A report by Andrew McGettigan, for the Intergenerational Foundation, calculates that the government scheme to allow universities to charge £9,000 tuition fees could push public sector debt up by £100 billion over the next 20 years. The government itself forecasts that student loan debt will peak at £50 billion in 2030.
The study warns, “the cost of government borrowing adds significantly to the national debt in the short and medium term.” Students at England’s universities will be able to take out government-backed loans covering the higher fees, as teaching grants are slashed from 2012.
The Office for Budget Responsibility estimates the loans will cost £12 billion a year by 2015-16. This is an increase of £5 to £6 billion a year and “eclipses”the £3 billion saved by the cuts to the teaching grant. So the policy of higher student loans costs twice what is saved by cutting the grant. The report also claims that the government is ‘secretly investigating’ selling off student loan liabilities.
General Secretary of the University and College Union Sally Hunt said the report confirmed that the government’s punitive cuts had nothing to do with reducing the national debt and everything to do with shifting the funding of higher education from the state to the individual. She said, “Instead of being guided by ideology and adding billions to the national debt ministers should follow the example of other countries and invest in higher education.” ■