Pyramid Comment

This journal takes an alternative view on current affairs and other subjects. The approach is likely to be contentious and is arguably speculative. The content of any article is also a reminder of the status of those affairs at that date. All comments have been disabled. Any and all unsolicited or unauthorised links are absolutely disavowed.

Saturday, April 30, 2011

Open University

Additional: 22.07.2011

  • The Open University has announced annual tuition fees of £5000 for students starting full-time study next year (2012). Still less than the 'average', but disappointingly it appears to be jumping on the loan train. It has blamed the increase  on government 'reforms of university funding' (don't they all? - DA), but said that it is the lowest it could manage.
  • "The fee we've announced is the result of thorough research and is the lowest fee we are able to charge while ensuring we can continue to offer the quality, flexibility and accessibility for which the OU is renowned. Our scale and the way we teach mean we continue to be able to offer some recognised qualifications at a significantly more cost effective rate than you'd pay elsewhere."  
True - DA

    Additional: 20.08.2011

    As expected, a growing number of school leavers are opting for the OU rather than the conventional route. Some are, in fact, declining the original choice before results were obtained in favour of the OU. The reason? Cost: 3 x £5000 = £15,000 vs 3 x £9000 = £27,000 (all before interest). The OU also does not incur accommodation costs and at around half the outlay, this is still vastly cheaper. The alternative huge and potentially crippling outlay that as a debt must be serviced (many have seen through the government rhetoric of 'nothing to pay up front' ) has the enormous tide of debt following (cloaked - DA) from behind.

    With all the evermore depressing double-talked-up rhetoric about tertiary education costing around £25,000 - £27,000 over 3 years, the Open University (OU) offers a welcome option. And a great deal of choice. From school leaver to a more mature parent.

    The OU has been in existence since January 1971 and should be given serious consideration. The website is comprehensive and offers serious competition to the ‘mainline’ and very expensive alternatives.

    The government ‘sponsored’ system of tertiary education is to capitalise on the profit potential. It appears to be totally disinterested in the student (undergraduate or postgraduate) and only concerned with the interest yield on the loan that could take at least 30 years to maybe only partially pay off.

    • I have no personal interest in all this other than to assist others to maybe avoid the potential trap laid down by the (‘caring’) government. The series may be (hopefully) terribly wrong or only partially correct. It is up to the reader to decide for themselves. 

    Good luck for your futures - DA

    Friday, April 29, 2011

    The National Scholarship Programme

    Year One


    • Government contribution to the National Scholarship fund will be £50m in financial year 2012-13, £100m in 2013-14 and £150m from 2014-15 (as at April 2011 - DA)
    • 2012/13 is the first year and the arrangements will be reviewed and amended in light of experience and feedback (ie: move the goal posts after the game has begun - DA) to support full implementation of the Programme in 2014/15 (as at April 2011 - DA)
    • Provisional allocations to institutions for 2012/13 will be announced by HEFCE by early March 2011, based on size of institution, to meet wide scheme objectives
    • Institutions will be responsible for making individual awards to students and will publicise their NSP award schemes on their websites
    • UCAS will provide a portal on their website linking to each institution’s NSP scheme
    • Guidance for institutions on the operation of the Programme will be developed by HEFCE, working with OFFA and BIS and subject to ministerial agreement
    • HEIs (Higher Education Institutions) will be asked to supply appropriate data to help monitor the effectiveness of targeting the awards
    NSP is a direct benefit to the individual

    • NSP will provide a direct benefit to individual, eligible students.
    • Each eligible student will receive a benefit of not less than £3,000 (FT = full time and pro rata PT = part time to a minimum intensity of 25%). This is a one-year benefit, not a recurrent, annual entitlement.
      • What happens if the student withdraws from the course after the 1st year?
      • Does it become repayable?
      • No more than £1,000 of the overall NSP award is to be provided as a cash bursary
    • NSP is not to be used to fund outreach programmes, which universities will continue to fund through alternative means (? - DA)
    The menu

    • Institutions may offer one or more of the following:
      • a fee waiver or discount
      • a free foundation year where leading to progression to a professional career via a course with high entry requirements
      • discounted accommodation or other similar institutional service
      • a financial scholarship/bursary – capped as a cash award at £1,000

    Student eligibility for NSP awards

    • No one with a declared income over £25k (eligibility for a full grant) will be eligible, but receipt of a full grant does not represent an entitlement to NSP
    • Institutions will decide their own detailed eligibility criteria, based on targeting guidance and their own circumstances
    • Eligibility criteria must be clear, transparent and published on the HEI's website
    • Students will be considered for an award in the year they begin their studies
    Match funding by institutions in first year 2012/13

