In the Autumn Statement last week the Chancellor, George Osborne, announced a plan to lift the cap on the numbers of students English universities can admit in 2015. He said that next year universities would be able to admit an extra 30,000 students, with the cap being lifted the following year. He told the House of Commons: “Next year we will provide 30,000 more student places – and the year after we will abolish the cap on student numbers altogether.
Photo: City AM
“The new loans will be financed by selling the old student loan book, allowing thousands more to achieve their potential.”
The student loan book containing loans taken out between 1990 and 1998 was sold in November. It involved £890 million student loans being sold a debt purchase firm for £160m.
Addressing the House of Commons, the Chancellor also revealed that the employer National Insurance contribution is to be scrapped for young people under the age of 21 years old. The decision will affect 1.5 million jobs in the UK, meaning that young people will not be able to pay into a state pension until they are 21. The Government will also increase the age at which the state pension becomes available. Under the plans those now currently in their 20s will not be able to receive a state pension until the age of 70.
The National Union of Students (NUS) has expressed concern over the way that the Government will fund these extra university places. Rachel Wenstone, vice-president (higher education), said: “It’s encouraging that the Government’s u-turn on its student number controls policy means that more university places look set to be made available as a result…
“The fact that the Chancellor is claiming that his uncapped places policy will be funded by yet another fire sale of the student loan book should be ringing alarm bells. Using the sale of public assets to fund this project is a short term fix because the current student loans system is completely unsustainable and this selling of public assets is stacking up problems for the next generation.
“The simple fact is that it will see the public money subsidising a private company to make a profit from the sale of public assets, which is incredibly problematic in itself. Forcing debt onto students as a way of paying for universities is an experiment that has been proven not to work and we need to see serious thought about moving the system away from this unsustainable funding burden.”