A ‘co-operative mutual fund of communal interest’ for student finance?

One of the significant issues that our research into co-operative higher education has understandably raised is the extent to which it would be (must be?) regulated by the legislative framework for higher education in the UK. Depending on how you view it, one of the ‘benefits’ of working within the regulatory environment is that students are able to apply for loans. However, many participants in the research said they would prefer to find an alternative method of funding co-operative higher education based on the idea of ‘common ownership’, ‘commonwealth’ and mutualism.

At our meeting with lawyers to discuss the HE and Research Bill, we noted that the Bill includes the provision to introduce a method of ‘Alternative Payments’ (sections 78-79). The House of Commons Briefing Paper (pp.39-40) is perhaps the best summary of what is included on this matter in the Bill. What it amounts to is an alternative fund specifically set up to be Sharia-compliant, managed by the Student Loans Company, acting as agents on behalf of the fund.

The idea of a Sharia-compliant form of student finance was put out to consultation by the government in 2014 because they recognised that “student loans issued after September 2012 bear a real rate of interest above inflation and concerns have been raised that some religious groups, particularly Muslims, may feel that the charging of such an interest rate is incompatible with their beliefs.” Following the consultation, the government settled on the proposal of a ‘Takaful fund’. Here’s how they describe it. It’s worth quoting in full:

“The suggested Alternative Finance model’s underlying principle is one of communal interest and transparent sharing of benefit and obligation, with the repayments of students participating in the fund being used to provide finance to future students who select to join the fund. This ensures that all members of the fund benefit equally from it…

… The finance product the Government identified is based on the ‘Takaful’ structure used in Islamic finance to allow groups of people to cooperate to provide mutual finance assistance to members of the group. This type of mutual fund model is familiar to Sharia scholars and many UK Muslim families, who use a similar concept to raise funds between cooperating relatives.

Students participating in the fund would not be borrowing money and paying it back with interest to a third party, which would not be compliant with Sharia law. Instead, the Takaful fund will be established with an initial amount of money that can be donated to the fund or on the basis of Qard Hasan (interest-free loan) and based on a concept of mutual participation and guarantee.

Students will obtain finance from the fund by applying in a similar manner to the conventional loan. The contract will be based upon a unilateral promise guaranteeing that they will repay a Takaful contribution – which is perceived as a charitable contribution from a Sharia perspective for the benefit of the members of the fund. Monies will be released once the contract is signed. Repayment will be made to the fund once they are in employment and earning above the repayment threshold, which would be set at the same level as for traditional student loans.

The contribution paid back into the fund by the student would help future students benefit from the fund, allowing them to complete their studies as the original student did. The mutual basis of this structure, with members (borrowers) of the fund helping each other to attend higher education, would make this model acceptable under Sharia-law. This is because the lending/borrowing relationship which results in a payment of interest by the students to the Student Loans Company does not exist in this model.

The student finance fund, i.e. the Takaful fund, would be managed by a fund manager (in this case the Student Loans Company under the Islamic finance principle of Wakala (agency) for a specified fee. The fund would be completely segregated from the traditional student loans to ensure full compliance with Sharia in the whole cycle of the fund.”

Although the principle driver behind this new alternative fund is to accommodate Muslim students, the way it is then translated into the White Paper and eventual HE&R Bill is stripped of any reference to being Sharia-compliant because it is the values and principles on which the fund is established and operates, rather than specific religious beliefs that will define it, hence why it’s referred to as ‘Alternative Finance’ and not ‘Sharia-compliant Finance’.

Those principles, according to Wikipedia are the following:

  • Policyholders cooperate among themselves for their common good.

  • Policyholders contributions are considered as donations to the fund (pool)

  • Every policyholder pays his subscription to help those who need assistance.

  • Losses are divided and liabilities spread according to the community pooling system.

  • Uncertainty is eliminated concerning subscription and compensation.

  • It does not derive advantage at the cost of others.

