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More Debt, More Repayments in the UK?

VU International News and Reviews No. 95 July 12 2017

July 2017

The Institute for Fiscal Studies in London has published a 42 pages “briefing note” on Higher Education funding in England: past, present and options for the future. It shows that the reforms in 1998, 2006, and 2012 have increase overall spending on Higher Education, shifting significantly from grants to loans. For the national financial system, a key factor is that loans do not count towards the national deficit, while grants do. As the graduates´ repayment depends on their earnings – the debts are forfeited after 30 years – the total taxpayers’ burden is more uncertain than before. The last concluding remark in the report’s summary will be music in the Universities’ ears: “Cutting fees while protecting university funding would increase the deficit and the long-run taxpayer contribution, but would also increase flexibility.”

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