Higher education is a route out of poverty, but a government loan cap would block it

For Claire Callender, proposals which limit eligibility to student loans undermines recent rhetoric around levelling-up

Claire is professor of higher education policy at Birkbeck and professor of higher education studies at UCL Institute of Education.

In 2019-20, 95 per cent of full-time undergraduate students took out a tuition fee loan and 91 per cent took a maintenance loan.

Our research shows that all but the very wealthiest of students depend on loans to fund their higher education. Without loans, university is simply unaffordable, except for the rich. Yet the government is considering restricting access to student loans for those with low GCSE English and maths grades. This would hit primarily one student group – the most disadvantaged.

A regressive cap

This potential restriction on loan eligibility is a cap on student numbers, through the backdoor. But it is not a cap on all potential students, just the most deprived. Around a half of disadvantaged young people get grade 4 in English and maths GCSE compared with the national average of 71 per cent. And this attainment gap is growing. Others getting disappointing results live in some of the poorest regions in England, are more likely to be pupils from Black and White ethnic categories and to be young men.

The government’s own analysis confirms this policy would disproportionately affect students who are black and from ethnic minority groups, and those eligible for free school meals – coming from the poorest families.

A minimum university entry requirement signals an abandonment of any government concern about widening higher education participation, equality of opportunity, and nurturing social mobility – despite them claiming otherwise. It will cement existing social divides amongst young people at a time when these divisions are widening rather than narrowing. We already know that Covid has hit the educational progress of the most disadvantaged, most of all. This requirement will close off yet more opportunities to thousands of aspiring young people.

Levelling up?

Limiting eligibility to student loans, and with it a university education, flies in the face of the ambitions of other government policies – undermining them. The entry requirement will exacerbate regional inequalities. It makes a mockery of the “levelling-up” agenda, the central role universities can play in this, and the government’s desire to tackle inequalities.

It could undermine the government’s skills agenda too, and their appeal for more flexible higher education provision which meets the needs of employers. The requirement will hit under 25 years olds with poorer prior educational attainment who are seeking a second chance.

Key questions

For many such prospective students, higher education is a route out of poverty, poorly paid jobs, and an opportunity to re-skill and upskill in an ever-changing labour market. And how does this requirement fit with the much-hailed lifelong loan entitlement which is central to the government’s Lifetime Skills Guarantee? The new lifelong loan seeks to provide financial support to help people get the skills they need when they want. Eventually, they will replace the existing system of student loans.

So we can assume the new and old loans will have similar eligibility criteria? One aim of the lifelong loan entitlement is to encourage the take-up of more vocational and skills-based higher education courses, courses which in the past have tended to attract less academically orientated students. Will the target group for the lifelong loan entitlement qualify for the new loans, given that their prior academic achievement may well be lower than those taking the more traditional three-year full-time degree? Or is that they can get a loan so long as they do not take a degree course?

There are, of course, downsides to student loans with mounting levels of debt on graduation, accruing interest, and repayments that feel never-ending. But given the high tuition fees and in the absence of alternative sources of financial support, loans allow access to higher education among those who otherwise would be unable to go to university. Eligibility should not be restricted even more.

4 responses to “Higher education is a route out of poverty, but a government loan cap would block it

  1. That’s just the start – once they start using PROCEED to defund courses they will make it more risky to take WP students.

    Having said that – do we really want courses where only 7/10 finish and 5/10 get a graduate job?

  2. This is a good summary of the case against minimum eligibility requirements and my first instinct is to agree that any such policy will hit the most disadvantaged. But I have three reservations:
    – There is a risk that the argument fails the “reasonableness test”. I admit I have not seen any research into the issue, but I suspect if you asked an ordinary person in the street whether there should be minimum requirements for admission to university, they would say yes – indeed they may well believe they already exist. We can of course argue that socio-economic factors mean such a policy hits those from a disadvantaged background, but it’s hard to get away from the fact that a base level of previous attainment feels reasonable as a test of access to higher study.
    – It is possible that some benefits to widening participation could accrue from creating a reason for universities to engage with schools to help their pupils achieve. Mary Curnock Cook wrote an interesting piece on the HEPI site about this (https://www.hepi.ac.uk/2022/02/24/gcse-thresholds-for-eligibility-for-student-loans-could-transform-access-and-participation/) – pointing out that setting the thresholds at Level 2 makes much more sense than at Level 3.
    – The DfE’s Augar response poses questions about both minimum eligibility requirements and student number controls. Government seems more genuinely willing to hear views on these than is often the case – there is a real possibility that the consultation will have an impact, but it surely seems unlikely that ministers will drop both ideas. My belief is that number controls should be resisted on principle and an acceptance of minimum eligibility requirements – on the right terms – may be a pragmatic price to pay.

  3. Base levels of prior attainment have always been set by autonomous institutions, since the 2004 Act in a competitive market regulated by the state – first HEFCE and OFFA, currently OfS. Many criticise marketised expansion, but it has undoubtedly widened participation and offered access to higher paid careers for hundreds of thousands of people from disadvantaged backgrounds – but if we are going back to state planning we can at least address the scandalous misallocation of public funds that supports HE for middle-class advantaged young people e.g. taking degree courses in Art History or Classics that will literally never lead to careers that provide good LEO outcomes. It’s good that the state wants to take back control of how our HE investment is directed, but I am at a loss to see why working class taxpayers would be asked to fund a system they are denied access to by Ministers’and regulators’ arbitrary decisions about who is deserving and who is undeserving.

  4. Is it not possible to provide either a preface or footnote to articles such along the lines of:

    “This article with associated data and assertions refers solely to Higher Education for students domiciled in England prior to their study. References to “government” are to the UK government. HE is devolved in the UK. The systems of funding for students domiciled outside of England are different and subject to decisions of the devolved legislatures and governments”?

    I find it annoying when articles about eg Scottish HE always have to be explicit. I’ve never seen an article in a UK news source with the headline “Government reaffirms commitment to no fee loans in line with recent electorate views” without the word “Scotland” being added to avoid heart attacks in Whitehall. Surely articles exclusively about England should be similarly clear to avoid heart attacks north of the border when reading opening statements like “95 percent of full time undergraduate students took out a tuition fee loan”, a meaningless statistic unless the “England” qualifier is also added?

    It’s a shame to spoil what is otherwise a good article by leaving the scope so vague.

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