“Theoretically, takaful is perceived as cooperative or mutual insurance, where members contribute a certain sum of money to a common pool. The purpose of this system is not profits, but to uphold the principle of “bear ye one another’s burden”.”

The Institute of Islamic Banking and Insurance state that:

“takaful is founded on the cooperative principle and on the principle of separation between the funds and operations of shareholders, thus passing the ownership of the Takaful (Insurance) fund and operations to the policyholders. Muslim jurists conclude that insurance in Islam should be based on principles of mutuality and co-operation, encompassing the elements of shared responsibility, joint indemnity, common interest and solidarity.”

As the government describe in their report on the initial consultation, this is a co-operative mutual fund of communal interest, and as described in the HE White Paper (pp.59-60), the fund will be open to anyone and result in exactly the same payments as the existing loan system, albeit established on different principles:

“To ensure participation and choice are open to everyone, we will introduce an alternative student finance product for the first time. This will be open to everyone and will not result in any advantage or disadvantage relative to a student loan, but will avoid the payment of interest, which is inconsistent with the principles of Islamic finance. We plan to legislate for the Secretary of State to offer an alternative student finance product alongside his current powers to offer grants and loans.”

Illustration from the government's consultation response document.
Illustration from the government’s consultation response document.

The Equality Analysis of the HE&R Bill (p.36), also recognises that while it is principally of interest to Muslim students, “No particular group of students should be worse off as a result of the policy”, likewise underlining the fact that this ‘alternative product’ may appeal to anyone.

“Overall, the policy addresses a potential barrier to entry faced by some potential students, and should lead to an increase in higher education participation. No particular group of students should be worse off as a result of the policy, and the most significant gains will be felt by Muslim students.”

The interesting question this raises for me is to what extent will the co-operative movement ‘endorse’ this form of State-funded method of student finance, given the 4th principle of ‘autonomy and independence’ (usually meaning from the State)? How compatible is it with established co-operative principles of mutualism? I see that the International Cooperative and Mutual Insurance Federation (ICMIF) promote Takaful insurance using the .coop domain name. This suggests that existing Takaful funds are recognised as operating according to the Co-operative movement’s values and principles. The question remains to what extent the new government fund will actually be a ‘co-operative pool’ for the ‘common good’ of its ‘members’? On the face of it, if I were a student deciding which form of State finance to apply for, I would choose the ‘Alternative Finance’ and become a member of the ‘communal pool’, if only because it sounds more ethical.

Mass Intellectuality and Democratic Leadership in Higher Education

Reblogged from Richard Hall’s website:

Working with 20 co-authors, Joss Winn and I have just submitted the manuscript for Mass Intellectuality and Democratic Leadership in Higher Education. The edited collection forms part of Bloomsbury Academic’s series on Perspectives on Leadership in Higher Education. Assuming that the review process goes to plan, the book is slated for publication in early 2017.

The original summary, description and key features of the book are noted below. The proposed table of contents is appended thereafter.

Summary

Drawing on the activism of academics and students working in, against and beyond the neo-liberal university, this book critiques academic leadership through the concept of mass intellectuality, with an analysis of the crisis of higher education and the alternative forms that are emerging from its ruins.

Description

Higher education is in crisis. The idea of the public university is under assault, and both the future of the sector and its relationship to society are being gambled. Higher education is increasingly unaffordable, its historic institutions are becoming untenable, and their purpose is resolutely instrumental. What and who have led us to this crisis? What are the alternatives? To whom do we look for leadership in revealing those alternatives?

This book brings together critical analyses of ‘intellectual leadership’ in the University, and documents on-going efforts from around the world to create alternative models for organising higher education and the production of knowledge. Its authors offer their experience and views from inside and beyond the structures of mainstream higher education, in order to reflect critically on efforts to create really existing alternatives. In the process the volume asks is it possible to re-imagine the University democratically and co-operatively? If so, what are the implications for leadership not just within the University but also in terms of higher education’s relationship to society?

