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Understanding and reversing the decline in PT students

On the publication of a new report from Bright Blue on reversing the decline of part time students, the report's authors James Dobson and Ryan Shorthouse set out the case for a new graduate levy on employers.
This article is more than 8 years old

Ryan Shorthouse is Director of Bright Blue.

James Dobson is a researcher at Bright Blue.

There has been a worrying decline in the number of part-time higher education (HE) entrants in recent years. Between 2010-11 and 2013-14, the number of UK and other EU part-time undergraduate entrants fell from 259,000 to 139,000. This was a decline of 46%.

There has also been a significant decline in the number of taught part-time postgraduate entrants, who constitute a majority of all postgraduate entrants. Between 2010–11 and 2013–2014, UK and other EU part-time taught postgraduate entrants fell from 97,000 to 70,000. This was a decline of 28%.

In our report published today, Going part-time, Bright Blue explored in detail the possible causes of this decline. We identify four possible factors for undergraduate entrants:

  1. The removal of government funding for students studying for an equivalent or lower qualification (ELQ) in 2008–09. This caused universities to lose funding via the Higher Education Funding Council for England (HEFCE) teaching grant for students that were studying for a qualification that was at an equivalent or lower level to one they had already obtained.
  2. The recession which also began in 2008–09. This caused increased unemployment which is associated with lower levels of participation in part-time HE. It also led to a reduction in the training and development budgets for employers. This is reflected in a 44% decline in students reporting employers as their major source of funding between 2010-11 and 2012-13.
  3. Reductions in the budgets of public sector organisations which were introduced from 2010–11. Part-time HE students represent between 1% and 1.3% of total employment in the public sector compared to only 0.7% of employment in the economy as a whole. A smaller public sector workforce and smaller public sector training and development budgets are likely to have had a negative effect on the number of part-time HE entrants.
  4. The changes to fee and loan arrangements introduced in 2012–13. The 2012-13 reforms meant that part-time HE students were eligible for tuition fee loans for the first time. However, the eligibility criteria was strict, and only 31% of all part-time students are eligible. At the same time, tuition fees increased significantly in this period, including for part-time HE courses.

We believe that the decline in UK and other EU part-time postgraduate entrants, most of which was in education related courses, has been caused largely by public sector austerity.

All of these factors point to declining or inadequate financial support as a major reason for fewer people enrolling on part-time HE courses. Indeed, the polling we conducted for our report shows that it is financial barriers that are most significant for potential part-time HE students.

We polled 1,567 English adults with no experience of part-time HE who had considered but ultimately not pursued part-time HE in the past five years. We asked these ‘considerers’ the main reason for not pursuing their interest in part-time HE. The results are shown in the chart below. The most frequently cited reason for not pursuing an interest in part-time HE was simply not being able to afford it – 24% of considerers reported this.

We split the various reasons reported for not pursuing part-time HE into three broader categories: financial, practical and informational. Our polling found that 54% of considerers did not pursue their interest in part-time HE primarily because of financial barriers. 34% did not pursue their interest because of practical barriers, and 7% because of informational barriers.

We have therefore designed two original and credible policies to mitigate these financial barriers. We applied three key tests when generating these policies:

  1. Fiscal neutrality: Due to the Government’s focus on reducing public spending, any new policies must not cost the government any more money than is currently the case.
  2. Progressivity: Those on the lowest incomes should pay less than those on the highest incomes for participation in part-time HE.
  3. A fair funding settlement between the key beneficiaries of HE, including part-time HE. There are three major beneficiaries of increased HE participation: government, individuals and employers. We believe that all three beneficiaries should contribute to the cost of HE.

A lifetime HE tuition fee loan account

All eligible adults should be able to access a lifetime HE tuition fee loan account from government to pay for the tuition of any HE course – full-time or part-time – throughout their lives.

The amount in the lifetime loan account would be determined by the government following consultation. Under new plans by the Government, some students who decide to take a full-time undergraduate, postgraduate and PhD degree can potentially draw down £44,000 in tuition fee student loans. Equally, in a similar scheme to what is being proposed here in Australia called FEEHELP eligible students can access up to $96,000 from a lifetime loan account, and $120,002 for those who study Medical, Dentistry and Veterinary Science. However, the amount in the loan account should also be low enough to trigger price competition and, in particular, downward pressure on undergraduate tuition fees in England.

Individuals will be able to get use their loan account to pay the tuition fees for any type of HE course. Under forthcoming proposals, full-time and some part-time students will be able to access government-backed loans for undergraduate degrees, postgraduates degrees and PhDs. In our system, all full-time and part-time students will be able to access government-backed loans for equivalent or lower qualifications, for an institutional credit, and when they are aged 30 or over. Our system is much more progressive than the forthcoming elitist system which favours only academically excellent students.

As previously mentioned, we recognise the need to keep any new policies fiscally neutral. Basically, we need to ensure the RAB charge is no greater than it is now or the student loans scheme. In order to achieve this, we suggest various measures on the repayment of loans through this system. First, the parameters for the repayment of the lifetime HE tuition fee loan account should be stricter (for example, the minimum salary threshold for repayment or the interest rate attached to tuition fee loans) for every new qualification obtained or when the student is older. In addition, we believe that the government should maintain the current cap on undergraduate tuition fees and that the Student Loans Company should significantly improve obtaining loan repayments from graduates of British universities who move abroad.

It is important that this new repayment model is progressive. In other words, sufficient subsidies should remain in the loans scheme to ensure low lifetime earners do not pay as much as high lifetime earners. This can be achieved in two ways. By seeking higher repayment from the highest earners. And by seeking funding from an alternative source – large graduate employers – to pay for the subsidy. That is the focus of our second policy recommendation.

Our polling finds support for the lifetime HE tuition fee loan account: 49% of the English public find the idea personally appealing compared to only 15% who would find it unappealing.

A graduate levy on large employers with large graduate workforces

Employers of large amounts of graduates should pay a new ‘graduate levy’. The rate of the levy is unspecified, as is size of the employer. We believe that the government should consult on this as it has done with the ‘apprenticeship levy’. All funds raised from the graduate levy will be used to help subsidise the proposed lifetime HE tuition fee loan account. This will help ensure that the loan account is fiscally neutral and progressive.

The graduate levy will prevent some employers from gaining a ‘free-ride‘ by recruiting  employees who were funded by their previous employer to do a part-time HE course. It also ensures all large graduate employers contribute to the cost of a system which they are major beneficiaries of.

Employers may argue that they already contribute to the costs of HE through corporation tax. This is true. But graduates also pay considerably for HE, above and beyond their student loan repayments, through the generally higher levels of personal tax they pay throughout their lifetimes. Just as there is a strong argument for making graduates who benefit significantly from HE pay more through their student loan repayment profile than other graduates, so too is there a strong argument for making employers who benefit significantly from HE participation – specifically, those who recruit a considerably high proportion of graduates – pay more through this graduate levy than other employers.

We believe that there should be a reduction in the amount some large graduate employers pay through this graduate levy if they are already funding some of their employees to undertake part-time HE study.

Our polling of the general English public found strong public support for our proposed policy of a graduate levy on large employers who employ a large number of graduates. A majority of the public (57%) find the idea personally appealing, while only 9% find it personally unappealing.

Our two policy ideas build on forthcoming government reforms such as an extension of tuition fee loans to some postgraduates and PhD students, and the introduction of an apprenticeship levy. The Government could dramatically improve life chances and raise national prosperity by building a funding system for HE that supports, in a fiscally responsible and progressive way, all upskillers and reskillers. The innovative proposals in this report are part of the answers to the UK winning ‘the global race’.

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