Critical Education | Public Interest Higher Education Journalism with a focus on finance
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This website is used for investigative work, much of which was picked up subsequently by mainstream and industry press. Much of its content has been devoted to student loans, the 'RAB charge' and private HE providers.
Critical Education | Public Interest Higher Education Journalism with a focus on finance
2y ago
I have seen some confusions recently on twitter regarding university finances. Here are four recommendations:
Avoid using sector aggregate figures to make your arguments
The sector is very uneven both in terms of size of institutions and in financial performance, make sure you are familiar with your institution and how it fits into the sector.
Avoid using figures for “reserves” when you mean cashIn accounting terms, “reserves” does not mean cash. Cash is included in reserves but that is because reserves names the excess of assets over liabilities: that the institution owns more than it owes ..read more
Critical Education | Public Interest Higher Education Journalism with a focus on finance
2y ago
A short article for History UK on recent changes to student loan repayment terms and what happens as inflation continues to erode the value of the undergraduate tuition fee ..read more
Critical Education | Public Interest Higher Education Journalism with a focus on finance
2y ago
With the Comprehensive Spending Review due next Wednesday, I thought it might be worth making some general points about student loans (in anticipation of potential changes to repayment thresholds and other parameters).
I do not think student loans are a good vehicle for redistributive measures.
As I told a couple of parliamentary committees in 2017, the current redistributive aspects are an accidental function of the decision to lower the financial reporting discount rate for student loans from RPI plus 2.2 percent to RPI plus 0.7. Such a downwards revision elevates the value of future cash re ..read more
Critical Education | Public Interest Higher Education Journalism with a focus on finance
2y ago
Why that title?
Well, the name seems to mislead people into thinking that the provider of student finance is a private institution, potentially making profit out of students, when it is in fact publicly owned.
There are 20 shares in the SLC: 17 are owned by the Department for Education (which has responsibility for English-domiciled students) and another three, each of those owned by one of the devolved administrations.
When you want to see what’s going on with student loans you look at government accounts: national, departmental or those of devolved administrations.
OK. So what’s the point of ..read more
Critical Education | Public Interest Higher Education Journalism with a focus on finance
2y ago
David Watson once wrote that the answer to the question as to whether universities were in the private or the public sector was “yes”.
He suggested that universities most resembled BAE Systems: a private company with a host of public contracts. Back in 2011, the Coalition white paper on HE opened by trumpeting “Higher education is a successful public-private partnership: Government funding and institutional autonomy.”
It was always the aim of second round of public sector reform (“Privatisation 2.0”) to create an education market that could be regulated like public utilities in the UK. And so ..read more
Critical Education | Public Interest Higher Education Journalism with a focus on finance
3y ago
Economic & Fiscal Outlook, Office for Budgetary Responsibility (March 2021), adapted from Tables 3.14 & 3.26
I have constructed the table above from forecasts for Total Managed Expenditure and Financial Transactions taken from the Office for Budgetary Responsibility’s latest publication (it accompanied Wednesday’s Budget).
It shows how newly issued student loans are now split into two components for the purposes of presentation in the National Accounts. The portion of loans that are expected to be repaid are classed as “financial transactions”, while the portion expected to be written ..read more
Critical Education | Public Interest Higher Education Journalism with a focus on finance
3y ago
Last week’s Supplementary Estimates contained another note of interest for student loans.
Under “Note K: Contingent Liabilities” (p. 90) we find that a fifth contingent liability has been added to those associated with the now abandoned sale of student loans.
The sale of student loans necessitated warranties and indemnities to secure interest and obtain value
for money from investors. These contingent liabilities are in respect of:
…
e) New EU Securitisation Regulations (Possible CL [contingent liability] in due course). UKGI [UK Government and Investment] are seeking legal counsel to review ..read more
Critical Education | Public Interest Higher Education Journalism with a focus on finance
3y ago
The UK government published its “supplementary estimates” for 2020/21 yesterday. These allocate additional budgetary resources to departments.
Education has been given an extra £13.531 billion to cover the estimated losses on student loans issued in the year (April 2020-March 2021) and the likely downwards revisions to the value of already existing loans. The department had an original allowance of roughly £4billion, but was determined by the last comprehensive spending review and had not been revised since Theresa May’s decision to increase the loan repayment threshold in 2017.
Last year, an ..read more
Critical Education | Public Interest Higher Education Journalism with a focus on finance
3y ago
Page 221 of the Department for Education’s 2019/20 financial statement contains the note reproduced above.
The sale programme for “pre-2012” student loans was cancelled in March. But DfE looks like it will be paying out over £30million per year for the next few years to financiers anyway. Total liabilities are booked above at over £220million ..read more
Critical Education | Public Interest Higher Education Journalism with a focus on finance
3y ago
Given the relative absence of higher education from yesterday’s Autumn Statement, I turned my attention to the Department for Education’s 2019/20 annual accounts, which were published earlier this month.
Regarding student loans, we have been in something of a hiatus since 2018, when Theresa May announced an review of post-18 funding and commissioned the Augar panel, which reported last summer. Although there were suggestions that we might get a long overdue response to the latter yesterday, we will probably have to wait now until the Budget next March, when the government will hope to have a b ..read more