Tony Blair’s former higher education minister says crippling interest rates on student loan repayments are ‘penal’.
The Government has gone “too far” in increasing the cost of university, according to one of the main architects of the tuition fees system.
Tripling fees from £3,000 to £9,000 per year and beyond, along with punishing interest rates placed on students loan repayments, leaves students at an unfair disadvantage, Tony Blair’s former Higher Education minister suggested.
Speaking to The Independent, Bill Rammell, who is now vice chancellor of the University of Bedfordshire, said the proposed 6.1 per cent interest rate set to hit graduates this autumn was “penal” and needed urgent reassessment.
“The decision to increase [fees] to £9,000 shifted the balance too far towards the individual’s responsibility to repay, and I think that should be looked at,” he said.
He will, however, be upping the cost of his own university’s fees in line with the controversial new government Teaching Excellence Framework.
His comments come amid growing debate over the soaring cost of going to university, with latest figures suggesting undergraduate students leaving university this year face life-long debts of more than £50,000.
As Higher Education Minister under the last Labour government, Mr Rammell pushed forward the first variable tuition fees of up to £3,000 per year – paid by students who enrolled from 2006 onwards.
Speaking at the time, the minister claimed the charges were needed in order to “maintain and develop a world class system of higher education”.
More than 10 years on, he maintains that he has “no regrets” over the implementation of the fees, despite disagreeing with the spiralling student loan interest rates and additional fee hikes that followed.
“I do think overall, the inception of fees has brought significant benefits for students,” he said.
“You can go to any university in the country and see the quality, the focus on the student experience has been enormously improved, and that happened because of that funding change – bringing in fees.”
“If we were to scrap fees now – as some are advocating – the cost of that would be eleven billion pounds, and I cannot see how any government would return that to universities.
The Labour election manifesto promise to scrap tuition fees entirely arguably won the party considerable favour among young voters.
Asked about the plausibility of this move in the weeks that followed the election, however, shadow Education Secretary Angela Rayner admitted the policy remained an “ambition”, since the true cost to the taxpayer would realistically touch on “£100bn”
It is this kind of “knee-jerk reaction” Mr Rammell is wary of for the Labour party moving forward.
“Scrapping fees would mean that student number controls would come back on,” he said. “It would impinge on university autonomy, which is one of the hallmarks of our system.”
To put this into context, were fees to be scrapped, the vice chancellor’s own institution would see its income fall from £113m to £33m – a 71 percent cut – “because people forget that when the present government increased fees, they cut the teaching grant for universities by 80 per cent”.
The discrepancy in hiking the fees even further, he argued, was that universities are no longer feeling the effects.
“The change should be accompanied through an absolute guarantee that the government will make good the funding loss, and I’m not sure any government is in any position to guarantee that at the moment.
“I therefore think that we need to avoid knee-jerk, uncosted, ill-thought-out changes which would damage the universities and damage students.”
Government reforms to higher education brought in from this year include the new Teaching Excellence Framework (TEF) rankings, which allow universities that meet certain standards to up their fees above the previous cap of £9,000 for the first time.
A fall in overall application rates, questions raised over “fat cat” vice chancellors’ salaries, along with rising dissatisfaction levels as reported in the recent national student survey, has widened the debate over the true value of a university degree in recent months, however.
Wading into the debate this summer, universities minister Jo Johnson expressed particular concern over what he called the “racheting up” of vice chancellors salaries at a time when students are questioning value for money in their degree courses.
With a reported salary of £230,000, Mr Rammell is not immune to such criticism, previously arguing the amount was justified since he had a “very demanding job in a very competitive market”.
He has also denied claims that soaring tuition fees would fund a bloated layer of managers at the expense of students and academic staff.
Speaking to The Independent he said: “I recognise the need for restraint on pay from the top – it’s why for two years now I’ve asked my Board to freeze my pay.
“But the average vice chancellor salary is less than 0.2 per cent of a University’s budget, so fees are not about vice chancellor pay. They are about sustaining university budgets to improve the student experience.”
While the University of Bedford ranks low in the traditional university league tables (109th place in the Complete University Guide, 601st in the Times Higher Education World University Rankings last year) the relatively new institution was awarded a silver in the TEF.
This allows the institution to up its fees to the same level paid by undergraduates starting courses at the likes of Oxford, Cambridge and Imperial College London.
“Yes we will take that opportunity to raise fees,” Mr Rammell confirmed.
“We’re doing that because if you don’t it cuts the amount of funding that is available to invest in the student experience.”
A recent Sutton Trust survey found the proportion of young people who said they were likely to go on to university to be at its lowest level recorded in years, with many citing cost as a major concern.
However, ministers have insisted the loans system is “progressive” because lower-earning graduates have their debts written off after 30 years.
Mr Rammell said: “The ability to put your fees up by inflation doesn’t affect in any way the monthly repayments students make when they’re in work earning more than £21,000 per year.”