A £50,000 free market prize has been awarded to the authors of a new report which has proposed allowing universities, rather than government, to lend to their students.
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Researcher Peter Ainsworth and academic economist Dr Tom McKenzie have been named the winners of the Institute of Economic Affair’s Breakthrough Prize for their individual “nest egg” funds proposal.
Under the proposed new policy, students and universities “would gain from a liberalised risk-sharing pricing system that makes them partners – working together to improve graduates’ career prospects”.
The winning entry is titled EDegg: The EDucation, Enterprise and Giving-back Grant.
“Without costing the government a penny in additional expenditure EDegg provides a nest egg of £20,000 for each 18-year old,” the IEA said.
The authors argue that the policy would ensure lifetime learning, as the £20,000 “doesn’t need to be used at age 18, and encourages more competition among educational institutions, which would rely on post-graduate income payments and therefore become more invested in their students’ long-term success”.
Ainsworth and McKenzie have estimated that the move would free up the £10.6bn that government loses on student loans and the £2.7bn collected by the Apprenticeship Levy.
The award, which sought to find the best entry outlining a single meritocratic policy, was judged by a panel including entrepreneur Richard Koch and IEA director General Mark Littlewood.