Chuka Umunna MP, Labour’s Shadow Secretary of State for Business, Innovation and Skills, commenting on revelations that the government’s trebling of fees could cost more than the system it replaced, said:

“In 2010 David Cameron and the Tory-led government trebled tuition fees and cut funding for universities and students, but this new evidence shows their system could end up costing the taxpayer more than the one it replaced.

“As a result of the cost-of-living crisis, earnings have been far below the government’s expectations and many graduates have been left unable to find a job at a time when more than 900,000 young people are out of work.

“Labour has warned ministers that trebling fees would create huge new debts and has raised concerns that many students would not be able to pay back their loans. Ministers have got their sums badly wrong and left a black hole in the student finance budget running into billions of pounds.

“We urgently need Ministers to come clean on exactly how much their broken system will end up costing and to provide assurances to universities, students and taxpayers.”

ENDS

Editor’s notes:

1. An answer to a Parliamentary question by Liam Byrne MP has revealed that the government’s estimate of the RAB charge (the proportion of student loans will be written off) has risen to 45 per cent. A RAB charge of 48.6% is the threshold at which experts calculate that the government will lose more money than it would have saved by keeping the old £3,000 tuition fee system http://www.theguardian.com/education/2014/mar/21/student-fees-policy-costing-more

2. Nick Hillman, former special adviser to David Willetts, has admitted the government “got its maths wrong” by overestimating the amount of student debt which would be repaid http://www.theguardian.com/education/2014/mar/21/tuition-fees-former-tory-adviser-government-maths-wrong?INTCMP=ILCNETTXT3487