Now is the time to invest

March 27, 2014

The news that the government’s loan scheme is likely to be as expensive as the system it replaced because of the amount of student debt that may never be repaid (“New fees regime edges close to cost of old system”, News, 20 March) probably will not surprise many people.

But the response that this may mean a reduction in teaching budgets, and so a cut in support to the children of your editor’s cab driver, will be the wrong response. Such a reduction is likely to increase levels of student dropout, with a consequent increase in unrepayable debt and the entry into what bankers call a “death spiral” in funding.

Investing in some kinds of student support can have a positive return for universities as more students continue their courses and go on to pay more tuition fees. The time to invest, as Warren Buffett says, is in “a down market”.

Ormond Simpson
Visiting fellow, Centre for Distance Education
University of London International Programmes

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