The Metropolis

The Conservatives’ Epic £1 Billion Tuition Fail

Chuck Ansbacher | Friday 1 April, 2011 16:49

Imagine for a moment that you own a business. Too far fetched? OK. Instead try to imagine that you own a sandwich. The quality of this sandwich is of little consequence. It could be Kobe beef on gold bullion sourdough; it could be celery and mayo on toast. Now imagine you want to sell this sandwich. The only problem is that no matter how delicious the sandwich is, you are forced by law to only sell it for a certain amount — let’s say that amount is £3.20. That’s a pretty good deal for a delicious sandwich! You could probably get lots more for it. And even if your sandwich isn’t that great, if you’re the only person selling sandwiches in town, you could conceivably charge more for it.

Then try to imagine this: All of a sudden, you’re allowed to charge almost three times as much for your sandwich — a full £9.00! You don’t have to charge that much, but nobody is stopping you. Do you… think you would??

If you answered yes, you answered like almost every university in the country.

If you answered no, not only are you apparently anti-money, but your thinking also very closely resembles that of the Conservatives running this country. That is to say, it is flawed.

Earlier this year, the government authorised a rise in tuition fees at all UK universities — a very sizeable increase from £3,200 to £9,000. This move, of course, was advertised as an austere measure. Here’s Nick Clegg on the issue.

At the time I really thought we could do it [not increase tuition fees]. I just didn’t know, of course, before we came into government, quite what the state of the finances were [sic].

And while this increase will obviously enable these schools to make more money, it also means the government will be on the hook for substantially more in student lending.

The Conservatives, savvy businessmen that they are, weirdly didn’t expect every university to dive head first into this new ability to make more money. They thought the most elite of the bunch would take the bait, and the rest (the celery and mayo on toast, if you will) would stay with their lower rates. But what do you know, not the case. And since, generously, this increase was mitigated by the fact that student loans are only payable after graduation, and only after your salary reaches a certain threshold, the government will actually wind up being on the hook for an estimated £1 billion that it won’t be collecting for years — the exact opposite of how this austerity thing is supposed to work!

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