    • For this first year, OFFA will have discretion over the match funding level it requires through the Access Agreement. This will mean OFFA can use its discretion in 2012 to reduce the match funding level within the overall access investment totals. This discretion should be used only to avoid unintended consequences, that is where the match funding pressures on the individual HEI are very high and the effect would be that they cannot invest effectively in outreach activities
    • The starting assumption should be a match funding expectation at 1:1 for any institution with an Access Agreement
    • Institutions without an Access Agreement who wish to take part will have a reduced match funding requirement (50% for the first year). HEFCE will apply the same discretion on match funding, as above, if appropriate
    • Institutions may decide to match fund by increasing the number of eligible beneficiaries or increasing the value of individual awards (above £3,000)
    Evaluation and future development

    • HEFCE and  OFFA will develop an evaluation strategy and review method to help inform the design of the full programme
    The future scheme will prioritise:

    1. Increased student choice
    2. Improved and earlier signalling of individual eligibility
    3. Improved integration and signposting through outreach

    February 2011

    Tuesday, April 26, 2011

    University Guide: Complete And Independent

    The Complete University Guide 

     Independent, Trusted

    This requires very careful reading and interpretation
    and the upbeat ‘independence’ demands CAUTION

    What does ‘Independent actually mean
    and who are the ‘we’ referred to?

    • Fees charged will be paid directly to the University and applicants will be able (‘forced) to take out a Tuition Fee Loan to cover the costs
    • No student will pay up front for their tuition since a ‘forced  loan will be made on the student’s behalf. The loan is a condition of entry and effectively mandatory - DA. Nothing up front, but the debt is amassing in the shadows and following up behindRPI (higher) and the CPI: 5.3% and 4.0% respectively and defines the alleged 'interest-free' loan. (An odious description -  DA.) Paying back the loan will start only after they have graduated and only then if they are earning over £21,000 and compares with a current (2011 - 2012) repayment threshold of £15,000 for graduates leaving Universities
    This sounds as though the student is benefiting from the increase, but like Credit Card Debt, the less that is paid off the more the accrued interest over the period of the loan. Can the student pay off more than the required minimum? Such an option isn’t mentioned, but the condition:

    • Mechanisms will be in place to prevent high earning graduates (and presumably those from wealthy backgrounds) to unfairly ‘buy themselves out of the repayment system. Payment of interest for the greatest time is forced.
    Applicants going to Universities in 2012 will graduate in 2015 at the earliest and it is only afterwards (in April 2016) that those with a job earning more than £21,000 will begin to repay the minimum (3-year) loan:

    year-1 + amortised interest and
    year-2 + amortised interest and
    year-3 + amortised interest and

    That's years 1 + 2 + 3 and all the amortised interest with absolutely nothing paid off the growing debt.

    • Monthly payments will be lower than those operating under the current system, so they will have to repay over a longer period of their working lives. The interest yield will be significantly more.
    • Graduates earning more than £21,000 will pay 9% of their income every year for up to the next 30 years. This is payment towards the loan and (generously - DA) any outstanding repayments will be written off after 30 years.
    £21,500 - £21,000 = £500 x 9% -> £45/year
    • £3.75/month
    £25,500 - £21,000 = £4500 x 9% -> £405/year
    • £33.75/month
    £30,500 - £21,000 = £9,500 x 9% -> £855/year
    • £71.25/month
    £40,500 - £21,000 = £19,500 x 9% -> £1,755/year
    • £146.25/month

    This does not consider the amortised interest

    After 1-year, the debt will be minimally £27,000 - £45 = £26,955. But, assuming an RPI at 3% (that will almost certainly increase and is the reason for linking to a variable and not fixing a rate - DA), the new balance after this first year will have grown to £26,955 + £808.65 = £27,763.65. After having paid just the minimum requirement of £45 over the entire year:

    an ‘essentially free-interest’* loan
    has increased by almost £800

    Any organisation that describes as an 'interest-free loan' one that clearly is not, must be examined very carefully.

    Earning £21,500/year or £3.75/month (£45/year) this will take:

    £27,000/£45 = 600 years

    Earning £25,500/year or £33.75/month (£405/year) this will take:

    £27,000/£405 = 66.7 years

    Earning £30,500/year or £71.25/month (£855/year) this will take:

    £27,000/£855 = 31.6 years

    Earning £40,500/year or £146.25/month (£1755/year) this will STILL take 

    £27,000/£1,755 = 15.4 years

    That's 185 months paying £146.25/month. For anybody to walk into their 1st job at that sort of salary is unlikely, even in the banking industry. The ridiculously high banker bonuses are NOT the norm in general banking. For many that will most likely be an end-of-career high. All of this is full of totally unrealistic dangerous hype.

