With a whistle and a groan, I pass on the following extracts from a Guardian report, Jan 15, 2014, saying that £6 of the higher education budget is now being spent on writing off student loan debts for every £1 that is spent on teaching.

It is a Labour shadow minister who is pointing out the problem and offering to fix it.  But it was a Labour prime minister who caused it.

Tony Blair shared the middle-class belief in the “right” of every young person to spend three years at university and he bought assent to the cancellation of the grants system by inventing a loans system which even the middle class could see how to fiddle –  rather than reforming the system so their kids would have to finish in two years, like the old HND students.


Labour plan to fix student funding by solving loan gap

Former Labour cabinet minister John Denham says university debt write-off costs £6 for every £1 spent on teaching

Plans to revolutionise higher education and halve the cost of student fees are to be proposed by former Labour cabinet minister John Denham, as he warns that “the whole system of university finance for English students is sliding slowly but surely off a cliff”.

Warning that Britain already has the most expensive public higher education system in the world, the former universities secretary under Gordon Brown points out that for every £1 spent on teaching students nearly £6 is spent on student debt cancellation, a growing black hole in the public finances.

He claims this debt cancellation figure is rising, with as many as 50% of this September’s students not expected to repay their loans in full.

He says that, as a result – despite £6.7bn of tax funded spending on higher education – hardly anything is spent directly on teaching students. He points out £4.2bn is spent on debt cancellation, and only £700m is spent on teaching.

Insisting the terms of the debate have to change, he suggests the cost of higher education can be cut by making 30% of courses intensive two-year courses lasting 39 weeks of study a year, and costing 20% less to deliver than a three-year degree.

He also suggests as many as 50,000 courses – 15% of the total – should be funded by employers paying for the training of a member of their workforce.

He says intensive two-year courses would require commitment and a maturity of approach by students, but this would be perfect for somewhat older students with work experience.

He also suggests more students should study from home, saying it is the only realistic way to bridge the gap between the maintenance system and the real costs of studying. He suggests as many as 60% of students would study from home, requiring a cultural challenge for universities.

* Full report at

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