Rachel Reeves said *WHAT*!

It’s sheer peevishness as well as muddled headed thinking from her, and this is the woman that so many praise to the skies and some even want to be PM 😲

Many agree for the reasons given here but also for her sheer flakiness.

I agree, MaizieD. Education like other public services is a public good from which we all benefit and it should be funded through general taxation as it once was with parental income assessment for maintenance grants to help poorer individuals.

The argument that it benefits only those taking degrees is nonsense. We need surgeons and physicians, physicists, musicians and historians. The present system loads them with excessive debt for a lifetime. The government inflates money it collects at RPI which is higher than CPI which it uses to pay occupational pensions.

Of course a degree has led to higher income but there are plenty of nongraduates on high incomes - plumbers, footballers, etc.

MaizeD 👏👏👏

She is in the wrong party or perhaps shouldn't be in government at all.

She is in the wrong party. She has never seemed to have real Labour values. She wanted to be "tougher than the Tories " several years ago. Now she seems to saying that there should be no welfare state.
She wants to take money away from disabled people on benefits, those who have the least, in order that those who have the most can keep all they have.

Plus she wouldn't have had to pay her student loan back, going by her age, so she was quite happy to accept purely state funded higher education.

I know that not everyone pays back their student loan, but for those who achieve a salary above the cut off point the cost can be exorbitant. Such as this example posted on SM

A doctor whose student loan was £77,000+ (don't forget they are 'students' for longer than most graduates) now, after 3 years in post owes £106,000.

bsky.app/profile/peterstefanovic.bsky.social/post/3mdkb7pq2n22x

Our graduates and our universities' research in ,many fields have been highly regarded internationally. How can we continue to produce such high quality results if potential graduates fear they'll be burdened for years with huge debt? How can we train our much needed professionals in the caring disciplines?

I'm cheered to see so many agreeing here. I was furious when I read her statement

Is there a link to a written statement MaizieD? It would be interesting to see the context.

This is about as full as you can get for what was just one statement at the end of many complex ones in a radio interview. This is a record of the actual interview.

www.lbc.co.uk/article/rachel-reeves-tells-lbc-student-loan-system-is-fair-amid-fury-as-graduates-rack-5HjdRQH_2/

Before we get on high horses in a massive way I do think we need much more thought into t system that is clearly not really working properly, for simple reason -

I agree in theory of course, who could not, that we pay for our next generation of workers who fully need the degree ...

but How can our society pay for all students whole expenses with current levels of university attendance - where's the money coming from?

I saw posts about it on Bluesky so did a search, which came up with this

www.newsbreak.com/the-independent-517119/4466568522907-voices-everyone-with-a-brain-can-see-student-loans-are-unfair-except-the-chancellor

There was a clip of her saying it too. I gather it was part of a radio interview.

How can our society pay for all students whole expenses with current levels of university attendance - where's the money coming from?
Students bring a huge amount of money into local economies of university cities. Obviously the expansion of HE has increased the number of those cities.

Thy pay rent, spend on food, clothes, entertainment. They buy train tickets and use buses. They go out in the evenings and often keep the hospitality sector afloat. Many get involved in local projects of all kinds as part of their degrees. They contribute to research. They have jobs, and some will pay tax. When they graduate they often stay where they have studied, but wherever they live, they will, on average, earn a lot more than non-graduates and pay tax and NI on their earnings.

Staff definitely pay tax. They also live in university areas and buy or rent houses. They pay council tax, and also spend in local shops, restaurants and entertainment venues.

All of that is money in the economy, so where the money comes from.

Oh, cross posted with Wyllow. Thanks for the link, Wyllow.

OK. Asking where the money is to come from is reasonable. I, of course, would say that despite the increased numbers of students, a means tested maintenance grant, as in the past, would not be impossible; the government doesn't have to wait for taxation to fund it. The grant could cover reasonable living expenses (rent and food at a predetermined rate) with a top up loan for books and necessary equipment, or more expensive accommodation if that's what the student wants.
Any loans to be administered by a not for profit organisation and interest rates to be fixed (like mortgages used to be) not upped at every opportunity.

The money the state would put in would be good for the economy as it would inevitably be spent in the area local to the university. Most of it would come back as tax.

I'm aware of the growing anger about "student loan interest payments" particularly. Martin Lewis was on TV talking to Victoria Derbyshire about this. He also spoke about Reeves decision to freeze of repayment thresholds" so a form of fiscal drag.

Reeves was on LBC yesterday talking on this matter. She actually said "Around half of people going to university today, but half don't. And it is not right that people who don't go to university are having to bear ALL the cost for others to do so".

