There is a shift over time from those repaying to those who have repaid as we might expect. The cohort data shows, a relatively rapid increase in the number repaying within a cohort over the first few years of potential repayment followed by much less variation and a gradual decline in numbers as more repay their loans in full. The average value of repayments continues to increase in each year and hence totals also increase. This suggests that it is only in the first few years after leaving higher education that large numbers of borrowers start repaying. Relatively few only start earning above the repayment threshold three, four, or more years later and even then their numbers are balanced by those who stop repaying for one reason or another. It may be some time before any longer term patterns become clear, particularly shifts from non-payment to payment.
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Provisions on deferring school entry are in place for the children who would be at the younger end of their school year, and whose parents believe it would be better for their entry into school to be deferred to the following year from their ‘normal’ entry year group. Parents whose children are born between September and December may request a deferral; parents whose children are born in January or February will have their requests automatically approved.
[…[ Our priorities for reform in this area are better regulation, autonomy and cost-effectiveness while maintaining and improving our focus on public protection. We intend to consult on how these priorities can be taken forward, taking account of the Law Commissions’ work on simplification and consistency and building on the Professional Standards Authority for Health and Social Care’s paper “Rethinking regulation” published in August 2015. We will present proposals that give the regulators the flexibility they need to respond to new challenges in the future without the need for further primary legislation.
The cap on fees in England was increased to £9,000 for new undergraduate students in 2012. The average headline fee in the first year of the new system was around £8,400. It has increased each year since then, despite the cap remaining at £9,000, to just under £8,900 in 2016/17. More detail on the debate around the 2012 changes, variations in fees and impacts of higher fees are given in the notes listed below with a specific 2012 focus. In 2015 the Government announced that the cap would be increased for universities with a successful performance under the Teaching Excellence Framework (TEF). The cap will be increased annually by inflation from 2017-18 for institutions that meet the TEF standards. The 2017-18 cap is £9,250 for institutions and the average headline fee is expected to increase to £9,100.
The sale of the final tranche of mortgage style loans in November 2013 meant that all publicly owned debt at the end of 2013-14 was in income-contingent loans. These are financial year data so only include part of academic year 2012/13 when new students could take out much larger fee loans. Despite this just over one-third of tuition fee loans made in 2012-13 were to post-2012 students. The Government has projected that the outstanding cash value of publicly owned student debt in England will increase to around £500 billion in the mid-2030s and £1,000 billion (£1 trillion) in the late 2040s. The real (2014-15) value is expected to exceed £100 billion around 2018, £200 billion in the late 2020s and stabilize around £300 billion by the middle of this century. These figures assume that fee increase in line with inflation from 2016 and take no account of loan sell offs. 71 They were made
But the expansion of higher education relies on funding being put onto a sustainable footing. The government must therefore ask graduates to meet more of the cost of their degrees once they are earning. From the 2016-17 academic year, maintenance grants will be replaced with maintenance loans for new students from England, paid back only when their earnings exceed £21,000 a year, saving £2.5 billion by 2020-21. To ensure that the long term costs of the studentloan book remain affordable and transparent, the government will consult on freezing the loan repayment threshold for five years and review the discount rate applied to student loans and other transactions to bring it into line with the government’s long-term cost of borrowing.
UK universities are home to both world-class teaching and life-changing research, and exiting the EU will not change this. The Government has already announced that EU students applying for a place at an English university or further education institution in 2017/2018 (or before) will continue to be eligible for student loans and grants for the duration of their course, even if the UK exits the EU during that period. To support research and innovation, we have also announced that HM Treasury will underwrite funding for approved Horizon 2020 projects applied for before the UK leaves the EU, including where specific projects continue beyond the UK’s departure.
By way of a summary, the insolvency provisions contained in Part 2 (and Schedules 3 and 4) were considered in detail during the sixth, seventh and eighth sittings. Opposition amendments were largely probing amendments on how the new special administration regime (SAR) would work in practice. In particular, there was a long debate on clause 22, which sets out the general functions of the education administrator. There was only one division, namely amendment 7 to clause 23. This Opposition amendment sought to ensure that FE bodies with a track record of accruing assets publicly could not be transferred to a private company. Following a lengthy debate the amendment was pressed to a vote and defeated (8 votes to 5). Government amendments, which were minor and technical in nature, were all accepted without debate.
The interest rate issue received more attention in 2017 when it was announced that the rate applied to student loans in 2017/18 would be 6.1% - this was a large increase from the 2016/17 level of 4.6%. A report by the Institute for Fiscal Studies, Higher Education funding in England: past, present and options for the future July 2017 stated that under the 2012 system students from the poorest 40% of families would accrue around £6,500 in interest during study. The report also said that the interest rate had virtually no impact on the repayments of the lowest earning graduates because very few would earn enough to repay the interest accrued. The interest rate would however have a significant impact on top earners.
The number of starts on apprenticeship standards increased by over 60,000 between 2016/17 and 2017/18, while the number of framework starts fell by almost 260,000. 25% of apprenticeship starts were on standards in 2017/18, up from just 2% in 2016/17. 83% of all starts were in four subject areas: Business, Administration and Law; Health, Public Services and Care; Engineering and Manufacturing Technologies and Retail & Commercial Enterprise.
