Yesterday’s briefing by the Institute for Fiscal Studies (Higher Education Funding in England: Past, Present and Options for the Future) was covered in the same way by most of the national press. “Three quarters of graduates will never pay off student debts” ran the headline the Independent. Coverage in the Times was almost indistinguishable. The Mirror did little more than capitalise its NEVER, and the Telegraph headline merely framed the 77.4% figure as “almost eight in ten.”
For journalists, it’s the obvious way into a complex story, a hook that ostensibly captures the current system’s flaws and rank unfairness. What better evidence of a broken model than millions of graduates weighed down with debt they’ll never earn enough to repay?
But there’s a danger that the terms of the much-anticipated national debate (as called for by Damian Green last week) will be shaped too narrowly by this statistic. While some evidence suggests that students graduating into higher levels of debt feel more anxiety than those in previous generations, the report offers other kinds of evidence that should arguably have a greater bearing on public thinking.
Indeed, to some extent, the unrepaid bit of a graduate’s debt embodies the funding model’s most progressive element. Because it kicks in when a graduate’s earnings are too low for repayment to be deemed possible, it’s effectively the government’s subsidy for HE, a solitary concession that universities might just be a public good as well as a private one. Jo Johnson hints at this when he talks about “a vital and deliberate investment in the skills base of this country”.
The problem is that the more substantive defects of the current system are trickier for newspapers to distill into a few big-font words on the front page. Take the “back-door” freeze on graduates’ opening repayment level. This not only contravened assurances that the threshold would rise with inflation, but we now learn that it costs students an average of more than £4,000 each. As the IFS briefing note explains, this is because the impact of the freeze is permanent. Over the five year period to which it initially applies, the long-run taxpayer cost is reduced from £7 billion to £5.9 billion. If extended for another five years, the government saves a further £700 million. Middle earners are hit hardest.
The 6.1% interest rate that some graduates will face come September is equally difficult to justify. For high earners, the use of RPI + 0–3% (rather than CPI + 0%) increases lifetime repayments by almost £40,000 in today’s money. A blog from Million Plus’s CEO uses adjectives like “staggering” and “usurious”.
We also need to be more mindful of those who don’t fall into the government’s go-to definition of a ‘student’. While recruitment holds firm among the young, full-time cohort, the same cannot be said of part-time or mature students. Many commentators have explained why we should avoid looking at HE participation through such a conveniently narrow lens, but policy discourse doesn’t budge, and the sector’s part-time and mature students remain largely invisible.
Claims about the graduate premium, such as Jo Johnson’s that “a degree is worth on average £250,000 in higher lifetime earnings for a woman”, should always be accompanied by an acknowledgement that subject-by-subject differentials are enormous. Other broken promises – on maintenance grants, on nurses’ bursaries – must be central to any national debate. Perhaps IFS’s most damning observations is that “incentives for universities to provide high-quality courses in return for the money they receive are surprisingly limited.”
As David Kernohan notes, the briefing should allow the sector to take a more nuanced and long-term view on HE funding in the aftermath of a heated election campaign. Our students deserve nothing less. The immediate focus of the press has been on the proportion of graduates who are projected never to earn enough that their debt is paid in full. But beneath the headlines lie a series of issues that more directly impact on equity, and potentially present greater long-term threats to students’ participation and the sector’s sustainability.