Business

Architect Of £9,000 Tuition Fees Calls For Faster Loan Repayments

Architect of £9,000 tuition fees calls for faster loan repayments

David Willetts says taxpayers footing too much of the bill for university students’ unpaid loans

The government should build universities in places such as Blackpool to help regenerate local economies, and boost higher education funding by making graduates repay loans more quickly, according to the minister who created England’s current student funding system.

David Willetts, the former universities minister who oversaw the switch to £9,000 student loans for tuition fees in 2012, said taxpayers were footing too much of the bill for unpaid loans.

His solution is for the government to lower the starting threshold for repaying student loans to earnings of £21,000, from the current rate of 27,295. That would save the government nearly £3bn a year, but graduates from England would see their tuition and maintenance loan repayments more than treble.

Under Lord Willetts’ proposals, a graduate earning £30,000 annually would see their repayments rise to £67 a month or £800 a year, compared with £20 a month or £243 a year now.

“It is in the interests of students that universities are well funded. But that should not come at the expense of taxpayers. It is wrong that forecast loan write-offs have risen from 28% [in 2012] to 53% today,” Willetts said. Using the proposed lower threshold, 44% of loans would be written off by the government.

It has been reported that ministers plan to lower the earnings threshold for repayments as part of the upcoming comprehensive spending review, and cuts to tuition fees and limits on some courses are also being considered.

The threshold cut was among the measures recommended by the Augar review of higher education in 2019, which also suggested cutting tuition fees to £7,500 and extending loan repayments from 30 to 40 years.

Jo Grady, the general secretary of the University and College Union, said that instead of burdening more students with debt, the focus should be on “proper” public funding. She said: “Lord Willetts, as the architect of £9k tuition fees, cannot claim to be concerned about the high levels of student debt while simultaneously proposing to hit lower-earning graduates with debt repayments.

“Lowering the repayment threshold to £21k, which is well below the average wage, will be a millstone around the neck of young graduates and risks putting students off from getting the education they need. It also fails to address the systemic problems with the university funding model which has led to rampant job insecurity and a precipitous decline in part-time and mature study.”

Writing in a paper for the Higher Education Policy Institute (Hepi), Willetts argued that demand for university degrees remained high, and he called for the government to keep expanding the higher education sector as a way of encouraging economic growth.

“Higher education has fallen out of favour. But it boosts earnings, wellbeing and the prospects of people and areas left behind,” Willetts said. “Conservatives are increasingly worried that graduates are leftwing but the party’s problem is with young people more widely. The best way to tackle this problem is by helping them fulfil their aspirations to own their home, get a decent job and – yes – go to university.”

Willetts argued that rather than attempt to reduce the numbers of school-leavers going into higher education, the government should continue to encourage campuses to appear across England.

“Many towns without one see gaining a higher education institution as one of the best ways of boosting their prospects. They attract young people to an area instead of losing them as they go to university elsewhere,” he said. “Blackpool council is supposed to have turned down a new university decades ago, so it went to Lancaster instead: now is the time for Blackpool to rethink that decision. Other towns such as Wigan and Wakefield are candidates,” Willetts writes.

Portsmouth is one of those cities that hugely benefits from its university, according to its vice-chancellor, Prof Graham Galbraith. The university has a decade-long strategic partnership with the local hospital trust, it sponsors the football club, is setting up a multi-academy trust and has plans to invest several hundred million in its city estate over the next few years.

“We are typical of universities in their cities up and down the UK,” said Galbraith. “We are the fourth largest employer in the city with a regional economic impact of £624m per annum, supporting nearly 9,500 jobs every year.

“These numbers might seem abstract but they translate to city centre shops, taxi drivers and businesses experiencing better sales when the students arrive at the start of term than at Christmas. You can imagine how much of a boost that this will be this year and the clear long-term impact our university has in our local community and economy.”

Also in the Hepi paper, Willetts included one unusual proposal: allowing universities to buy the student loans of their own graduates, giving the institutions an incentive for their graduates to earn more and continue making repayments.

“Universities should be able, if they wish, to take a stake in their own graduates’ debt so if the graduate earns more the university gets more back,” Willetts said. “The scheme needs to be designed so that universities do not have an incentive simply to select the students who will earn most.”

Willetts said such a scheme could enable universities to buy their own graduate debt at a discount to the market price, minus the university’s own write-off charge.

Responding to the paper, a Department for Education spokesperson said: “The student loan system is designed to ensure all those with the talent and desire to attend higher education are able to do so, whilst ensuring that the cost of higher education is fairly distributed between graduates and the taxpayer.

“We do not comment on speculation in the run-up to fiscal events.”

Business

Nigeria begins sales of Crude Oil in Naira

Nigeria has officially commenced the sale of crude oil and refined petroleum products in Naira.

This milestone, announced by the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, marks a new chapter in the nation’s economic strategy.

Effective from October 1, 2024, the Federal Executive Council (FEC) directive to trade crude oil and petroleum products in Naira was implemented following a key meeting of the Implementation Committee.

