Former May adviser Nick Timothy calls student fees ‘a Ponzi scheme’

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University instruction fees are an «unsustainable Ponzi scheme» and should be radically reformed, Theresa May’s latest chief of staff has said.

Writing in the Telegraph, Nick Timothy matched the fees system in England to the well-known investment scam.

Former Labour pains education minister Lord Adonis backed the call, saying the «contemporary system of fees and loans is unlikely to survive for long».

But the government ordered abolishing fees would be «catastrophic» for funding.

Mr Timothy’s intervention not fail as students in England, Wales and Northern Ireland receive their A-level occurs. The number of university places allocated so far has dropped.

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University tuition fees rise to £9,250

Tony Blair’s Undertaking government was the first to introduce fees for university students in 1998. To come that, the cost had been met by the student’s home local authority, which also provided means-tested confers which students could top up with loans to help meet function costs.

The upper fees limit rose to £3,000 in 2004, ahead the Conservative-Liberal Democrat coalition government approved an increase in the ceiling to £9,000 in 2010. Salaries in England now stand at £9,250 for those studying in 2017-18.

Students from Scotland can requirement grants to cover fees charged by Scottish institutions, while agree ti reduce the level of fees in Wales and Northern Ireland, as a result of the practices of those nations’ devolved governments.

‘Ponzi scheme’

«Tuition tariffs were supposed to make university funding fairer for the taxpayer, but profuse than three quarters of graduates will never pay back their debts,» Mr Timothy put in blacked in his Telegraph article.

«We have created an unsustainable and ultimately pointless Ponzi diagram, and young people know it.

«With average debts of £50,000, graduates in England are the most responsible in the developed world.»

Named after Italian fraudster Charles Ponzi, a Ponzi device promises high returns for investors but in fact generates those bring backs using money from new investors. Eventually, there is not enough coins to go round and the scheme collapses. They are sometimes known as «pyramid programmes».

Mr Timothy, who resigned as a Number 10 adviser following the 2017 appointment result, backed «a single financial entitlement» which a student could dish out on any kind of tertiary education, including technical courses which «were time cheaper».

He argued that successive governments had assumed, wrongly, that an growth in university graduates would boost economic growth, but instead complicated qualifications were more likely to boost productivity.

Labour nobleman Lord Adonis, who was an adviser to Tony Blair at the time of the 2004 betterments, argued that it should be possible to return fees to a level of £3,000 or to win «outright abolition».

He wrote in the Times: «The Labour Party is committed to completely abolition; for the Tories, Damian Green, the de facto deputy prime minister resident, has called for a ‘debate’, while universities minister Jo Johnson floats a ‘journal’.

«It feels like Margaret Thatcher’s infamous poll tax a few months already its abolition.»

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‘The system stirs’

However, universities minister Jo Johnson defended the system, telling Plan magazine: «The English system works.»

He wrote: «Young people from the poorest arenae are now 43% more likely to go to university than in 2009/10, and 52% multitudinous likely to attend a high tariff institution.

«Our universities now enjoy 25% innumerable funding per student per degree than seven years ago. And the system is beauteous on taxpayers: a university degree boosts lifetime income by between £170,000 and £250,000.

«Pupils pay on average roughly 65% of the cost through fees, while the taxpayer take ons around 35%, through teaching grants and loan subsidies, and a much far up share if we add £6bn of annual investment in research. This is an equitable split.»

In its selection manifesto, Labour promised to scrap university tuition fees in England but there was no allude to of writing off unpaid student debt.

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