    If earning up to around £30,000/year, the debt will still remain unsettled even after 30 years. The amortised interest will see to that. Even today (2011), sucand h salaries are career highs. Few graduates will walk straight into a career job paying that salary. After a few years this is theoreticaly achievable, but the other financial commitments will have increased: mortgage, car, children (and financing their education - DA)...

    An interest-only mortgage is popular in the UK by enabling the acquisition of a loan (at minimum repayment cost) to 'buy' a property. The appreciation of the property value at least offers the potential of something once the capital is eventually paid. Even though £0.00 is paid off (interest-only) from the capital borrowed, the rise of the asset value theoretically enables the capital (years later) to also be paid. The student loan is essentially an interest-only loan, but has no such growth potential other than growing the debt liability.

    With a degree and without a job, the debt would take over 600 years to pay off.

    But the debt is cancelled after 30 years (Wow! - DA)

    • This clearly chains the lower paid to their debt for longer and the interest yield is all the greater. The over-privileged elite will thrive at the expense of the under-privileged (those that the government claims to want to ‘help’). The evidence is one acting as a true parasite: it sucks in the under-privileged to feed off and so pay for the continued rise of their elitist class.
    • It's easy to confuse wealth with 'class'. The majority of people (April 2010 - still a Labour government) may imagine themselves to be 'middle-class', but that's... illusion. Working-class or privileged: that's it basically. Just the two types. The working-classes... work. Everybody else that is monied and does not need to work is... privileged. Influential by position and not necessarily with ability.
    An ounce of image is worth a pound of ability

    This can be interpreted as encouraging accepting low pay to keep the annual salary below £21,000 (when will this ceiling go up? The higher it is, the more interest accrued by the lender) for the next 30-years to minimise or avoid paying the interest altogether since the debt will be written off. Is the borrower then recorded as a debt defaulter? - DA). This is, of course, absurd logic, isn’t it? But...
    • The loan will accrue a real rate of interest equal to:

    RPI to RPI + 3% for graduates earning between £21,000 - £41,000
    RPI + 3% for graduates earning above £41,000

    How It Works

    By manipulating the rate:

    Raising the rate and increase inflation?

    Lowering the rate to reduce it?

    • This means that a graduate earning less than £21,000 has essentially received a ‘free-of-interest loan. (NO IT DOESN’T - DA. An interest-free loan has 0% interest added, NOT the RPI and is the higher of the two indices (CPI).: 5.3% and 4.0% respectively.
    • Mechanisms will be in place to prevent high earning graduates (or those from wealthy backgrounds) to unfairly ‘buy themselves out of the repayment system. Payment of interest for the greatest time is forced. Once in with a debt, then there's no obvious way out. 
      • The elephant in the room with this point? Those able to afford it don't need the loan in the first place. Those requiring the loan enter the trap, those not needing a loan never get trapped and move on without the interest chain around the neck! Such is the 'trapping' of privilege.
    • The government is putting in place various loans, grants and scholarships for applicants coming from less affluent backgrounds. Gets them ‘into the system.
    • All full-time students will be eligible for maintenance loans irrespective of income but these will have to be repaid on the same basis as the tuition fee loans. This simply increases the yield to the lender.
    • These loans will vary in amount and are dependent on whether you live at home, away from home, or away from home in London. 
    • Students from families with incomes below £25,000 will be entitled to a maintenance grant of up to £3,250 for help with their living costs whilst those from families with incomes up to £42,000 could receive a partial grant. These grants are yours to keep and, unlike a loan, DO NOT have to be repaid. Free or partial grants can have the effect of a free (up to) £3,250, but an attached huge burden of a (up to) 30-year debt.
      •  Note:
    families and NOT individuals
      Trying to disguise the £40,500 - £21,000 = £19,500 x 9% -> £1,755/year or £146.25/month? By most standards that remains a good salary and is nothing like the average salary for an individual. That family income is defined seems to recognise the support necessary for the under-graduate.

          • What is the student (or sponsor) liable for should they withdraw from the course after the 1st year?
          Good news (!) for part-time students: for the first time, they will be entitled to a tuition fee loan (aka student loan) so long as they are studying for at least 25% of their time but they will not be entitled to maintenance support. (What’s the distinction between a maintenance loan and a maintenance grant? Is the former ‘with interest’ and the latter just ‘free’? - DA.)

