational education at colleges and apprenticeships: it’s not all about universities! And of course there is a lot of evidence now about the ever increasing size of the ‘student loan book’ associated with tuition fees etc. in England, much of which may never get paid off anyway.

The public financing of student loans in England has long been a ‘murky affair. This is from Paul Johnson of the Institute for Fiscal Studies as far back as 19 Feb 2018:

‘The first thing you need to understand . . . no, understand isn’t the right word, there is not enough logic here to allow understanding . . . the first thing you need to know is that when the government spends about £14 billion this year on loans to students, government debt rises by £14 billion but government borrowing does not. That £14 billion does not count against the deficit. That’s because the national accounts treat student loans as financial transactions. A loan is issued. It is due to be paid back in the future. There is no impact on the deficit unless and until the borrower fails to pay back.

‘But wait a minute. The student loan system is not devised even on the basis that all these loans will be paid back. The whole point of the system is that if you don’t earn very much, you won’t pay back very much. It is designed that way for a reason: it helps to ensure that people are not put off attending university. They don’t bear the risk of having to make large repayments from small amounts of earnings. Perhaps 80 per cent of graduates will not repay in full, given existing rules. Jo Johnson, minister for higher education until the recent reshuffle, thinks that under present rules between 40 per cent and 45 per cent of the value of loans will not be repaid.

‘This is, in fact, reflected in the Department for Education’s own accounts, which are likely this year to write off more than £6 billion of the loans that it makes to students. It is, nevertheless, not reflected at all in government borrowing figures.’

I’ve no idea whether such financial chicanery is still going on: do the UK’s national accounts still persist with this practice? Yet another ‘borrowing’ power not available to NI, Scotland or Wales. Barnett implications anyone?

9 thoughts on “Higher Education: Yet another ‘borrowing’ power not available to Scotland

  1. I am happy to be corrected but as I understand, this massive debt us a UK debt, so despite being predominatly created by English students we all get to pay it back pro rata when they default. Another sneaky scam by the parasite millstone.

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  2. I would hope John that when the debt comes to be assigned that it is dealt with in forensic detail rather than just “ok you Jocks, here’s a population share”. For instance, a state pensioner in Croydon will cost the country more than a state pensioner in Strathclyde (Johnson’s claim that a pound spent in Croydon is worth more than one spent in Strathclyde) because the former – on the basis of life expectancies – can be expected to live longer. So if both retire at the same age, the pensioner in Croydon will draw their pension for longer.
    This whole process will require considerable planning and negotiation. The issue is not debt, but the cost of the debt.

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  3. You’ve yet to read the Reform Scotland report.
    You’re going to be disappointed when you do.
    It headlines the meaningless increase of 84% in the number of applicants not getting accepted in their introduction but no explanation why they didn’t use the last five or six years when there is a reduction of around 5%.

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  4. Stewart, I dont know if I would rush to condemn “STUDENT NUMBER CONTROLS (SNCs)”, IF this means that there will be an upper limit for student numbers taking a particular course (vocational degrees) or faculties (universities where students graduate from a faculty rather than a numbed degree).
    This could bring two advantages
    1. that graduates would qualify to employment where there are actually jobs. We have too few Scientists and Engineers for instance (I wont mention Media Studies degrees). When I went into HE teaching in late 70s the Scottish Office, as it was then, put limits on student numbers in each degree and you got fined if you went over your number. Now its like “admit till you boke” – and then you face the reckoning in May!
    My view is that University education has been overly hyped – there are some quite able students for whom University is not the best option and can be positively harmful. My own son would have done better with a professional training in journalism rather than struggling through University to work as a journalist. Not only do we not have enough Scientists and Engineers, but we dont have enough at technician grade – even plumbers and electricians. School pupils going into these kinds of jobs are not failures. It’s just another kind of success suited to their attributes.
    2. As such it would start to profile the working population to be what is required for the kind of economy we want/need on and after independence. We might even be able to exercise some control on which students go to University (ie from Scotland).

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    1. ‘I dont know if I would rush to condemn “STUDENT NUMBER CONTROLS (SNCs)’: To be clear, I don’t – at least not out of hand.

      There is a complex of issues to consider in terms of national policy here, including but not limited to: (i) quality vs. quantity of university education provision; (ii) varying personal, social and economic impactfulness of courses being taken; (iii) value of HE in colleges of ‘articulation’ with universities; (iv) balancing finance for university education with that for technical/vocational education in colleges and for apprenticeships (and for continuing professional development training); and (v) choices around loading costs of tertiary education onto individual students or – arguing that it is a national, public good – loading costs on general taxation.

      The university sector has a powerful, institutional voice. As Scotland within the Union has strict limitations on what level of financial resource is available to be deployed on different public services, the resourcing balancing act between different needs and wants is critically important and – to say the least – non-trivial to get ‘right’! . And is there a ‘right’? The Scottish Government won’t, can’t please all special interest groups.

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  5. The ConDem cut Education funding £6Billion a year from 2015 to 2020. £30Billion. That has never been restored. Increased fees, loans and student debt in the South. Over half will never be repaid, with increased admin costs.

    Scotland had to mitigate the cuts. Plus colleges and apprenticeships. Scotland pro rata has the most universities in the world. Contributing to the economy. Scotland the land of discovery and invention.

    Labour means testing meant students with the best qualifications could not go to university. Scotland has 20-25% matures students.

    Scotland has the highest number of students pro rata. Values education. One of the first countries to have tertiary education 14.

    Educated to ability not the ability to pay. Scotland has one of the highest number of uni and students, pro rata, in the world. Aiding the economy. Canada next has 56%,

    Communications TV radio led on to computers and the internet. A massive aid to education worldwide. Scottish invention and discovery changed the world.

    Teacher are more qualified and earn more remuneration. It would be even better without Westminster crass interference. Scotland has to mitigate the cuts to aid the economy. Westminster poor, bad decisions.

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