Ed Miliband is mooting a tuition fees cut, to a maximum of £6,000 a year according to reports. I graduate in 2016. If Labour wins the next election, I’ll be in one of only 4 cohorts to pay £27,000 for their education. If I’m really unlucky, I might get lumped with a graduate tax too.

It’s not my plight, however, that’s got Labour talking about tuition fees again. Instead, it’s the government’s admission that the current policy is likely to be more expensive than planned: official estimates suggest that 45 per cent of students will never pay back their loans. Just 3.6 per cent more and the new system would be more expensive than the old.

What’s gone wrong? In raising the tuition fee cap, the government expected that a market in degrees would emerge, with costs varying according to a course’s impact on earning potential. This hasn’t happened. Many courses are charging the full £9,000 a year, from those which definitely increase your earnings to those which definitely don’t – studying Engineering at Cambridge costs the same as doing Drama at East Anglia, but the risk of their graduates defaulting on their student debt is likely to differ.

There’s a market in private schools: some partake in a facilities arms-race; some adopt a ‘no frills, just A*s’ grammar school-esque model and others go bust. Why aren’t universities moving in this direction?

One problem is that students don’t see their loans as real money. My peers and I have never had a mortgage or worried about a credit card bill. We are told that we are soon to be ‘burdened by a mountain of debt’, but the phrase instils an abstract fear at best. We don’t know what being in debt feels like, let alone what it’ll feel like in three years’ time. It’s an attitude my parents’ generation find difficult to understand: how can you be blasé about £27,000? It’s hard for them to remember leaving school all those years ago, care- and debt-free.

There’s a market in private schools because parents pay the fees themselves, and so make value-for-money a prime concern. The way to create a market in university courses is to encourage those who can contribute towards the cost of their education to do so. At the moment, there’s no incentive to pay upfront if you can.

My friends insist that you’d be crazy not to take out a student loan. The old adage that ‘it’s the best value money you’ll ever lay your hands on’ still circulates. This is profoundly misleading: at interest rates of 3 per cent plus inflation, there’s nothing cuddly about a student loan. The government is scared of being accused of making university education the preserve of an economic elite, but it’s coming close to mis-selling student loans as a result. Loans are there to ensure that no one is stopped from going to university by their financial situation. It’s the government’s duty to impress this upon students: student debt is a last resort, not a default. If your family can help with either fees now or your first mortgage later, you shouldn’t assume that the second is the better choice.

If more students were paying out of their own or their parents’ pockets, the pressure on universities to make fees more reflective of course costs would increase. Engineering at Cambridge does not, in fact, cost the same to provide as Drama at East Anglia. This is obvious, but, in the current climate, not something about which my peers are particularly concerned.

If I (wrongly) assumed that all of my yearly £9,000 goes towards teaching me History, I’d be paying £93.75 per contact hour. It may be Oxford, but our lectures aren’t that good. My Engineering neighbour would be paying just £17.04.

Universities should produce breakdowns of where the fees go – what’s spent on teaching, facilities, pastoral care, exams… If huge sums go unaccounted for, financially-savvy students would look for a better deal elsewhere: a market would emerge.

The government shies away from such an approach because it doesn’t want to deter students from taking more expensive, shortage subjects like Physics and Chemistry. But this shouldn’t be a problem: these subjects could be subsidised. Applicant numbers for STEM degree subjects might even be boosted as a result – aspiring Scientists would realise what an amazing bargain they’re getting compared to us swizzled Arts students.

Tags: Coalition, Ed Miliband, Higher education, Labour, Tuition fees, Universities