UK Government Miscalculates Budget for Higher Education Policy

November 21, 2012

Unlocking Word Meanings
Read the following words/expressions found in today’s article.

1. estimation (n.) [es-tuh-mey-shuhn] – an approximate or guess on the amount of something
Example: Based on estimation, business will lose profit because of the recession. 

2. assume (v.) [uh-soom] – consider to be true without enough proof or test
Example: Many college graduates assume that they will get jobs right away.

3. unwise (adj.) [uhn-wahyz] – not appropriate to the purpose; describes results obtained from lack of judgment or analysis
Example: Their unwise decision led to more costs to their company.

4. substantial (adj.) [suhb-stan-shuhl] – being large in terms of amount or value
Example: Budget cuts cause a substantial decrease in employee salaries.

5. reasonable (adj.) [ree-zuh-nuh-buhl, reez-nuh-] – practical; showing good sense
Example: Getting a job after graduation is reasonable to many people.

Read the text below.

The Higher Education Policy Institute (HEPI) in the UK reported that the government has made incorrect estimations for the budget of its new student loans’ policy. HEPI said the government has made an underestimation of university charges and fees and an overestimation of graduates’ future earnings.

The government assumed that university fees cost only £7,500 each year, when it is actually around £8,200 or higher. This means students will borrow more money than the government is ready for, and the amount of money that the government will get back from students remains uncertain.

The possible earnings of graduates, on the other hand, have been overestimated at £100,000, when graduates typically earn only £75,000.

In addition, the estimations assume students will receive regular salary increases in their jobs.  In reality, only high-earning workers who receive substantial increases to their salaries could pay loans on time, while low-earning workers may not be able to pay back loans fast enough.

According to HEPI, given the current economy of the UK, such numbers come from hopeful and unwise guesses.

HEPI director Bahram Bekhradnia says these errors in estimations would cause serious problems in the government’s future budget. To gain more money, taxes may be increased and the budget for higher education may also be reduced. Student numbers may have to be kept low, or past students may have to repay more.

However, the government believes that their estimations are reasonable. They said the student loan budget was created based on well-informed estimations that are neither too positive nor too negative about the future economy.

Viewpoint Discussion
Enjoy a discussion with your tutor. 

Discussion A

·         Why is it important for a government to create a budget for projects and policies?
·         Can you think of a government project in your country that seems to use its budget wrongly? Why does it seem wrong?

Discussion B
·         Do you think paying back student loans is also difficult in your country? What makes you say so?
·         What can graduates do in order to pay back their expensive student loans?


November 21, 2012