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The news that the government¡¯s loan scheme is likely to be as expensive as the system it replaced because of the amount of student debt that may never be repaid (¡°New fees regime edges close to cost of old system¡±, News, 20 March) probably will not surprise many people.

But the response that this may mean a reduction in teaching budgets, and so a cut in support to the children of your editor¡¯s cab driver, will be the wrong response. Such a reduction is likely to increase levels of student dropout, with a consequent increase in unrepayable debt and the entry into what bankers call a ¡°death spiral¡± in funding.

Investing in some kinds of student support can have a positive return for universities as more students continue their courses and go on to pay more tuition fees. The time to invest, as Warren Buffett says, is in ¡°a down market¡±.

Ormond Simpson
Visiting fellow, Centre for Distance Education
University of London International Programmes