The meeting included prominent stakeholders, such as the Minister of State for Petroleum (Oil), the Special Advisers to the President on Revenue and Energy, executives from the Nigerian National Petroleum Company (NNPC), and top representatives of the Dangote Group. The Group Chief Executive Officer (GCEO) of NNPC and its Chief Financial Officer (CFO) were also in attendance, underscoring the initiative’s national significance.

The strategic policy, championed by the Bola Ahmed Tinubu-led administration, is expected to reshape Nigeria’s economy.

By denominating oil sales in Naira, the country aims to bolster economic growth, enhance stability, and promote self-sufficiency.

The move is seen as a crucial step toward reducing dependency on foreign currencies, positioning Nigeria for long-term success amidst the ever-changing dynamics of global markets.

Business

Electricity Tariff hike: Nigeria’s discos collect N887bn as revenue

Revenue of electricity distribution companies in Nigeria increased to N887.86 billion in the first seven months of 2024 amid an electricity tariff hike.

This is according to the analysis of Nigerian Electricity Regulatory Commission data on Discos’ commercial performance for the seven months of 2024.

The data showed that out of N1.14 trillion electricity bill issued by Discos to customers, the companies recorded 79.7 percent collection efficiency which stood at N887.86bn in the period under review.

A breakdown of the bill collection by Discos from January to July 2024 includes N95bn, N97bn, N100.44bn, N142.92bn, N191.65bn, N150.86bn and N162.14bn which amounted to N887.86 billion.

Further analysis showed that during the corresponding period in 2023, the companies issued bills totaling N797.18 billion, while they managed to collect N604.15 billion.

This surge in revenue collection is not unconnected to the hike in electricity tariff in April from N66 per kilowatt-hour to N225.

Recall that amid the call for the electricity tariff hike reversal, it was reviewed downward to 206.68 per kilowatt-hour, but was reviewed upward to N209 per kilowatt-hour thereafter.

Though the electricity tariff hike was introduced for customers getting at least 20 hours of power supply, Nigerians have lamented the burden occasioned by the tariff.

The energy cost pain has been exacerbated as Discos migrate more consumers to Band A feeders.

The Minister of Power, Adebayo Adelabu, however, insisted that Nigeria’s electricity tariff is among the cheapest within African countries.

Business

FG unveils seven CNG conversion centres in Ekiti

The Presidential Compressed Natural Gas Initiative (P-CNGi) has unveiled seven centres where commercial transporters can convert their petrol to CNG-powered vehicles in Ekiti.

The Program Director of P-CNGi, Michael Oluwagbemi who spoke during the official unveiling of the centres and handing over of 15 CNG-powered buses to government in Ado-Ekiti, Ekiti State capital at the weekend, urged commercial transporters in the state to visit the centers to convert their vehicle free of charge.

He explained that the CNG initiative is cheaper, more convenient, and safer compared to petrol, noting that the administration of President Bola Tinubu is determined to energize the economy through the initiative which he said would create jobs and enhance sustainable development.

Oluwagbemi disclosed that the administration is targeting one million vehicle conversions to CNG by 2027, saying that no fewer than 125 centres have been opened across the country.

He listed the new centres in Ekiti state to include, Femoyo centres, Beijing Universal Limited, ABJ oil and gas, Bovas Company, and NADDC training center in the state capital.

The program director said that the 15 buses donated would be deployed for inter and intra-state transportation towards achieving about 40 percent reduction in the transportation cost and ultimately reduced hike in food items.

According to him, ” the government of President Bola Tinubu through the presidential CNG initiative is committed to ensuring they(transporters) use this for their vehicles because it is cheaper, cleaner and more importantly it is safer and more reliable.

” This is a compressed natural gas, it is not the same you use in your kitchen to cook. It is lighter and stored in a bulletproof container. It is also the fact it is produced in Nigeria and what the president said is that instead of us to continue to import poverty and export jobs. He said will need to look inward and use what God has given us.

” It is about job creation, it is about reducing the cost of transportation and ensuring economic development by moving away from subsidy payment where we were making the few richer.

” This is a more sensible and reliable path for Nigeria in terms of our energy sector, and that is what the president is doing with this initiative.”

Speaking, the state governor, Biodun Oyebanji commended the federal government for the initiative, adding that the state would support the programme towards ensuring that more vehicle owners embrace the CNG conversion.

The governor who was represented by the commissioner for Infrastructure and Public Utilities, Professor Mobolaji Aluko explained that the CNG conversion initiative would help in generating employment opportunities and economic development in line with his shared prosperity agenda for the state.

The state chairman of National Union of Road Transport Workers(NURTW) Joseph Falope and his counterpart in Road Transport Employers Association of Nigeria(RTEAN) Sunday Adeola, expressed delight over the initiative, assuring the government that members of their respective unions would take their vehicles for conversion to CNG.

On his part, the Chief Executive Officer of the National Automotive Design and Development Council (NADDC), Joseph Osanipin said the council has trained no fewer than 45 technicians across the state on how to convert petrol vehicles to CNG-powered vehicles.