When the “interim conclusion” to a major review of higher education fees and funding is only slightly longer than the terms of reference that set it up, it’s almost too easy to point out that it’s what is not mentioned that really matters.
But it’s nonetheless notable that the word “maintenance” doesn’t feature within the meagre 2,500 words of jam tomorrow issued in Gavin Williamson’s January 2021 policy hamper. The headline commitment on “lifelong learning loans” may or may not include maintenance, is reported to be being resisted by the treasury, and isn’t slated to begin until 2025 anyway.
We are told that a cut in tuition fees remains on the table. Given all the attention on fees, you would be forgiven for assuming that there are no issues within the system on the maintenance side. But you’d be wrong.
I have a British dream
The last major change to England’s undergraduate finance system was in the 2016 spending review. Grants were converted to (slightly higher value) loans, and support was promised for part-time students – and then never implemented. In an opposition day debate on the changes, forgotten universities minister Nick Boles said that a “party’s attitude towards student finance is a leading indicator of its fitness to govern”.
The following year Theresa May’s “British Dream” speech (croaky voice, falling letters) ushered in what was to become the Augar review. When that review was finally published in May 2019, it contained proposals on debt that are not even referenced in this “interim conclusion”. They could involve:
- Changes to the interest rate (which includes a fairly opaque slider that moves it between 2.6% and 5.6% depending on annual income)
- Changes to overall debt levels (by changing (maximum) fees)
- Changes to the write off period (currently 30 years)
- Changes to the repayment threshold (currently at 25k up from 21k thanks to that Theresa May speech)
But the review wasn’t only about fees and debt. It was supposed to address access barriers and maintenance. During the process, MoneySuperMarket found that the average student leaves university with £3,561 debt in addition to their student loan, and 15 per cent leave with more than £10,000 of additional debt. And NUS’ poverty commission uncovered a whole range of issues facing students at the margins in particular.
To be fair, Augar did propose the return of a small grant for the poorest students to address the level of debt on graduation, in one of the most dispiriting paragraphs of public policy analysis I think I’ve ever read:
We would expect the additional call on public funds from this proposed change to be fairly modest. The cost to the taxpayer of replacing loan funding with grant funding depends on the level of loan repayments that would have been made. As earnings tend to be lower for graduates with lower prior attainment and from disadvantaged backgrounds, that level of foregone loan repayments from students from low-income households is likely to be low.
But as well as the mix of grant, loan and parental contribution, Augar rightly had views on the overall amount that students should get. To do that, you might have assumed that the panel’s DfE secretariat would have looked at the costs facing students to assess whether the level of maintenance support on offer to students was sufficient – and you might have assumed that to make that assessment, some research would have been carried out to determine how much students were spending.
But as ever with this Wizard of Oz of government departments, you would have assumed wrong.
The pound in your pocket
Page 188 of Augar says that median expenditure by full-time students living away from home and studying outside London was £11,679 – significantly higher than the £8,700 maximum level of loan available, with the difference made up through extra parental contribution or students earning income from employment alongside their study.
But a closer look revealed that that £11,679 was in 2018/19 “prices”. It was a figure that in fact came from DfE’s “Student Income and Expenditure” survey from 2014 (not commissioned since), and to get to 2019 numbers the DfE-supplied secretariat simply uprated everything using the retail price index, a process detailed in a supplementary paper.
There was a problem with that uprating assumption – the cost of student housing had been rising faster than inflation for the best part of a decade. RPI between 2014 and 2019 was just over 11%, but student accommodation rent inflation was about 25% in that period – so that total figure on expenditure was undercooked by about £1,000. That will be an even worse figure by September 2022.
The report even had the brass neck to compare maximum maintenance rates across multiple countries, judging the English system as “generous” as a result. God forbid we should judge a maintenance system’s generosity on, say, whether it meets the actual costs students face.
So what about income? The review goes on to propose the use of the 21-25 National Minimum Wage rate as the benchmark for maintenance – after all, “80% of undergraduate students are under 25 in age”. But as this NMW site says, “The one major area where inflation remains high is housing… which affects everyone but especially the poorest”. To put this into perspective, it goes on – a person earning minimum wage “would only just be able to afford a one bedroom flat in London. Providing they don’t eat, use power, pay council tax. or wear clothes”. Or, indeed, buy books, join societies, or pay for graduation.
The review panel also said that it did not believe that students should receive a higher income than the minimum received by young people in full-time employment. It omitted to mention that young people in full-time employment would get at least £30 a week in universal credit – almost £1,000 over the thirty weeks.
So both on the expenditure side and on the maintenance income side, Augar was out by around £1,000. Augar goes on to note that living costs in London are higher than elsewhere because rents are higher, and notes that that may be an issue in other cities too – but merely concludes that that is a subject “worthy of further enquiry”. It’s been almost eighteen months, and that hasn’t happened.
Its panel also said that while it was “essential” for students with children to be adequately supported, it had not examined closely whether the present arrangements adequately reflect the higher cost of living, as well as childcare, and that this too was a subject “worthy of further enquiry”. That hasn’t happened.
While the panel said that the commuter student maintenance loan entitlement (20% below the level for those who live away from home) is broadly equivalent to the spending differences, a “detailed study of the characteristics and in-study experience of commuter students” was recommended to be carried out. That hasn’t happened either.
Costs of study were almost never mentioned (there’s a hell of a lot on fees and almost nothing on what they do/don’t actually pay for) but accommodation costs got a page – and while it didn’t recommend any controls (or link maintenance to these costs), it did want to ensure that students were given “improved and more consistent data” on the range and cost of available accommodation.
It went on to call for benchmarks for the proportion of maintenance support spent by students on accommodation, and a “comprehensive financial analysis” of private developers and operators of purpose-built student accommodation be carried out to understand the profits that private business and investors are making from student rents.
No. None of that has happened either.
It was frustrating enough that DfE didn’t use the delay in Augar’s report appearing to do all this extra work. But it’s unforgivable that the excess time between Augar’s publication and now hasn’t been spent delivering it.
Getting in and getting out
As I said when Augar came out, the most upsetting thing about all of this is that just like over the past decade, politicians will use application and entry rates – including from the poorest – as evidence that their policies are working. Well guess what, especially during a recession, poorer students from poorer backgrounds will continue to believe that higher education matters for their social mobility.
But there will still be a significant number that work out they can’t afford to go, large numbers that think they can afford to go and end up dropping out, and a big number that scrape by – all without taking part in wider university life, without buying the books they need, without going on the “optional” field trips who end up working part time until 3am. The ones who will then wonder why their labour market outcomes don’t match their richer counterparts.
By the time those figures are flashing red on the OfS dashboard, we’ll need to commission something like Augar all over again. But surely it would be quicker and simpler if we could just look properly at maintenance now?