The authors argue that mass higher education is at the point where it no longer reflects the needs, capacities and long-term interests of global society. An alternative role and purpose is required, based upon ‘mass intellectuality’ or the real possibility of democracy in learning and the production of knowledge.

Key features

  1. The book critiques the role of higher education and the University as an institution for developing solutions to global crises that are economic and socio-environmental. In this way it offers an analysis of the idea that there is no alternative for higher education but to contribute to neoliberal agendas for economic growth and the marketisation of everyday life. The restrictions on the socio-cultural leadership that emerge inside the University are revealed.
  2. The book describes and analyses concrete, alternative forms of higher education that have emerged from worker-student occupations, from academic engagements in civil society, and from the co-operatives movement. These projects highlight a set of co-operative possibilities for demonstrating and negotiating new forms of political leadership related to higher learning that are against the neo-liberal university.
  3. The book argues that the emergence of alternative forms of higher education, based on co-operative organising principles, points both to the failure of intellectual leadership inside the University and to the real possibility of democracy in learning and the production of knowledge. The concept of ‘Mass Intellectuality’ as a form of social knowledge that is beyond the limitations of intellectual leadership inside the University is critically developed in order to frame socially-useful responses to the crisis.

Contents

Introduction

  1. Mass Intellectuality and Democratic Leadership in Higher Education ~ Richard Hall and Joss Winn

Section One: Power, History and Authority

  1. Pedagogical Labour in an Age of Devalued Reproduction ~ Stevphen Shukaitis
  2. Co-operation, leadership and learning: Fred Hall and the Co-operative College before 1939 ~ Tom Woodin
  3. Academic Voices: from Public Intellectuals to the General Intellect ~ Mike Neary
  4. Openness, Politics and Power ~ Martin Paul Eve

Section Two: Potentialities

  1. The (im)possibility of Mass Intellectuality: Viewing Mass Intellectuality through the lens of the Brazilian Landless Movement ~ Joyce E Canaan
  2. Still spaces in the academy? The dialectic of university social movement pedagogy ~ Eurig Scandrett
  3. Bradford’s Community University: From ‘Constellations of Knowledge’ to Liberating the ‘General Intellect’? ~ Jenny Pearce
  4. Aesthetic Education, Critical Pedagogy and Specialist Institutions ~ Jonathan Owen Clark and Louise H. Jackson

Section Three: Praxis

  1. Six Theses In, Against and Beyond the University ~ Birmingham Autonomous University
  2. Reconciling mass intellectuality and higher education: lessons from the PPE experience ~ Joel Lazarus
  3. Somewhere Between Reform and Revolution: Alternative Higher Education and ‘The Unfinished’ ~ Gary Saunders
  4. Permaculture education as ecology of mind: the head, hands and heart of transformation ~ Tom Henfrey
  5. Mass Intellectuality from the Margins ~ Sara C. Motta

Conclusion: Politics, Aesthetics and Democracy

  1. Practicing What We Preach? Writing and Publishing In, Against and Beyond the Neoliberal University ~ Gordon Asher

Symphony of voices

A scene from Wings of Desire (1987) by Wim Wenders.

“The film is about invisible, immortal angels who populate Berlin and listen to the thoughts of the human inhabitants and comfort those who are in distress. Even though the city is densely populated, many of the people are isolated or estranged from their loved ones.”

[00:00:00 – 00:04:49 No subtitles]

[00:04:50 Old Man stops on stairs] “Tell me, muse, the storyteller…he who has been thrust to the edge of the world…both an infant and an ancient, and through him reveal Everyman. [continues walking]

With time, those who listened to me became my readers. They no longer sit in a circle, but apart…and one doesn’t know anything about the other. [sits down]

I’m an old man, with a broken voice…but the story still rises from the depths… and the slowly opened mouth…repeats it as clearly as it does powerfully. A liturgy for which no one needs to be initiated… to the meaning of the words and sentences.”

