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Education: Finance

Volume 472: debated on Wednesday 5 March 2008

To ask the Secretary of State for Innovation, Universities and Skills what cost-benefit analysis has been made of the decision to reduce funding to equivalent or lower qualification students. (175714)

We are not cutting funding to higher education. There is no cost to the Exchequer because we are redistributing funding away from students doing equivalent or lower level qualifications in order to fund more new entrants to higher education than would otherwise be possible. First and foremost, we took this decision as a matter of fairness and social justice, but it also has an economic rationale. The additional lifetime earnings “premium” associated with getting a first degree in this country remains comfortably over £100,000 in today’s prices which makes it among the highest in the developed world. Given that, it is clear that enabling 20,000 more new students (or students progressing to a higher level) to enter higher education will bring considerable long-term benefit to both individuals and the economy, through having a larger number of more highly qualified, more productive workers than would otherwise be the case.