Nick Barr, Professor of public economics at the LSE speaking at a recent seminar on the university funding system, thinks they should. Why? Well Nick reckons the blanket interest rate subsidy (i.e. having an interest

rate at the level of inflation rather than the cost of borrowing) costs the tax payer £1.2 billion and only benefits successful professionals in mid career. The argument is to save this money and spend it on ‘increasing access’ for poorer students.

Of course, the problem with this redistributive measure is its impact on student debt, an already touchy subject politically. So far student recruitment has not been adversely affected by introducing tuition fees, so there is reason to believe that ending the subsidy would similarly just be taken on the chin by the student body. So watch out folks … there maybe more pain to come for the ever suffering university student!

This entry was posted on Tuesday, February 27th, 2007 at 7:52 pm and is filed under General Articles. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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