What we leave behind


Book coverMy dad, Nigel Winn, died quite suddenly of cancer in 2006 aged 56. Since his death I have been meaning to collect his writing and publish a selection of his poetry. It’s taken me ten years to make time for this, in between having a daughter, getting married, building a house, chasing and holding onto employment and also trying to come to terms with the loss, too.

Dad left behind a collection of poems, a short play and other pieces of writing. He was a bricklayer and carpenter most of his life but started writing actively during the period 1996-2006. During that time, he studied for a BA in English Literature at the University of Lincoln, where he gained a First Class degree. He went on to teach at the university, and was popular among students. Following his death, colleagues established the annual Nigel Winn Memorial Prize for Creative Writing.

His work is quite autobiographical and therefore especially meaningful to those who were close to him. I used Lulu to self-publish this selection of his poetry. It’s very satisfying for me and my family to have a physical copy of his published work and I think that people who knew Nigel may like to purchase a hardback copy of the book, too. It is priced £8.93 + postage which is the lowest price available to me. I make £0.06p on every copy sold because Lulu won’t allow me to reduce the author’s profit to £0 for some reason. A PDF proof of the book can be downloaded here. Thank you for reading it. He was a really good man.

Nigel Winn
Nigel Winn, Sutton-on-Sea, 2005.

Learning to listen

For the past six months, I have been learning to play the (classical) guitar. I played electric guitar for a couple of years when I was a teenager and have tried to return to playing a few times since then. This time, I have the benefit of a superb teacher who has reminded me (now from the point of view of being a student), how inspiring and encouraging a teacher can be who still finds enjoyment in what they teach and wants to pass that excitement and curiosity onto others. I am approaching it as an education in music, with the guitar being the instrument through which I hopefully come to understand and appreciate music more fully. It seems to be working.

I am not studying towards particular music grades, but it is interesting to see what pieces of music are aligned with each grade. The piece below is one of the select few to be included in the syllabus/repertoire for Trinity’s Performance Diploma. It is for the Fellowship level (FTCL), “equivalent in standard to a postgraduate course at a conservatoire or university.” I really like a number of pieces on the FTCL list, but Sonata for Guitar, Op. 47 (1976) by Alberto Ginastera, stands out as a current favourite. The video below is interesting because it shows the complexity of the score as the music is being played. I may never be able to play something as difficult as this, but that’s not really the point. I’m learning to listen as well as play and compose, and that has already opened up a new world to me.

‘A relationship with the world that provides freedom to actually look at things’

“Most people go to films to get some kind of hit, some kind of overwhelming experience, whether it’s like an amusement park ride or an ideological, informational hit that gives you a critical insight into an issue or an idea. But for those few people who feel they need a reprieve occasionally, who want to cleanse the palate a bit, whether for spiritual or physiological reasons, these films seem to be somewhat effective.

I’ve never felt that my films are very important in terms of the History of Cinema. They offer a little detour from such grand concepts. They appeal primarily to people who enjoy looking at nature, or who enjoy having a moment to study something that’s not fraught with information. The experience of my films is a little like daydreaming. It’s about taking the time to just sit down and look at things, which I don’t think is a very Western preoccupation. A lot of influences on me when I was younger were more Eastern. They suggested a contemplative way of looking – whether at painting, sculpture, architecture, or just a landscape – where the more time you spend actually looking at things, the more they reveal themselves in ways that you don’t expect.

For the most part, people don’t allow themselves the time or the circumstances to get into a relationship with the world that provides freedom to actually look at things. There’s always an overriding design or mission behind their negotiation with life. I think when you have the occasion to step away from agendas – whether it’s through circumstance or out of some kind of emotional necessity – then you’re often struck by the incredible epiphanies of nature. These are often very subtle things, right at the edge of most people’s sensibilities. My films try to record and to offer some of these experiences.”

