Leader: Up fees for rich and help the poor - and do it now

February 1, 2002

MORI's latest opinion poll for Unite has two particularly striking findings - apart, that is, from the astronomical amount a minority of students spends on drink. First, most of today's students prefer loans to grants paid for by a graduate tax - the option canvassed by politicians last autumn. Second, a large minority claims to be able to manage its finances relatively easily: 60 per cent have taken out student loans and one-third have bank overdrafts, one-quarter have neither. The two findings go together: students who are managing to pay their way through higher education without borrowing would not thank a government that imposed extra tax for the rest of their lives - if that is what a "graduate tax" is understood to mean.

Student finance attracts special pleading. Real hardship among poor students is exploited to protect rich families' subsidies. While this continues, there is little chance of solving higher education's problem: underfunded universities, underpaid staff and too few clever people from poor families signing up. The solution is obvious but the politics are scary.

At one end are 100,000 students from private schools. Families that can afford school fees can afford to pay more than £1,075 a year for university. So can the large number of state-school entrants from comfortably off families ( vide the children of Messrs Blair, Straw and others). Nor do these families need subsidised loans. People who find it feasible to service 95 per cent mortgages on houses costing six-figure sums can afford £6,000 of student loan at today's interest rates. Indeed,  making higher education more expensive might help cool overheated house prices.

At the other end, debt is an incubus for poor students and puts off those the government wants to attract. Clever, responsible young people who have grown up in or near the edge of the cash economy of the poor, where the loan sharks lurk, are rightly chary of debt, particularly given higher education's long pay-back time and the job discrimination against such students identified by the National Audit Office ( THES , January 18). These students must have more help. Such bursaries as exist are too few and insultingly small. Tidying them up  will only make that more obvious. The government knows what should be done. It should stop squirming and do it.    

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