Edition 95 - March 2009

UK: losses for un-paid fee debts and vice-chancellors’ dream

The UK media have reported lately on difficulties faced by the Student Loans Company to collect repayments of student loans from EU students – or rather, by all those UK and EU students who have left the UK after graduation. According to the tuition fee system in force since 2004, UK and EU students get a government loan for their tuition fees, and need to start paying it back only after reaching a minimum annual income of GBP 15 000. For those graduates working in the UK the repayment is directly recovered through the tax system, but graduates living abroad are expected to make their own arrangements regarding payment of the fee-related student loan. Unsurprisingly, several students have not been proactive in contacting the loans company, which has struggled to reach several of its debtors living on the continent. Almost 60 percent of all those due to start repayments in 2007 did not do so, and in 2008 the proportion of non-payers rose to 70 percent. The loans for both years amounted to almost GBP 4 million, causing therefore a significant cost to the system, and rising doubts of its practicability.

In parallel, a wide majority of UK vice-chancellors have expressed a need to raise UK/EU tuition fees from the present maximum of GBP 3 500 to a maximum between GBP 4 000 and GBP 20 000/year depending on institution and programme. Indeed, more than half of the university heads would like to charge at least GBP 5 000/year, and ten percent would like to leave deciding on fee entirely up to the institutions. Even though backed by evidence that fees have not deterred poorer students from attending university, the National Union of Students is in rage for the proposal, pointing out how higher fees would increase the student debt load significantly, and how inappropriate such a move would be in times of global economic crisis.

(back to newsletter)