Lewis didn't appear to be too incensed about that particular statement when put to him by VD and said that was a "separate argument for others to debate". His main concern was the change in contract terms affected by Reeves regarding freezing the repayment thresholds, and that a change of contract terms that "wasn't moral" as it is "fiscal drag".

Grantanow I agree, MaizieD. Education like other public services is a public good from which we all benefit and it should be funded through general taxation as it once was with parental income assessment for maintenance grants to help poorer individuals.

with parental income assessment for maintenance grants to help poorer individuals is what I will argue against. If somebody's parents are unwilling to financially support them in further education, are you quite happy for that individual to be denied their opportunity? Basic maintenance grants should be available to all.

I do agree with public funding when appropriate, but we have be aware that all tax payers, whether they have children at uni or not, whether they have been at uni or not, are funding the huge student loan debt, and clearly we can't let it go up and up forever.
Should we be funding so many academically not other areas of skills, are people on half decent courses , with consistent tutors who aren't worried about constant zero hours or very short tern contracts, and so on.

I expect more statements now as a result of the answer to the interview statement RR made, as it is a big issue that wont go away thats just grown and grown into the massive somewhat out of control situation we have.

You could equally claim that people with no children should get a tax rebate because they’re not using state schools.

In which case parents paying school fees would probably claim the same.

Childless adults could also claim a rebate for not using maternity services, childhood vaccinations, etc.

Talk about a slippery slope. - that’s never going to happen.

My eldest grandaughter left university in 2024 and is now in permanent employment and repaying her loan. Granddaughter 2 is a second year medical student, acquiring debt for a total of five years. Housing is also very expensive in the city where she is studying.
My friends and neighbours in France are horrified by how much UK students have to pay for tuition and living costs. In France the state provides.
The students here do stay close to home though. Travelling across the country to study is very rare here.

Witzend

You could equally claim that people with no children should get a tax rebate because they’re not using state schools.

In which case parents paying school fees would probably claim the same.

Childless adults could also claim a rebate for not using maternity services, childhood vaccinations, etc.

Talk about a slippery slope. - that’s never going to happen.

That is exactly what I thought, Witzend.

You just cannot work a system like that. It's either a system of state provision of public 'good', or; pay for private provision. But if it's state provision individuals can't pick and choose which bit they'd like to contribute to...

And if it's private provision we retreat further into the Victorian era.

Above all, it was the sheer divisiveness of what she said that horrified me. I didn't quote the entire statement because, quite honestly, I didn't think the first bit was relevant.

^ but we have be aware that all tax payers, whether they have children at uni or not, whether they have been at uni or not, are funding the huge student loan debt,^

'Taxpayers are not funding the student loans.

If only this lie weren't superglued to people's belief of how the national economy works.

Every penny paid in tax originated with the government when the government purchased the resources needed to provide our services and infrastructure. This is how money is created. Taxation just takes back the excess to control inflation caused by too much money in the economy.

This is what makes Reeves' statement so utterly wrong. The government is 'bearing the cost'. No-one else is. She's just feeding envy and division; and worry about 'how can we afford it'.

with parental income assessment for maintenance grants to help poorer individuals is what I will argue against. ^If somebody's parents are unwilling to financially support them in further education, are you quite happy for that individual to be denied their opportunity? Basic maintenance grants should be available to all.*
Agreed. It's either that or make contributions compulsory, and there would be numerous problems with that.

Also, one of the many problems with means-testing based on household income is that it is made up in different ways. Why should a family with two workers earning £20k each lose out, when a student from another with a single earner on £39k gets a grant because the other parent is unwilling to get a job? Maybe if a cut-off were set by dividing the income by the number of adults in the household it would be fairer. But then what about people who can't work for good reasons?

Obviously those figures are made up, but the point is that means-testing is such a blunt instrument.

Every penny paid in tax originated with the government when the government purchased the resources needed to provide our services and infrastructure. This is how money is created. Taxation just takes back the excess to control inflation caused by too much money in the economy.

Students, and universities in general pay a lot into the economy. I outlined various ways they do that above, but it also happens when buildings are erected/maintained, franchises sell food and drink on campus and employ staff, machines and other equipment (eg in labs) are bought, serviced and modified, and much more.

Cutting student numbers is very bad for local economies, and that feeds into the national economy, so we all benefit, even if we live miles from a university.

Students, and universities in general pay a lot into the economy. I outlined various ways they do that above,

You did indeed, Doodledog and it was very helpful. It's vital that people understand that what the government spends doesn't disappear into a black hole. It actually keeps the economy moving and even growing. Government spending is as much a 'public good' as are the things its spending provides.

MaizieD Rachel Reeves, I think in the context of being interviewed about student loans, had this to say: "It is not right that people who don't go to university bear the cost for others to" I couldn't believe my eyes when I read that.

Politics of envy. Divisive.