Browne Review - UCU response
- Average family facing bill of between £76,000 and £136,000 to put two kids through university
- Courses and universities facing prospect of closure.
The University and College Union has warned that Lord Browne's recommendations for higher education would have a devastating effect, seeing some universities forced to close and the curriculum dangerously narrowed, as the cost of university is effectively transferred from the state to the family.
If enacted England will have the most expensive public degrees in the world, with families having to shell out between £76,000 and 136,000 to put two children through university.*
According to UCU calculations, a three-year degree with annual tuition fees of £6,000 would cost a total of £38,286, including maintenance loans and interest payments. A three-year degree with annual tuition fees of £12,000 would cost a total of £68,329, including maintenance loans and interest payments (see notes for full calculations).
The report also proposes to create a market in student places which it suggests will facilitate a large reduction in public funding which 'may be equivalent to removing all funding from anything other than priority subjects'.
The union said that, if implemented, the proposals would be the final nail in the coffin for an affordable university degree for the vast majority of ordinary families. It forecast that as a result of the creation of a market for student places, some universities would close, and only so-called priority courses would survive, making innovative new courses unviable and so weakening the UK's position as a global knowledge centre.
Commenting on the report, UCU general secretary, Sally Hunt, said: "This is a savage attack on what a university is and what it can offer to all students - not just those with deep pockets - as it effectively privatises the cost of higher education from state to family.
"Browne's proposals would make our public degrees the most expensive in the world. At an enormous cost of between £40,000 and £70,000 for one child's education, it would be the final nail in the coffin for an affordable university degree for many ordinary families.
"As a result of this creation of a market for student places, we would see departments and universities close and a devastating effect on the curriculum as only so-called priority courses survive. It would become almost impossible to develop courses in new areas of knowledge without directly percieved economic benefit. If enacted, these proposals will weaken our position as a global knowledge centre.
UCU believes big business should be taxed for the substantial benefits it gains from a plentiful supply of graduates and has proposed a modest Business Education Tax for the top 4% of companies - those who make profits of over £1.5m a year. Increasing Business Education Tax to the G7 average of 32.87p and hypothecating the extra revenue to higher education would generate enough annually to abolish tuition fees.
*calculation for a family with a household income of around £50,000 a year and eligible for only a small amount of means tested maintenance grant under Browne proposals
University and College Union Research
The Browne Review: Cost of tuition fees and maintenance loans
This report analyses the cost of higher education loans for tuition and maintenance for 2 students each doing a 3-year full-time bachelor's degree, from a family with an income of approximately £50,000, who would be eligible for a partial grant (amount not specified at the time of writing).
The costs are analysed with the current fee rates at just over £3,000 a year; then at £6,000 a year; at £12,000 a year.
The £6,000 and £12,000 fees are analysed with annual interest rates of 5.3% (the Consumer Prices Index annual inflation rate at August 2010 of 3.1% plus the government's borrowing charge of 2.2%), with a repayment threshold of £21,000. The maintenance loan of £3,750 a year, uprated by annual 2% rate of inflation. Fees are repaid over 30 years: where the loan will never be repaid because the annual interest payment is higher than the annual income-based repayment, the amount paid over 30 years is given.
Cost of fees and maintenance loans under current regime
Current regime of fees slightly over £3,000#
@ annual RPI-linked interest rate
3 years' fees £9,660
3 years' maintenance loans* £13,908
Fee loan interest payments$ £776
Maintenance loan interest payments$ £1,746
Total cost: 1 graduate £26,090
Total cost: 2 graduates £52,180
#for students graduating in 2011.
RPI = all items Retail Prices Index = 4.7% at August 2010: current system interest rate is linked to the all items RPI
*Maximum away from home maintenance loan outside London.
$Based on annual repayments of £2,372, ie 9% of total annual earnings above £15,000 for the 2009 full-time mean average earnings for all professional employees of £41,354 (Annual Survey of Hours and Earnings 2009, Table 14.7a).
For fees of £3,000, £6,000 and £12,000, the fee amount is increased by 2% a year, in line with the government's forecast Consumer Prices Index increases.
Cost of fees and maintenance loans with £6,000 and £12,000 fees
£6,000 fees a year
@ 5.3% interest £12,000 fees a year @ 5.3% interest
3 years' fees £18,362 £36,725
3 years' maintenance loans* £11,477 £11,477
Fee loan interest payments$ £6,551 £18,231~~
Maintenance loan interest payments$ £1,896 £1,896
Total cost: 1 graduate £38,286 £68,329
Total cost: 2 graduates £76,572 £136,658
*Based on annual maintenance loan of £3,750 uprated by 2.0% a year in line with government forecasts for CPI (Consumer Prices Index)
$ loan repayments at the annual interest rate of 2.2% (government cost of borrowing) plus 3.1% CPI (the CPI is the government's preferred measure of inflation, and is generally a more conservative, ie lower, figure than the all items RPI).
Based on annual repayments of £1,832, ie 9% of total annual earnings above £21,000 for the 2009 full-time mean average earnings for all professional employees of £41,354 (Annual Survey of Hours and Earnings 2009, Table 14.7a).
~~Fees are repaid for 30 years: because the annual interest charge on £36,725 is higher than the annual repayment figure of £1,832, the fees loan will never be repaid. The figure in this table shows the amount of interest paid over 30 years.
More on the international fee comparisons can be found on the UCU website