Learning to love the student loan book

There are two ways to argue for more student places in higher education institutions.

The first is easy, just remove the word ‘higher’. So the question is: shall we have some more education?

The second is harder, but has become de rigeur as public spending in general diminishes. On this approach we have to explain why the cost-benefit ratio for more public spending on higher education is greater than competing spending pressures.

Surprisingly, even while the government has accepted a mix of the two arguments, there are higher education detractors from both.

Shall we have more education? No, some say, we want more research. But there is absolutely no reason for anyone to accept that there is a trade off between the two. In fact they have typically risen in common, and fallen in common, reflecting the place of the higher education institution in wider decisions about our economic and cultural future. Does that sound high falutin’? It’s supposed to, actually. We should confidently take this stance when it comes to higher education.

What about the cost-benefit ratio? The graduate premium, the private and the public species, is remarkable. But unsurprising. Our economy needs high skilled graduates. More and more of them. Or we get trapped in a very different economic future to the one that we aspire to.

The argument that the student loan system is unsustainable relies on denying that this is the case. The most important variable by far for determining the cost of student loans to government is future graduate earnings. If they don’t look good, then it is our whole economy that is in trouble and frankly the student loan book is the last of our problems.

Before it becomes unsustainable the low-paid in our society will fall into greater and greater poverty; there will be a hollowing out of jobs from the middle of the labour market; and high skilled industries will depart.

I believe we can imagine a different future for the country. Though I fear the one I’ve just described (and yes there are worrying signs that we might not be resisting it right now).

What is sure is that, if we’re heading that way, then I’ll want public policy to focus on poorer and lower skilled people in our society before I start to panic about graduates.

None of this is to say that we should shut up and accept the bounty from the Chancellor.

Instead it is a challenge to expand higher education again, to do it in a way that doesn’t pile ’em high but provides high quality teaching, that seeks to offer places to people who missed out on higher education when they were young and now may be able to return, that builds routes of learning through from apprenticeships into university.

These are all familiar ideas because people in the sector are already trying to do them. Well, they’ve just got 60,000 more opportunities to offer. The argument has been won, despite the ‘more means worse’ brigade, despite public spending cuts in almost every other sector.

Shall we learn to love the student loan book (and start maximising value so that we can keep winning the argument over and over again)?

3 responses to “Learning to love the student loan book

  1. ‘Our economy’ does not ‘need highly skilled graduates’ because what you predict has already happened/ is happening: ‘our society will fall into greater and greater poverty; there will be a hollowing out of jobs from the middle of the labour market; and high skilled industries will depart.’

  2. Does the UK economy need 60,000 more UGs, or 60,000 more PGs? I’m all for opportunity and aspiration, but why cap it at UG level? Could more be done on the ELQ issue?

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