Most of the times, in order for us to increase households economy we need to pursue education into tertiary education . For instance into a university. Getting a Bachelor degree and then finding the best employment opportunity on the market. It seems pretty much easy strategically. The truth is, it is hard nowadays for millenia.
Too much competition!
Millenia todays need to get exceptionally well result to get into the best school. Regardless engineering or business school. As the thing is getting harder for millenia, the same thing can be said for higher institution too. They find it hard to keep their finance afloat!
Most of universities are rushing to build great facilities to attract students enrollment into their programme. This has put a lot of strain on universities’s finances. They are reportedly  receiving twice as much money per student as the did two decades ago! Britain’s 130 ish universities currently owe nearly £ 12 billion. An increment of £ 7 billion from the money they owe in 2012, according to estimates collated by Reuters.
Universities are facing bankruptcy
Accroding to data from 2016 to 2017 (the most recent year for which data are available), 19 universities ran deficits. Compared with 6 the year before. Few of them are facing bankruptcy in the near future. The driver for this causes is due to competition for students! To make it sustainable, universities are allowed to overcharge students at £ 9,000 per year and paying for their loans due in the mean time. On top of that, financiers always used to advise them that their balance sheets were very conservative!
As a student, how do you judge that particular university is good for you other than indicator such as teaching excellence framework, TEF ? Well of course you tend to look at external factors. For example, universities facilities. It is really hard to compare apple to apple on the course content anyway. Since then higher education has become market driven and increasingly competitive to enter.
Since the financial crisis, bank lending has dried up. So universities have turned their attention to capital markets. They have taken advantage of low interest rates by issuing public bonds and raising £ 250 -750 million each. Meanwhile, less prestigious universities have looked to private investors, such as insurers and pension funds. To deal with shorter maturities. What about lowest ranked universities? They are struggle to find any lenders. It is also they who are running the biggest deficits.
Theresa May has spoken
According to her, there are several issues to be highlighted. Among them are:
- Tuition fees are very high and that many graduates do not get a good ROI.
- More courses that do not provide value for money and vast numbers of graduates ending up in non-graduate jobs.
- Level of fees charged does not relate to the cost or quality of the course
- Funding system which leaves students from the lowest income households bearing the highest levels of debt, with many graduates left questioning the return they get for their investment
- Tuition fees should be based partly on how much a course helps a student’s career.
- It was right that students who benefit from their degree should contribute to the cost
- Subsidised to keep costs under control
- Doing the degree that they actually want, that will really unlock their potential and future.
- Students would not start paying back their loans until they started earning £ 25,000 per annum. Up from £ 21,000 currently.
- Around 2/3 of students will never pay back their debt. The current system means loans are written off entirely after 30 years.
- By virtue of the fact students pay fees for their education they have consumer rights.