Student fears could torpedo top-up fees

26 Jun 03
The success of the government's plans to introduce university top-up fees 'depends crucially' on ministers combating potential students' fear of spiralling debts, experts have warned.

27 June 2003

The success of the government's plans to introduce university top-up fees 'depends crucially' on ministers combating potential students' fear of spiralling debts, experts have warned.

A study by the Institute for Fiscal Studies has shown that the government's plans to pump more money into higher education could be more socially progressive than those put forward by the Conservative Party.

But the IFS says Labour's proposals, which are intended to fund the expansion of higher education to widen access and boost the participation rate to 50%, could be counterproductive if they fail to convince students that they are investing in their futures.

Amid much opposition from their own backbench MPs, ministers intend to allow universities to levy an extra £3,000 in fees from 2006 on top of the existing £1,100 upfront fee, increasing the loans students can take out to cover the extra cost.

The Conservatives say they would keep the participation rate at the current 43% level and abolish all fees. Both parties would require students to take out maintenance loans.

IFS research economist Greg Kaplan said the government's plans to ask graduates to fund their education rather than the taxpayer, as would happen under the Tories, seemed 'fairer and more efficient'.

But he added: 'The success of the white paper proposals depends crucially on whether the government can persuade young people that taking on bigger loans should not deter them from entering higher education.'

The study found the costs of the parties' plans would be broadly the same: £1.8bn for the government and £1.7bn for the Tories.

In the Commons, more than 100 backbenchers declined to support the government and abstained in the vote on a Liberal Democrat motion opposing the introduction of fees, while a further ten Labour MPs voted against.

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