The Department for Business, Innovation & Skills have now answered my Parliamentary Question on the RAB charge on student loans.
PQ No. : 2013/3264
THURSDAY 20 MARCH 2014
Liam Byrne (Birmingham, Hodge Hill): To ask the Secretary of State for Business, Innovation and Skills, what recent estimate he has made of the RAB charge on student loans. (192816)
Rt Hon David Willetts
This Department has been reviewing our modelling of the RAB charge on student loans. We currently estimate the RAB charge on student loans to be around 45%, which reflects our current estimate of the costs to Government of the higher education subsidy to students. By its nature an estimate is subject to change as it is highly dependent on macroeconomic circumstances, and the growth of graduate earnings over the next 30 years.
We will continue to review our estimates in line with the latest data and advice from experts and stakeholders.
And here's my response:
This is fresh evidence that our university finance system is turning into a money pit. The system is now haemorrhaging cash that will never be repaid and reinvested in the next generation. It’s high time David Willetts came out and told us exactly how much this strung together system is costing the taxpayer, rather than dress it up with clever accounting tricks. First, he tells us that the RAB charge is 35%, then 40% and now it hits 45%. It’s time to call a halt to this descent into chaos. Their funding model fails the sector, it fails our students and it fails those whose hard earned wages continue to prop it up.