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Suggestions of the Browne Report (and the Government’s proposals )

Suggestions of the Browne Report (and the Government’s proposals ). Increase in fees – to £6,000, (or more, with a “levy” of 45 -75%) £6,000, “exceptionally” to £9,000 (no “levy”?)

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Suggestions of the Browne Report (and the Government’s proposals )

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  1. Suggestions of the Browne Report (and the Government’s proposals) Increase in fees – to £6,000, (or more, with a “levy” of 45 -75%) £6,000, “exceptionally” to £9,000 (no “levy”?) Loss of HEFCE grant for band C – D subjects, and parallel reduction in bands A and B [so all courses can cost the same] Something pretty like that…. Universities will need to charge £7,000 to break even Something like that…. 10% INCREASE in student numbers (i.e. from 45% to 50%) Student loans to increase to £3750, plus up to £3250 grant Loans £3575 - £5,500 depending on parental income Grants falling from £3250 to 0 depending on parental income.

  2. Suggestions of the Browne Report (and the Government’s proposals) Repayments of 9% of salary above £21,000, rising with inflation. Agreed Interest rate 2.2% above RPI RPI rising to 3% above RPI at income of £41,000 Government to pick up unpaid interest above RPI Above proposal essentially does that – but not for big debts? Debt paid off by government after 30 years Agreed

  3. My Assumptions Government achieves and sustains goal of 2% inflation Interest of 2 + 3 = 5% Minimal debt: £6000 fees + £4,000 living costs x 3 years =£30,000 No Uni loss: £7000 fees + £5,500 living costs x 3 years =£37,500 Russell Group: £9000 fees + £5,500 living costs x 3 years =£43,500 Medicine (5y): £9000 fees + £5,500 living costs x 5 years =£72,500 Medicine (6y): £9000 fees + £5,500 living costs x 6 years =£87,500

  4. My Calculations The “breakeven” salary is the salary at which your repayments would keep up with the interest - so you aren’t costing the taxpayer extra.

  5. Relationship to Salaries Salary data from National Institute of Statistics: 2007-8 salaries. Black lines show income to be able to repay interest (only) Red line shows ability to repay over 30 years. Assuming all students go straight to top salaries, less than 50% will be able to keep up even with the interest payments on their debt!

  6. Surely MEDICINE Will Pay? My calculations: £61k / 69k to service interest for 5/6 yr course £73k / 84k to repay over 30 years Medical Salaries FY1 £22,412 FY2 £27,798 Specialist in Training £29,705 - £45k depending on rota “Specialist” £36,807 – 70,126 Consultant £74,500 - £176,242 GP (PCT employed) £53,781 – 81,158 (Data from NHS careers web page) So medics won’t be able to keep up with the interest until they are consultants, and (since it takes 8-10 years to get there) probably won’t ever be able to pay off the whole debt.

  7. Summary Most students won’t even be able to pay the interest on their debt Very few will ever pay it all back Meanwhile students will pay an extra 0 – 9p income tax, and have a big debt. Implications for mortgages, etc? Perversely, gives them an incentive to go to the best/most expensive uni – it won’t cost them any more! Government will have to pick up interest, and ultimately, cost of fees, and pay for them through general taxation. Why not just pay up front, and save the extra interest payments?

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