It’s time to review higher education funding in England

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The 2017 General Election threw up many surprises. For the higher education sector, what caught us most off guard was the effect of the Labour Party’s manifesto promise to reintroduce maintenance grants for university students and to abolish university tuition fees – a policy widely seen as one of the key factors in increasing youth-turnout and enabling Labour to take 30 new seats.

A problem with abolishing tuition fees – frequently pointed out by Corbyn’s critics – is that it is not, in socio-economic terms, very progressive. Under the current system, only the highest earners pay back their entire loan with interest. As the IFS points out, the wealthiest graduates would be the biggest winners of scrapping fees. In addition, attempts to control costs may lead to limitations on student places, thereby excluding some who could benefit from the life changing experience offered by university education.

Universities need proper funding if we are to continue to deliver the high quality education that we aspire to. If our funding is solely through fees, inflation and growing costs will lead to an increased debt burdens on students and graduates.

It’s no good arguing that this isn’t like ‘other debt’. To a student, it is real debt. A bank looking at mortgage applications factors in student loan repayments, and for those wishing to follow master’s programmes both undergraduate and master’s loans have to be paid together, further compounding the challenge.

I raised concerns when the higher fees were first introduced about the potential impact on social mobility. Since then, research by Professor Claire Callender and Professor Geoff Mason has suggested that debt aversion has the potential to put off young people from the poorest socio-economic backgrounds from applying to university.

Labour estimates that abolishing tuition fees and reintroducing maintenance grants would cost £11.2 billion per cohort. Instead of focusing on the extremes (of fees or no fees) perhaps we should examine how that money could be used to fund a more balanced HE system? Crucially, we need to start looking at the totality of fees and maintenance support.

Don’t forget maintenance

Reducing tuition fees will not magically ensure that higher education is accessible for all groups across society. Here, Labour’s proposal to reintroduce maintenance grants for the poorest students deserves further attention.

Grants were abolished subsequent to the fee increase of 2012, and replaced with larger means-tested loans for those who would have previously qualified (adding further to their burden of debt). The reintroduction of grants would recognise that for most students, and especially for those in London, one of the most significant barriers to attending university is the cost of living which, with spiralling rents and inflationary pressure on food prices, is often more than tuition fees. Such grants could guarantee a minimum level of support for all, with additional support means tested.

At my university, one of the main reasons for student withdrawal is financial difficulties. The demand on our hardship support is ever growing. This is in addition to the many students that take on substantial part-time work alongside their full-time studies. Maintenance support is as important, if not more important, than the question of tuition fees.

The majority of students do not object to making a contribution to the cost of their education, but it’s the scale of the contribution that matters. A better balance between the student (or graduate) and state acknowledges that students will benefit financially from their degree, whilst also acknowledging the wider public good of higher education: social mobility, civic engagement, productivity, and innovation.

Finding the balance

The economic argument for widening access to higher education is self-evident. The UK is facing a major skills crisis, with some of the worst productivity levels in the OECD and more vacancies recorded than ever before. Skills shortages abound across sectors as diverse as engineering, hospitality and social care. On top, we have the lowest level of unemployment since 1975, and we have yet to feel the real economic impact of Brexit.

It is sadly too often underreported how tuition fee rises have contributed to the collapse of part-time higher education in England, a drop of 60% in all between 2006 and 2016. The majority of part-time learners are mature students with greater financial and family commitments than ‘traditional’ students, which makes them less willing to take on additional significant debt. A reduction in fees (coupled with a more flexible loan system with a pay-per-module structure) could help revive part-time higher education. This would not only allow those in work to fill our skills gaps, but also provide opportunity for those who were not able to go to university straight out of school. A reinstatement of the ‘part-time premium’ funding could also help universities meet the additional costs of educating students on a part-time basis, and stem the closure of part-time courses.

The skills crisis is not just affecting the economy; it is placing strain on our public services. There is a shortage of around 20,000 nurses in the NHS; and with over a third aged above fifty the problem is set to grow. Many nursing applicants are also mature students. Although most nurses will not pay back their student loans in full, they still have the burden hanging over them whilst providing an indispensable public service. This could be ameliorated if the Government considered fee forgiveness schemes for those who continue within the profession for a certain amount of time. As it happens the Conservative manifesto considered doing just this for teachers, in order to tackle the problem of 30% of new teachers leaving after five years.

It’s clear to me is that young people have, in large numbers, rejected continuity of the current system. We also know that the current funding structure is being quietly rejected by potential mature applicants. The job is now for the universities sector and policy makers to work together to rebalance the system to meet the needs of learners, our economy, and our public services.

University education is costly, and that funding needs to rise with costs if the UK is to retain both its high quality and levels of accessibility. The model needs to ensure that benefits of higher education to the individual, state, and employers are recognised. It needs to consider funding ‘in the round’, including maintenance and living costs. And it must not solely think of the needs of full-time learners, but also encourage a revival of part-time study, in order to improve employee upskilling in an ever changing world.

1 thoughts on “It’s time to review higher education funding in England”

  1. Phil Chapman says:

    For some time I held the view that the principal challenge of the current arrangement is explaining to a prospect that it isn’t a real loan or even a real debt, compared to commercial borrowing, but in reality a graduate contribution through a marginal tax rate. However, as some predicted back in 2011/12, the presentation of funding as loans, debts and repayments has done sufficient damage and the current arrangement looks even more politically unsustainable than economically sustainable. My hope now is that ideas from the sector for a progressive funding arrangement generating social mobility, creating social capital and underpinning quality higher education get a fair hearing amid all the party political dogma and misunderstanding.

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