Leading Article: Off-message on student loans

PERHAPS the worst aspect of the Government's handling of the student finance issue is its failure to get the message across: students will not have to pay back their debt unless and until they can afford to do so. This failure is strange in a government so obsessed with presentation. David Blunkett should have hammered home one simple point: graduates earn more. Two conclusions follow. One: why should non-graduates, who are generally poorer, pay through their taxes for graduates' education? And two: it is in everyone's interest to go to university if they have the ability - and this remains the case when they have to pay for it, especially if they are offered the no-lose proposition of a soft loan.

That is why next week's threatened revolt by Labour MPs against the Higher Education Bill is misguided and unjustified. The principle of the Government's reform is sound, but the case simply has not been made, either to MPs or to the general public. The rebels claim to be defending two linked ideals: equality and free education. As for equality, how can it be justified that pounds 8bn a year of public money should be spent on a minority of the population which is overwhelmingly the richest and most privileged part? The invocation of the ideal of free education - bracketed by Tony Benn with a free health service - is a simple category error. Free education is egalitarian to the extent that it is universal: higher education by definition is not, it is elitist. The argument that access to university is theoretically open to everyone, on the basis of ability, is precisely the bogus notion of equality of opportunity which, in other contexts, Mr Benn would deride.

That said, the Government's proposals are flawed and incoherent - but only because they depart from the foregoing principles. In order to reduce the cost of the proposals of the Dearing Committee, the Government made two changes. Dearing recommended that a flat-rate grant to cover living expenses should continue to be paid to all students, to be topped up with loans. The Government decided to abolish grants - half this year and the rest next - and put the whole burden on to loans. That was sensible. But the Government also decided to require tuition fees to be paid up-front, with an exemption for students whose parents have low incomes, instead of also being loaded on to loans. Roughly one third will have to pay the full pounds 1,000 a year; one third will pay less on a sliding scale; and one third will be exempt. This means students will continue to be means-tested on the basis of their parents' income, which is wrong in principle. At 18, people should not be forced to rely on parental support, which in some cases may not be forthcoming. Students should only be means-tested on the basis of their own future income, through the loan scheme.

The Labour rebels are missing the point, then, and comparisons with last year's rebellion over cuts in lone parent benefit are an insult to lone parents. But the Government should have had the courage of its convictions and ensured that the cost of expanding higher education is met by those who benefit from it - and not by the parents of those who might.