Around and about half of student loans are never repaid, meaning that the taxpayer – you and me – picks up the bill. This isn’t a sensible manner of funding the universities but it is the one we’ve got. A justification is offered for this.
First though, some degrees have very much lower repayment rates than others:[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””] Degrees in “creative arts” subjects – which includes Music, Drama, Fine Art and Design Studies – are the most costly to the taxpayer since so few alumni earn enough money to pay back their student loan in full. Of the £9 billion that the government spends on higher education each year, more than £1 billion is on creative arts courses alone, where three-quarters of the total amount dished out in loans is picked up by the taxpayer. Economics degrees are the least costly to the public purse, with each one costing an average of £11,000 to the taxpayer, with just a quarter of the loans written off. [/perfectpullquote]
Undoubtedly if we looked at grievance studies – sociology and moving left from there – we’d find even worse repayment rates.
Which is where part of our problem is. The aim of having students pay the costs of their education was so that students would choose something that it was worth their being educated in. Make them spend their own money – even if borrowed – on themselves and we should gain better decision making. A big break on repayment for bad decisions doesn’t quite do that. We might suggest lowering the repayment limit to the minimum wage to change that.
But here’s the justification on offer:[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””]Chris Skidmore, the universities minister, said he believed universities were a good investment for tax payer. Speaking at the Festival of Higher Education at Buckingham University he said: “Ultimately it is good value for money. Look at what international students are willing to pay – far more for their degree in the UK – because they know they are getting world class education.[/perfectpullquote]
Ah, but how many of those foreigners are paying for arts degrees and grievance studies? Whatever the difference is between their choices and those of the indigenes – I’ll bet heavily that it’s substantial – is exactly the misallocation of resources caused by the luvvies and whiners not having to pay the cost of their own educations.
That allocation of students to courses revealed by the foreigners having to carry full freight themselves is exactly what reveals to us what the correct mixture of courses should be.