          Differences between the old system (where’s the ‘inherited from the last government’? But this is ‘independent’ - DA) and the main things you need to know about the changes:

          • The Government is making substantial cuts to university budgets and, as a result, is allowing (or ‘forcing’) the Universities to introduce higher (predictably maximum in the majority of cases) annual Tuition Fees
          • Most fees are likely to be £6,000 or more (very cynical wording - DA), a few less than (?) £6,000 and some as high as £9,000 (this compares with a single fee for 2011 entry of £3,375 an increase or almost x2.7 in the ‘some’ cases. 
          • A University can charge different fees for different courses and they are likely to do so. (They can and so they will - DA.)
          • Universities wanting to charge more than £6,000 will have to make a commitment to spend some of the additional income in promoting wider participation and fair access for applicants from underprivileged backgrounds and also provide evidence of good student satisfaction, retention and success (rather a nebulous, but ‘essentially’ meaningless, concept - DA).
          • This commitment will be spelt out (defined? - DA) in their Access Agreement sent to the Office for Fair Access (OFFA - more ‘independence’) in spring 2011 and it is OFFA which will make the final decision as to whether or not a University will be allowed to charge the fee(s) they want to (in theory - DA).
          • It is anticipated that those discussions between the Universities and OFFA will be concluded in time for the new tuition fees structure for each University to be announced in Summer 2011, probably July.
          So, applicants planning to go to Universities in 2012 should know well in advance what fees are going to be charged for their chosen courses from year-1, but the overall bill after 30-years is somewhat less obvious.

          The number of questions is growing and that by itself is very worrying.

          The contractual small print must extend
          to many, many pages

          Monday, April 25, 2011

          University Of Kent - Tuition Fees

          The University of Kent has declared its intention of raising tuition fees to the maximum (£9000) as of the academic year 2012, yet has risen to its current position of only 34th (38th in 2011, though this marginal change is left unstated. Being 34th out of 116 sounds better than rising just 4 places from 38th to 34th position out of 116DA) of all the university profiles (116) listed in league tables.

          Top prices, far from top position

          A response from this University regarding two very explicit, important and straightforward questions regarding debt interest were simply ducked.


          University of Kent,

          Please can you clarify an issue that seems to be...

          ignored on all related websites

          That the loan becomes repayable when the student earns £21,000 or more is clear enough, but from when does the debt accrue interest?

          • Before graduation: is this from day 1 of the 1st year and onwards even though earnings are not possible for the undergraduate?
          • After graduation: is the debt clock ticking even though earnings may be below £21,000 or non-existent if unemployed?
          The answers to these questions are critical before the next step can be undertaken.


          • As we are in a state of change at present we would suggest that you visit the Directgov website...
          • Student Finance England are the organisation that are responsible for administering student loans. Any further enquiries must be directed here...

            • A request was issued recently with the questions and its receipt has been acknowledged (20.04.2011). This stated that the issue should be dealt resolved within:

              • 5 days. The answer is still awaited as at 30.04.11: 10 days

              • Difficult questions?

              • Reply received 04.05.11:
            • The speculation discussed among these pages regarding interest and when the clock begins ticking has changed from speculation to something rather more concrete. The disclosure of the actual content of the communication has been prevented by the e-mail ‘private and privileged’ rider. It is enough that the correct arguments have been pursued.
              • Changes could, of course, happen during the year

                Inflation varies by the month, but if the rate increases then a fixed non-variable value would benefit the borrower and is a possibly the reason that changes could happen during the year. If the rate were to decrease benefiting the student, would this constitute such a change?
                The most accurate and up to date information on interest, will be found on the repayment website:
                However, the important information regarding the interest and the payment conditions will not. This information lacking the critical important detail is also at (tread very carefully - DA):

          • Direct contact is necessary for any further information regarding personal circumstances.
          • STILL nothing about from when... 
          • With '0' lowest and '10' the highest score, by virtue of the secrecy, this entire website gets a resounding:

            The failure to even attempt an answer suggests questions such as these are not welcome and difficult: being in a state of change and still unable to provide even an adequate response, though still able to submit the proposals to the Office for Fair Access (OFFA or maybe OFLD = Office for Future Lifetime Debt). Many questions arising from Student Loans remain unanswered. For a university intending to charge the maximum fees this is totally out of order (with a very sinister undercurrent - DA) and further suggests that the speculation has a more solid grounding. There is clearly much to keep classified.

            • Student loans is a very open-ended subject. The most important factors when taking out any loan: from when is day 1 and how much will it cost overall?
            • The entire attitude becomes more sinister by the day