Login

close

Login

If you are a registered HEi-know user, please log in to continue.


Unregistered Visitors

You must be a registered HEi-know user to access Briefing Reports, stories and other information and services. Please click on the link below to find out more about HEi-know.

Find out more
HEi News Roundup live

Live higher education news roundup

HEi-think: Reasons to be worried about the future of graduate employment

New figures suggest that more graduates are finding employment or going on to further study. But there are trends within the statistics that raise questions about the direction of the graduate labour market and that could cause concern for the future, warns Stephen Isherwood, Chief Executive of the Association of Graduate Recruiters .

HEi-think: HE needs practical tools to navigate turbulent times

As UK higher education enters a period of unprecedented change and uncertainty, Tony Strike, University Secretary and Director of Strategy at the University of Sheffield, says that more than ever before universities need reliable practical tools to guide them through the challenges they face.

UK universities lose ground in latest QS world rankings

Many UK universities have fallen further behind international competitors in the latest edition of the QS World University Rankings.

“Glacial” progress on closing the gender pay gap, report finds

Closing the higher education gender pay gap will take 40 years, a new report suggests.

HEi-think: Ministers should not break their promises on student finance

University of Worcester Pro Vice-Chancellor Students Ross Renton examines the pros and cons of the options laid out in the government's consultation on the student loan repayment threshold.

 

When is a promise not a promise? It would appear it is when we are discussing student finance. Despite commitments during the last government to uprate the £21,000 student loan repayment threshold, the Government has recently been consulting on plans to freeze the threshold.

This consultation included three options. The first was to keep the threshold of £21,000 the same for all post–2012 borrowers until April 2021, this being the most advantageous to the government. The post-2012 students, the first to have to pay the higher rate of tuition fees, were led to believe by the then universities minister, David Willets, that the £21,000 threshold would be reviewed in 2016 and would at worst be index linked. Loan repayments under this proposal will start at a lower salary than expected and include more low earners, increasing the cost of student loans to these students.

The second option was to freeze the repayment threshold for five years for new English domiciled borrowers only. This is fairer to the post-2012 borrowers and the new students would enter an agreement with a clear set of terms. However, this proposal could have the potential impact of putting off debt adverse students from applying to university and possibly those who have accepted places concerned about the increased debt.

The third option was to retain the current policy, with the threshold increased by earnings from 2017 onwards. This would be the most advantageous to students and is consistent with the commitment made by the last government.

The repayment terms of the loan are pivotal in ensuring that the benefits of progressing to HE for those from the most under-represented groups are not outweighed by the burden of higher proportional repayments, which could potentially harm the social mobility of these graduates. Students from low income backgrounds will have increased loans from 2016, when loans replace the grants they would previously have received, leaving them with more to repay back. Those entering HE from the lowest income households will graduate with the highest debts and will also have increased repayment costs, with this group tending to earn less than students from higher income households. They will therefore take longer to repay and be charged more interest.

These issues were explored in the latest Sutton Trust research brief, Unfair Deal, highlighting that a freeze on the repayment threshold for existing students could be unlawful and unenforceable if challenged. Current students who signed up to the system in good faith are estimated in the report to pay an extra, and unexpected, £2,800.

Increasing consumer rights for students has been an important element of HE reforms from both the previous and current governments. Would we expect a bank to materially change the terms of a mortgage part way through the agreement? Fair and reasonable customer-led policy would ensure borrowers were informed of the terms of any loan beforehand and expect these terms to be honoured throughout the agreement. It is for these reasons that the third option, to not freeze the income threshold, should be honoured and any future policy should set out the terms within legislation.

penywise / 123RF
Back