Let’s talk tuition fees.

In England the Tories are planning an overhaul in the regulatory framework of Higher Education. They’re are changing the governance of fees. They’re planning fee increases in through an incredibly flawed Teaching Excellence Framework, and they plan on introducing differential fees within Universities. Critique of the new proposals warrants an essay in itself – you can read one here.

In Wales we’ll soon hear the outcome of the long-awaited independent Diamond Review into the funding of Higher Education, which will  now be overseen by Kirsty Williams, who was appointed Education Secretary within the Labour Government.

Since 2010 (don’t mention 2010!) tuition fees have remained largely a taboo issue, with only Labour really campaigning on the issue in the General Election. In the 2016 Welsh Assembly Elections the Welsh Liberal Democrats put forward a comprehensive policy, whereby the party would remove the tuition fee grant – essentially increasing fees to £9k for all students – but investing in large increases in grants for students through a Student Living Grant of up to £2,500 per student.

Now it’s time to re-think Higher Education policy. Our English policy is flawed, blindly accepts the deficit narrative, and isn’t genuinely improving outcomes for students. There are two elements to my argument; 1) it’s having a detrimental impact on students themselves, 2) it’s negatively impacting on the sustainability and the behaviors of the sector.

Undergraduate higher education is not seen by government as a public good, of value to society as a whole beyond those who receive it, and so worthy of public funding.

Claire Callender and Peter Scott, Browne and Beyond

“But more students than ever are applying and being accepted to University?!”

Yes, they are. All the reports since the introduction of higher fees in 2012 have concentrated on this issue and have demonstrated an increase in the number of 18-21 year olds from disadvantaged backgrounds applying to go to university. That’s a positive thing, but we’re resting on our laurels if that’s our main rebuttal about how the new fees system isn’t a deterrent for the least well off students.

That’s not good enough, nor is it the whole picture.

The removal of the student numbers cap in England has resulted in more students being accepted onto university courses, coupled with higher number of applicants. The mass expansion of Higher Education hasn’t been met with investment in our universities. This has resulted, in many universities, in capacity issues with courses rapidly expanding without the infrastructure (in the broader sense) to deal with the increases which are often forced on university departments. I’ve spoken to many academics from departments which are being required to take on more students at undergraduate level and they mostly tell you what a detrimental impact it has on the quality of teaching and the students’ learning experience.

We’re getting more students in through the doors, but into what? There’s evidence to show that students from the most-disadvantaged backgrounds are less likely to complete their degrees, and are less likely to get ‘good’ degrees. What’s more is that they are more likely to leave with higher personal/private debt through loans, payday lenders, credit cards, and overdrafts, which impact on retention and attainment. That’s even before a comparative analysis of women and BME students (in particular) who are more likely, due to their background, to face these barriers.

Why is it that we’re up in arms about academic outcomes in compulsory education and post-16 education, but when we consider higher education the academic outcomes of our most disadvantaged students is rarely mentioned and rarely provokes a response?

Indeed, failure, non-completion, financial hardship and high levels of debt are inversely related to both social class and the risks involved.

Does the fear of debt deter students from higher education (LSERO)

Then let’s look at part-time students in context of the new fees system – students who are likely to be returning to education for a second chance, looking to upskill, those who previously missed out, or students who have caring or employment responsibilities. Students typically from disadvantaged backgrounds. A report published by Bright Blue, Going part-time, found that;

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%.

When you look at the purpose of PT study the sharp decline in the number of PT student should be alarm bells for policy makers. All factors point to declining or inadequate financial support as a major reason. Bright Blue conducted some polling, of around 1,600 English adults adults with no experience of part-time HE who had considered but ultimately not pursued part-time HE in the past five years.

The reoccurring reason among participants for not pursuing part-time HE was affordability with 24% of participants reporting this. They then split the various reasons reported for not pursuing part-time HE into three broader categories: financial, practical and informational. Results included;

  • 54% 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.

I’ll come on to debt aversion and the impact that has on student choice and disadvantaged students later, however when only 31% of all part-time students are eligible for HE loans under the new funding regime, we have to ask ourselves whether Higher Education is a public good or a commodity, and where the impetus for these funding reforms came from.

NUS has also found that;

  • Half of 2015 graduates thought their degree was not worth the fees they paid.
  • 6% would not have gone into higher education at all if they could go back.
  • 71% of graduates remained concerned about their level of student debt.

“But it’s not even a real debt?!”

You know that, I know that. Most students know that. However you only have to look at the research into debt aversion to begin to understand the complications that this poses, and the broader context of taking on additional debts to meet living costs. Additionally some demographics are still unaware of the repayment terms of their student loans, causing greater concern among some student populations.

Research into debt aversion and higher education concluded that;

Hence, contrary to the government’s stance, it could be argued that the fear of debt exhibited by the low-income prospective students in our study was rational. Indeed, we are now asking them to borrow more money than their parents may earn in a year.

It is a ‘real deterrent’, and is just as real as students’ attainment and aspirations.

Does the fear of debt deter students from higher education (LSERO)

The same report draws on research from the United States which demonstrates the impact that student loans have on low, middle and high-income groups, concluding that that student loans have a negative/disincentive impact on low-income groups, but a neutral one on mid to high-income groups.

Then we come onto the cost of living and private debt.

