Political

Tuition fees report: time for a partial reverse ferret

When I blogged this morning about the Higher Education Policy Institute’s report into tuition fees, and its claim that the government’s tuition fees policy was in danger of costing more money rather than saving it, I included the caveat that:

Predictions attempting this sort of level of accuracy decades into the future are prone to significant margins of error … Predictions attempting this sort of level of accuracy decades into the future are prone to significant margins of error.

Looking at the report in more detail now, I should have been rather more sceptical of its conclusions as there are additional reasons for doubting them. Both the OECD and IFS (as I have previously blogged) have come to rather different conclusions. The IFS’s estimates say that, “The new system eventually saves the taxpayer around £760 million per year”, for example.

Turning to the details, other questions arise about HEPI’s calculations beyond the point quoted above. In particular, HEPI seems to assume that higher than originally forecast fee levels will result in an equal increase in the amount that students borrow. However, students can decide to take out smaller loans. What proportion of fees will be covered by student borrowing is another uncertain figure, and one where HEPI therefore looks to have been assuming the worst-case scenario. Moreover, both part-time and EU students, who can take out loans, are excluded from HEPI’s key modelling. There are other similar points of important detail.

Calculations of this type inevitably require some simplification and some heroic estimations; the details of the HEPI case means the usual caveats should apply all the more.

 

 

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