Ben Lowry: The system of student fees in the UK is a fair one but Stormont politicians won’t admit that

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The saga flags up Ulster attitudes to university funding, where we have a very different system of fees and debt here to America, but also to public funding generally (where we react angrily if ever we have to pay for services).

More on that below. First the background to the US row:

President Biden wanted to forgive $400 million in student loan debt in a programme for which 16 million ex students had already been approved. His plan would have forgiven up to $10,000 (£7,800) per borrower for people earning under $125,000 a year (£98,000), and $20,000 for even lower earners.

The US Supreme Court called his plan unconstitutional, sparking fierce debate in America, where right wing politicians think debt forgiveness a waste of taxpayers' funds and unfair on those who have not been to university. Politicians of the left say forgiveness was essential for struggling debtors, particularly given that student loan repayments, which were frozen in the US during Covid, are about to resume amid rising interest rates.

A university education costs far more in the US than the UK. Americans widely agree that graduates should pay for their higher education fees because the state helps to fund their degrees, which help them to earn much more than non graduates. By helping to fund universities, taxpayers are helping students to earn more. Thus it is only fair that they contribute to the cost of their teaching.

In the UK, the cost of tuition in degrees was free for decades. Living costs, however, were funded by the government in grants. When I studied for a degree in England in the early 1990s Britain was edging towards the US model. I did not have to pay tuition fees but I was among the first generation of students that was denied a maintenance grant to cover my living costs. It had become means tested, which was entirely just. My parents were able to fund most of my living costs, and the rest I took out in the form of a student loan, which was a new thing in the UK. I have been pro student loans ever since.

After I graduated the UK gradually introduced tuition fees because there was growing acceptance of the fact that graduates earn more than non graduates and so should contribute to their fees. But in Northern Ireland, the idea that you should have to pay for such a thing is unpopular. Barely a Stormont MLA argued that it was unfair for people on modest salaries, who lack degrees, to have to pay taxes that help fund universities that enable students to become higher earners.

Thus while England has a cap on tuition fees of £9,250, Northern Ireland set a cap on fees of less than half that amount (in a grisly twist to that saga, unionists agreed to a system in which English students studying here have to pay the higher, non NI fees).

The student fees debate was yet another sphere in which Stormont proved itself incapable of taking difficult decisions, or defending nuanced financial arguments. Student fees were seen as a bad thing, and every effort was made to minimise them, as if this was a progressive cause. The idea that Northern Ireland was merely perpetuating an injustice in which low paid workers help fund the education of people who would become far wealthier than them was largely ignored.

There was much talk about students getting into hopeless levels of debt, but this is not possible under the very fair UK student loan system. No-one has to repay a penny of their debt unless they earn close to the average wage. If they stay on permanent low wages, they never have to pay back the loan.

And for people at, or just above, average income, they only pay interest at the rate of inflation (ie no interest in real terms). So there is no possibility of the debt either penalising those students who fail to get well paid jobs or of the debt spiralling out of control via interest.

As it happens I think the American system is too heavy on fees and loans, and prefer the UK’s more mixed, partly state funded, partly student funded system. But at least in America there is debate about the idea that it might be appropriate for people who are studying for qualifications that will boost their income to show some personal responsibility and help fund something that will benefit them personally.

In NI, such an elementary concept is barely discussed.

Ben Lowry (@BenLowry2) is News Letter editor

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