NUS has published detailed findings into the cost of living for students, with more student taking on additional debt through credit or payday loans, to afford the basics such as rent and utilities. NUS’ reports found that a growing number of respondents had taken on a payday loan, who are increasingly targeting students. Student maintenance support has always been there to supplement other ‘income’. However, more and more students are taking on paid work in order to be able to fund their studies, which undoubtedly has a direct impact on attainment and mental health; and looking at reporting from University Student Services and Counselling departments to recognise the upward trend in stress and anxiety among students.

NUS has also found that;

  • 60% of graduates still had existing non-student consumer debt left over from their degree, the average amount being £2,600.
  • 46% of graduates had accumulated further debt since leaving their study.

Whilst tuition fee loans and maintenance loans will not affect a graduate’s credit score, the private debt incurred by students will affect the ability of those graduates to save, take out pensions, and get mortgages, particularly for those graduate on low and medium incomes. So when we’re talking about whether it’s a real debt, we have to consider it within the broader context of the total cost of higher education to the individual.

The underlying problem with the policy is that it overlooks the relationship between poverty and ability to access higher education (Hillman 2015).

Not only that but despite overwhelming opposition to a government consultation on changing student grants to loans, the Conservative government pressed on with it regardless. Coupled with the freezing of the repayment threshold for tuition fee loans, meaning that low and middle-income graduates will be hit the hardest. Couple that with labour market forces which have a largely negative impact on women and BME people and you can see why some would argue that the current funding model is unfair and entrenches social inequalities.

The IFS also found that graduates from richer family backgrounds earn more than other graduates studying the same course. The average earnings gap between those from a higher-income background and their counterparts is around 30% for males and 24% females. Even when you take into account the subject and the characteristic of the institution, the average student from a higher-income background earns 10 percent more than other students.

So taking on debt (however actual or real) without the same guaranteed financial return is a risk and a debt many are not willing to take on.

But working class kids shouldn’t pay for middle class kids’ education!

The issue of students paying for their higher education arises precisely because of the high financial returns said to result from education and the changes in the tax system to benefit the better off. At the same time, deregulation of labour markets has undermined the returns on semi-skilled and unskilled jobs. This can make it seem that those in such jobs have no interest in the future of higher education and neither the means, nor, the Government believes, the incentive, to help pay for it. A shift from government paying the bulk of the costs of higher education, to individual students (and often, in effect, their families), is a shift from all people in Britain having an interest in higher education, towards it becoming something that is only sensibly embarked upon if it is in the private interest of an individual or their family.

The shift to the loan model of funding higher education had an direct impact on the reduction of public debt for current taxpayers, but at the expense of increased spending on loans, driving up public debt. It’s a form of generational injustice and everyone will bare the burden of increased public debt in the future.

Future generations will be required to pay back their own student loans and also be the taxpayers who will pay the costs of an unsustainable system, bearing the burden of the debts that will be written off after 30 years. The Alternative White Paper argues – as do others – that;

there is no lasting financial saving to the country (only a temporary saving to current taxpayers, which must be recouped from future taxpayers). This suggests that the sole motive for the scheme is the misguided ideological belief that the extension of market principles into the provision of university education is itself sufficient justification.

The argument about the poor paying for the rich is not only in my opinion lazy, but implies that the only purpose of higher education is to gain employment which is only of personal benefit to the individual. However, there is ample research illustrating the broader social impact of higher education from which everyone benefits. There is ample research which demonstrates that communities with higher levels of education are generally healthier, more economically productive, are more socially cohesive, are actively engaged citizens, lower crime and so on. It also ignores (and contrasts the narrative) the impact of the new policy on public debt, although there are varying figures on this. The below are quoted from different publications;

  1. The outstanding debt created by student loans is set to spiral upwards to a predicted peak of £330bn by 2044, nearly 10 per cent of the country’s GDP, mainly because of the increased lending to cover higher tuition fees.
  2. Estimates from the Office of Budgetary Responsibility (OBR), established by the Coalition, suggest that that the reforms have made a modest annual saving to the taxpayer of £700 per student for the 2012-13 cohort. Equating to an aggregate annual saving of around £0.8billion in 2014-15, after three cohorts of students had entered university under the new fee system system.
  3. A similar analysis conducted by the Institute for Fiscal Studies estimated the savings at £1254 per student over the full length of their course (thus an average of £418 per year for comparison). This puts the aggregate public savings at less than £0.5billion for 2014-15.
  4. On the most recent projections, annual loan outlay is expected to hit £18 billion by 2020 for English HE. Repayments are only expected to rise to significant levels sometime after 2030 – they currently hover around £1.5bn annually and might reach £3bn by 2020. The Government covers the shortfall between annual outlay and annual repayments received by borrowing. Over the next parliament, close to £90bn will be added to the national balance sheet as a result of student loans. This is over and above the additional borrowing needed to finance each year’s ‘deficit’.

Changing the narrative

Success of a higher education policy should be based on more than the  number of students gaining access to university and the current measure of the number of graduates in employment. Higher Education is not just about getting a job it is a;

process of inclusion and reconstruction – albeit unfinished – around issues of gender and social class, a process that has involved addressing its own structures and processes as well as shedding light outwards. The globalisation of higher education also means addressing the legacy of colonialism and postcolonialism within the curriculum.

There is something fundamentally out of place in turning education into a commodity. Higher fees has been resulted in institutions cutting corners and spending money on gimmicks instead of frontline services, and has ultimately reduced students to passive consumers, with no real choice, no real market power, rather than active participants in learning and becoming critical global citizens.

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