David Blackburn

A sustainable and permanent solution

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‘A sustainable and permanent solution’, that was Lord Browne’s refrain this morning. Browne has aimed to fill the £1bn university funding black hole with a system that doesn’t prejudice the disadvantaged or force universities to privatise.

Browne recommends that the tuition fee cap goes, but insists the Treasury should collect a levy from universities that charge above £6,000: fees set at £9,000 will cede 50 percent of £1,000 above £6,000, which will rise to 75 percent for fees of £12,000. This tapered levy is designed to discourage institutions from charging US-style of £20,000.

Browne says that no English or Welsh student should be confronted with upfront costs - at the moment, part-time students pay a contribution whilst at universities. The method for repaying loans should change dramatically. Graduates will still repay 9 percent of their income, but the threshold will rise from £15,000 to £21,000; interest rates will rise from 0 percent to a top rate of 2.2 percent, although rates will be tapered to protect low earners. The income threshold will rise to £70,000 over the course of 30 years, in line with probable wage inflation; Browne estimates that this means the top 40 percent of earners will pay far more than the poorest fifth. All outstanding debts will wiped after 30 years. Student grants will also be radically altered to ease concerns over living costs. Currently, students are eligible for a £2,906 grant if their household income is beneath £25,000; the threshold will remain, but the grant will rise to £3,250. The review also recommends that students in households earning less than £60,000 be eligible for grants, in a hope to allay the fears of the ‘squeezed middle classes’.

The Browne report castigates Vince Cable’s graduate tax – using words like ‘unworkable’, ‘expensive upfront’ and ‘counter-productive’. Having lost the intellectual argument, the Lib Dems must decide whether or not to tear up the anti-tuition fees petition they signed in opposition, or keep Britain’s top universities from creeping into privatisation.

The Browne report is ‘progressive’. He has done more than enough to ensure that the low earners won’t be unduly hit. The political battle has moved to those on middle incomes. The IFS has calculated that the total cost of repayment for those in the income group £35,000-£40,000 is higher than those earning £100,000. I don’t know if the IFS realised that the income threshold will rise to £70,000 over 30 years, not least because Lord Browne has only just announced it on the Today programme; but if they did Vince Cable has an enormous task on his hands: this is not a one-off austerity measure; it is a permanent solution to university funding.