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Interventionism is suddenly all the rage with the Westminster Conservative government, and higher education is feeling the impact as new policies and legislation are brought to bear on the sector, writes Johnny Rich, Chief Executive of Push and of the Engineering Professors’ Council.
Mike Boxall, an independent researcher and consultant on higher education policies and strategies, and a senior adviser to PA Consulting, considers the emerging post-COVID world and its implications for the future of universities. His blog is based on a paper published recently by PA Consulting, and co-authored with its HE lead, Ian Matthias.
The government has miscalculated the cost of the students loans scheme, and now students from the poorest backgrounds are likely to pay the price for making the system sustainable, warns Lee Elliot-Major, chief executive of the Sutton Trust.
The higher education funding reforms in 2012 promised much. Ministers said there would be no up-front costs for students from low income backgrounds, and their money to spend while at university would be increased through a combination of bursaries, grants and loans. Though debts would be greater, the repayment terms ensured that former students on lower incomes would have lower repayment rates than under the previous arrangements.
But these features have turned out to cost more than anticipated, and so the government has announced measures to make higher education finances more ‘sustainable’. Notably they include freezing the repayment threshold at £21,000 for five years and replacing means tested maintenance grants with means tested loans.
Research published by the Sutton Trust in September found that the repayment threshold freeze will cost the average borrower an extra £2,800, a figure that only rises for low earning graduates who are more likely to be repaying their debt across the 30 year repayment period.
In addition, we found that borrowers from less advantaged homes who would have been eligible for maintenance grants will see even bigger increases in average repayments: their average debt will rise to over £50,000, a burden that will be especially heavy for those that don’t secure high-paying jobs.
Considering the Prime Minister’s target of doubling the number of disadvantaged students in higher education by 2020, any change to student loans that could hinder access should be treated with caution. Yet by the Government’s own admission in their recent equality analysis , the impact of the threshold freeze and the abolishment of grants could tip the balance for many students from low and middle income homes and put them off higher education altogether.
These new measures mean that student loans are now a much less attractive deal, particularly for those from low-income homes. Students may still decide they have little choice but to go to university, so participation may still increase, but they may elect to study part-time or intermittently so that they can work and reduce debt, perhaps choosing their second or third best course if it has lower fees or allows them to live at home.
What is especially worrying is the likely effect these changes will have on part-time and mature students. Participation rates for these groups have declined substantially since the increase in tuition fees and these new measures are likely to compound this even further. This is a major problem for social mobility since part time and mature study offers a ‘second chance’ route for many students.
The reality is that the Government has miscalculated the levels of repayments it will get from its student loans under the new fees system. Rather than penalising poorer students, it should have a fundamental review of the repayments system. We need long term solutions not a short term fix, otherwise higher education might not become the powerful driver of social mobility that it should be.
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