Tuition fee rebates: How SU proposals would make LSE grads pay tens of thousands more in loan repayments

Note: This article was published in Issue #913 as incomplete, this is its full version.

Throughout the pandemic, students have been complaining about the lower quality of education they have received, and one group mobilised for the fee reduction that many supported. Students United Against Fees (SUAF), the national campaign to provide compensation to students who faced a year of online learning with no end in sight, was led by David Gordon, 2020/21 General Secretary of LSESU. In the end, no compensation was given to students. This investigation by The Beaver reveals how the SU lobbied the government with proposals that would potentially result in many LSE graduates paying tens of thousands of pounds more in student loan repayments.

On May 31, The Guardian published an article on proposals by student unions of various UK universities to increase interest rates on student loans by 3% to fund a £2,700 tuition fee rebate. In a letter to Education Secretary Gavin Williamson and Universities Minister Michelle Donelan, the student unions argued that this would ensure the fee rebate would be paid only by the highest-earning graduates, and would be fiscally neutral for the Exchequer. LSESU, along with the SU of the University of Sheffield, based this argument on analysis by economic consultancy firm London Economics, which argued increasing interest rates on loans would only substantially affect male graduates in the top 20% of the income distribution. The analysis suggested these graduates would pay back up to £29,800 more, while female graduates on average wouldn’t be affected as their lifetime earnings are lower. 

The specific impact of this policy on LSE students raises questions about why the SU would spearhead such a proposal. As LSE has the highest-earning graduates out of any UK university, a policy that would increase interest rates would most probably increase the loan payments of many students, more so than at most universities. A student who spoke to The Beaver anonymously has said that this would, in their opinion, amount to a “redistribution [of income] from grads of elite unis to the grads of regular unis.”

Nicholas Barr, Professor of Public Economics at LSE, seems to agree. Professor Barr, who is widely seen as the co-architect of the system of deferred student loan payments introduced in 2006, said that “the idea of trying to make high earning graduates pay lots more than they borrowed… means that LSE students who earn more on average than students from other universities will repay more than their fair share.” 

He also suggests that if a rebate is to be given, the question of who is going to pay for it arises: “If you think that one of the purposes of government is as insurer of last resort … maybe there should be a rebate paid for by the taxpayer”, mirroring concerns by some that this is essentially students directly paying for their own bailout, something that was unparalleled during the pandemic.

Even given the potential impact of this policy on students, campaigns like SUAF are not required to have a democratic mandate. Those that do can get them indirectly through the election of sabbatical officers or through motions in Union General Meetings (UGMs) to advocate for a specific issue. There was no mention of tuition fee rebates in the manifestos of sabbatical officers elected in 2020, nor was there a motion in any UGM that would make tuition fee rebates an official union policy. 

The absence of any such mandate suggests the entire campaign was started with the initiative of the sabbatical officers, David Gordon in particular. Usually, campaigns are approved without a requirement of a democratic vote when they are deemed “non-contentious”. As there was no vote prior to its launch, SUAF must have been judged to fit that description to continue operating. It is the responsibility of the Executive Committee, made up of sabbatical and part-time officers, to decide whether campaigns are contentious and whether they should be given the go-ahead. Minutes from these meetings suggest there was no discussion of whether tuition fee rebates funded through increased interest rates were appropriate. 

The communication by the SU about SUAF also presents a potential mishap. Despite weekly emails from the SU on other matters, the only information distributed about the proposals to increase interest rates was in an article in The Guardian (mentioned earlier). No information was shared about the proposals before the letter was sent, nor was a consultation held.

These proposals can be seen as a U-turn in the SU’s fight for a tuition fee rebate. Through the LSE Fee Strike, the SU had been trying to pressure LSE to lobby the government to give in to student demands. It was made clear in the minutes from Executive Committee meetings that any rebate should be funded by the government. However, with the proposal to increase interest rates, the government would only be funding the rebates in the short term. In the long term, students would themselves be funding it through increased loan payments.

The Beaver reached out to David Gordon for comment, who declined. Josie Stephens, the current General Secretary of the LSESU, said, “SUAF was a cross-university campaign, collaboratively led by ​various elected officers across different students’ unions, not solely the LSESU.” “…campaigns and priorities will mostly come from manifesto commitments, but the mandate allows for other campaigns and priorities to also be taken on during their terms in response to changing circumstances and students’ demands.“


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