UCAS breaks down some of its group entry rates by the ‘tariff’ level of different universities. There are three tariff groups; high, medium and low and these refer to average grades of students admitted. High tariff institutions where entrants have higher grades are generally considered more prestigious and harder to get into. This type of analysis therefore can shed light on a different aspect of widening participation. In 2018 only 2.7% of 18 year olds from England who were eligible for FSM at school got into one of these high tariff universities. The rate has increased over time from less than 1.5% in the period 2006 to 2010, but was still well below the 10.0% for the non-FSM group. The size of the relative gap has fallen over time; in 2006 the non-FSM group were almost six time as likely to go to a high tariff university and this fell to below four times as likely in 2015 onwards. However, the absolute gap has increased in recent years from six percentage points in 2012 to more than seven points in 2016, 2017 and 2018.
UCAS breaks down some of its group entry rates by the ‘tariff’ level of different universities. There are three tariff groups; high, medium and low and these refer to average grades of students admitted. High tariff institutions where entrants have higher grades are generally considered more prestigious and harder to get into. This type of analysis therefore can shed light on a different aspect of widening participation. In 2016 only 2.5% of 18 year olds from England who were eligible for FSM at school got into one of these high tariff universities. The rate has increased over time from less than 1.5% in the period 2006 to 2010, but was still well below the 9.5% for the non-FSM group. The size of the relative gap has fallen over time; in 2006 the non-FSM group were almost six time as likely to go to a high tariff university and this fell to below four times as likely in 2016. However, the absolute gap has increased in recent years from six percentage points in 2012 to seven points in 2016.
This year’s GCSE league tables will be changed in the most radical way since they were first introduced a quarter of a century ago. Two new headline measures –Progress 8 and Attainment 8 -will be introduced to encourage schools to focus on an ‘academic core’ of subjects and count every increase in every grade for all pupils. As noted in section 2, above, progress 8 will also be used to judge whether schools fall below the ‘floor’ target or are classed as ‘coasting’; both of which have important implications for schools.
The IFS identifies two main drivers of the expected increase in children in relative low income. Firstly, forecast real earnings growth (especially over the second half of the period) benefits poorer households less than it does middle-income households, since poorer households receive a smaller share of their income from earnings and a larger share from benefits. Secondly, the working-age benefits freeze (from 2016/17 to 2019/20), along with the roll-out of Universal Credit and phased introduction of the two-child limit for tax credits, represent a “substantial cut” in the real incomes of these households.
ESI funding activities can be broken down into the sectors they target which fit within the broad priorities of the MFF (see section 1.1). Figure 8 reveals the total funding for each sector and how this breaks down among the individual funds. Over the 2014-2020 period, the largest share of ESI funding (€2.5 billion, 15% of total funding) was allocated to enhancing the competitiveness of small and medium enterprises (SMEs). Around €2 billion of this was allocated from the EDRF with the remainder from the EAFRD and EMFF. The second largest allocation was for sustainable and quality employment (€2.3 billion, 14%), with €1.6 billion coming from the ESF.
The overall funding level for the sector in academic year 2012/13 was set by the funding council at £5.3 billion which was £1.2 billion (19%) less than in 2011/12. Further cuts of 16% and 14% followed in 2013/14 and 2014/15 as the 2012 reforms applied to increasing numbers of the student population. This is driven by reductions in teaching grant which fell by smaller amounts in each of the next four years. Overall capital and other non-recurrent funding has not been directly affected by these reforms. 2018/19 funding for teaching will be 70% lower than in 2011/12 in cash terms (73% in real terms) despite the increase in student numbers supported by this funding.
The number and percentage of people in absolute low income depends on how you adjust for inflation. The official poverty statistics presented in the HBAI report for 2016/17 use an absolute low income threshold uprated based on the Consumer Prices Index (CPI) measure of inflation. Editions of HBAI before 2014/15 used the Retail Prices Index (RPI) measure, which tends to show a higher rate of inflation than the CPI. This affected the estimated number and proportion of people counted as being in absolute low income. Annex 4 of the HBAI Quality and Methodology Information Report for 2014/15 compares the trend in absolute low income under both CPI and RPI.
R&D investment has risen steadily over the past few decades, from £17.8 billion in 1981 to the current total of £33.1 billion (in 2016 prices). This is a real terms increase of 86%. But as a proportion of GDP, R&D expenditure has fallen over this period (it was the equivalent of 2.0% of GDP in 1981).
An additional concern with the introduction of the government’s illustrative example is the high marginal tax rate that individuals would face under the new system. Since repayments on the postgraduate loan would be made “concurrently” with undergraduate repayments, individuals earning between the lower loan repayment threshold (of £21,000 in 2016 prices) and the higher income tax-rate threshold would face marginal tax and employee NICs rates of 50%, while those earning above the higher rate tax threshold would face marginal rates of 60%. This could potentially affect the labour supply decisions of young postgraduates and hence may have wider consequences for growth and productivity. 29