Thick man of Europe? How the higher education policy could lead to a UK graduate deficit.

Nearly two and a half years on from reforms that destroyed the Liberal Democrats’ credibility, unnerved universities and led to protests in London we now have the first glimpse of how the Government’s higher education policy is affecting the sector.  In March Hefce, England’s higher education funding body published an impact report on both students and institutions, looking specifically at whether the introduction of higher fees had discouraged students from going to university, the subject choices that students are making, and how universities and colleges were being affected by the new system.  

The report found that since 2010/11 overall full-time undergraduate applications have fallen by 10%, and although there are signs that this has picked up with applications to full-time courses for 2013/14 rising by 3% from 2012/13, there are still fewer applications overall.  Looking deeper there has been a 15% fall in full-time undergraduates taught in further education colleges, and a 7% fall in mature students entries (those over 20 years of age) at undergraduate level.  Although the Government was quick to point out that part-time learners, the majority of which are over 21, would not lose out in the wake of reforms, the figures speak of a different reality. Since 2010/11 part-time undergraduate and postgraduate entrants have fallen by 40% (105,000) and 27% (25,000) respectively. And although the Government has now introduced fee loans for part-time undergraduates of up to £6,750 a year as part of the 2012/13 fee rises, just 31,700 have applied for and been judged eligible for loans from a total of the 154,000 part-time undergraduate entrants.

The Government introduced a system where universities would be able to charge students up to £9,000 per year, but naively believed that sector-wide average fees would be somewhere nearer the £7,500 mark. It now transpires that most universities intend to charge the maximum £9,000 per year from 2013 onwards.  It was surely no surprise when many universities opted to charge student all they could, citing it necessary to recoup what the Government had taken away from them in direct research and teaching grants.  One of the policy’s aims was to give greater status to teaching by enabling students to directly determine which university got their money.  The argument went that universities had for too long been preoccupied with research because that was the source of where much of their funding and prestige came from.  Universities now have to compete against each other in the open market by improving what has been referred to as the ‘student experience’ which includes outputs like teaching hours and student-tutor ratios.  University students have always been ‘consumers’ of a kind, and even more so since the introduction of tuition fees. Now with students bringing the funding for their education with them, higher education has become more ‘transactional’ than ever before.

The Government made a right old hash of communicating effectively what their policy was trying to achieve. Despite students not having to pay anything upfront, the headline figure of tuition fees of £9,000 per year was all that people heard, and what many news reports focused on.  Their rhetoric on creating a financially sustainable higher education sector was also out of step with fiscal reality. Only recently, in response to the Office for Budget Responsibility’s downward revision of its wage growth forecasts, David Willetts, the universities and science minister cited unanticipated wage stagnation when he admitted to MPs that the RAB charge, the amount of student debt the Government is forecasting that it will need to annually write off, will mean a further £200 million per year will need to be found.  Students’ tuition fee payback is based on annual earnings so lower earnings means less money returned to the Treasury in repayments and income tax.

The Government has also made much of its desire to boost social mobility by attempting to widen participation in higher education among the most disadvantaged students, and policies over the last decade have addressed this to some degree with 18-year-olds from the most disadvantaged areas are now 80% more likely to apply to higher education in 2013 than they were in 2004. That’s good news of course, and it appears that recent reforms have not made young people from disadvantaged areas any less likely to study full-time. But there continues to be a considerable gap in participation between different groups of students which is yet to be tackled. Young people from the most advantaged areas are still 3 times more likely to enter higher education than those from the most disadvantaged areas.

For the institutions themselves, they continue to voice concerns over the new system, and diplomatically many have called it “challenging”.  They feel that they are operating in a financially uncertain environment where long-term planning is not possible, and as a consequence there is a strong feeling that the UK is being left behind other countries as they increase their investment in HE. A number of University Groups like UniversitiesUK, the 1994 Group and Million+ are particularly concerned with the substantial decline in part-time student numbers, provision for which will surely affect the most disadvantaged groups more than any other, as the demands of juggling study and employment becomes too great for some.

The system remains in flux for now and it will be a few more years before we see the long term effects of this policy.  As an alternative the Labour Party has vowed to cap tuition fees to £6,000 per annum, but there is no detail yet on what the financial settlement for the sector as a whole would be if Ed Miliband walked into Number 10 in two years’ time. However, the Hefce report raises a number of issues that the next Government and the higher education sector will need to work together to confront, including provision for part-time learners, the take-up of postgraduate courses, and the impact of the changes on students from disadvantaged backgrounds and other groups.

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