Source: Peter Hutton: The Filmmaker as Luminist

Peter Hutton’s At Sea was voted #1 of the best 50 avant-garde films made during 2000-2009.

Update 16th July: I have learned that Peter Hutton died on 25th June 2016. I didn’t know him personally but I did correspond with him in 1999 for a screening I organised of two of his films. Of all the work I screened around that time, his was the most influential on me and inspired a lot of the silent footage that went into a film I made a year or so later.

Website for Co-operative Leadership for Higher Education

I mentioned that Mike Neary and I received funding for a new project on ‘Co-operative Leadership for Higher Education’. This is just a note to say that the project has its own website which you can subscribe to:

http://coophe.blogs.lincoln.ac.uk

Recent posts outline the project, relate it to our previous project to develop a framework for co-operative higher education, and look at Edwin Bacon’s work on ‘neo-collegiality‘ and Paul Bernstein’s work on workplace democracy.

The value of student loans

Andrew McGettigan, has published another useful post on the complexity of student loans. They are complex, not only for the government to model, but also for the borrower to understand how much they will repay and the actual value of the money they repay. The cost of something worth £9000 today is not the same as paying £9000 for it in ten or thirty years time. Andrew makes that clear in an earlier post.

A website like this one, can help us calculate the effect of inflation on the value of money. It tells me that spending £9000 in 1986 would have bought me the same as spending £24,629 today. In 30 years, the value of money has decreased by nearly two-thirds due to 173% inflation. Inflation in the last 30 years has averaged 3.4%, according to the Bank of England’s inflation calculator. On that basis, £9000 in cash today will be worth (i.e. have the value of) £3300 in 2046.

In late 2013, I was curious about what the actual total amount of money repaid on full student tuition and maintenance loans would be if I were 18yrs old and planning to go to university in London (where I did my undergraduate degree). When I was 18yrs old, I wouldn’t have asked this question, but now with a fixed term mortgage, where I’m told exactly what I’ll pay back (about double what I borrow), and a young daughter who will probably be going to university in a few years, I’ve become more cautious about long-term repayments on large amounts of money.

In 2013, I went onto the Directgov website and used their student repayment calculator and you can see that the total amount repaid is estimated by the government to be shy of £160,000. Note the ‘About this calculation’ section at the bottom:

Student Loan Repayments (2013)
Student Loan Repayments (2013)

Again, what the calculator does not do is tell you that the value of money goes down due to inflation, so £160K today is not the same amount of money-value as £160K paid back over 30 years.

I just went onto the Directgov website to use their repayment calculator again, but the website is down, perhaps in response to more good work that Andrew did a few weeks ago on ‘Calculator Caveats‘.

A repayment calculator that is working today is on the Compete University Guide website. Punching in the same numbers indicates that I would pay back £81,286 over 30 years, not £160K. However, under the notes they provide, they say the following:

“The level of inflation is difficult to predict, and will vary over the repayment period. Instead of trying to estimate it, we have taken a different approach:

Inflation will affect the fees, the outstanding loan, the interest due, earnings, and repayments to the same extent.

It is therefore not necessary to calculate the interest charges due to inflation. Instead, all monetary figures, including future earnings, are presented in today’s money.”

As a borrower, I’m none the wiser really. What they seem to be saying is that the £81K figure isn’t really what I’ll be paying back because no-one knows what the value of money (and therefore the value of a wage) will be over a given time. I guess it must be somewhere between £81-160K. It certainly isn’t the £44K that has been discussed in the news recently, stating that English student debt is now the highest in the English-speaking world.

Co-operative higher education conference paper and poster

Mike Neary and I presented a conference paper today at the Co-operative Education conference. You can find it on this page.

We’d really appreciate comments on the framework we have developed in the paper and is illustrated below.

Framework for Co-operative Higher Education (click to enlarge)
Framework for Co-operative Higher Education. Design by Sam Randall, student at University of Lincoln.