Tuition Fees

Alex Sobel Excerpts

Wednesday 19th July 2017 Commons Chamber

[Alex Sobel (Leeds North West) (Lab/Co-op)]

I congratulate my hon. Friends the Members for Blaydon (Liz Twist), for Bury North (James Frith), for Hartlepool (Mike Hill) and for Manchester, Gorton (Afzal Khan) on making excellent maiden speeches today. I came into the House with them and I am sure that we will carry on our journey together to help transform this country.

I have been waiting for 20 years to make a speech in a debate on higher education funding and tuition fees—ever since 23 July 1997, when Ron Dearing published his report and I was an executive officer at Leeds University union. In the past three months, I have spoken to hundreds of students from the University of Leeds and Leeds Beckett University. Since Parliament dissolved, they were not aware that their fees were rising to £9,250 from £9,000. The fact was not made clear to them at all. The Government seem to have created a tuition fee rise escalator. In other areas, they are abandoning such escalators, but not for tuition fees. Fees are expected to hit £10,000 by 2020. I wonder how many students are aware of that.

The teaching excellence framework adds an additional element, starting an Olympic-style race with gold, silver and bronze medals awarded for quality. Future increases will be linked to the rostrum, creating a new hierarchy in higher education whereby gold medal-winning universities will be able to place their fees ever higher.

The Institute for Fiscal Studies has shown that the average student now graduates with more than £50,000 of debt. The replacement of maintenance grants with loans also means that the poorest students are worst hit, whereas the richest 30% of households would have lower borrowings, at “only” £43,000. The poorest are hit hardest, the richest are hit the least and the middle are hit in the middle. Is that the sort of system we are trying to create? How much further does debt need to rise before the Government stop the debt spiral they created in 2012?

Graduates have raised the issue of loans with me consistently over the last period and before I was a Member of Parliament, because students currently repay loans at a rate of 9% of their earnings over £21,000. The repayment threshold was due to rise in line with earnings, but in 2015, after the previous general election, the Conservative Government froze the threshold until at least 2021. We are now seeing inflation rising but the repayment threshold staying the same, which is creating a real-terms increase in the payments. In addition, people have to deal with the high interest rate. We are talking about mortgage-style debt—this is not a short-term loan—but the Government are treating it like Wonga. Students are having to pay 3% above RPI; this is currently 4.6%, but in September, when the new academic year starts, it will go up to 6.1%. Why are students being lent money without fully knowing the terms that they will be repaying? Why are they totally at the whim of the economic climate and of the Government? A further irony is that graduates who earn more pay their loans back more quickly and incur less debt than those on lower incomes, who have to wait longer to repay their loans and are continually having to pay back interest.

So we have a quadruple whammy of rising fees, real-terms cuts in the threshold for when graduates have to pay back, rising interest rates and larger debt for lower-earning graduates. Has not the worst of all worlds been created? Students know that no aspect of this system is fit for purpose, and the general election showed just that, with many new hon. Members, some of whom spoke today and made maiden speeches, now representing university and student-heavy seats because students have lost trust in the Government. They know that the only party that will fix this broken system is the Labour party, with the action on both fees and loans outlined by my hon. Friend the Member for Ashton-under-Lyne (Angela Rayner).