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The Augar Review: what it could mean for students and universities

After many months of delay, while it was caught up in the policy vacuum created by Brexit, the Augar Review has finally been published.

This independent government-commissioned report, chaired by Philip Augar, a British author and former equities broker, highlights a number of recommendations for post-18 education. Beyond the headline cut to tuition fees, the review aims to “ensure a joined-up system that works for everyone”. Augar provides more than 60 proposals for both further education and higher education – for once taking a combined view of two sectors that are often regarded less and more prestigious respectively.

As part of a package of measures to improve the status of further education, the review proposes moving away from structuring government fee loans around a three or four year degree. Instead, it recommends a lifelong learning allowance that can be used to fund degree or further education programmes.

As well as lowering fees to £7,500 from £9,250, Augar proposes the reintroduction of means-tested maintenance grants up to £3,000. The report also recommends extending student loan repayments from 30 to 40 years. Above inflation interest rates on student loans would also be removed – but only during the period when the student is at university – and there would also be an overall cap on total paybacks.

This may all sound good for borrowers in the long term. But the lowering of the repayment threshold from £25,725 to £23,000 – and the extension of the repayment period will make many graduates worse off – and means they could be paying back loans well into their sixties. For the government, however, these changes would put the country’s finances in a better position by increasing the proportion of the overall student loan book that is repaid.

The impact for students

The ways in which such changes to funding might impact student participation are complex. As research regularly shows, for most students only significant changes in on-course costs influence their choices about where and what to study.

Under the current system, an overall student loan can reach £54,500 for students from low income families on a three-year course. So differences of £1,000, or even the proposed £1,750, in annual fees will reduce the amount borrowed by under 10% and give no immediate financial benefit to undergraduates.

The proposed grant, however, could go towards living costs and help to reduce the need for students from low-income backgrounds to take paid employment while studying. This would have a direct impact on the experience and likely outcomes for these students. So, in this sense, the reintroduction of grants should play at least a small part in increasing participation among those from low-income backgrounds.

The reform could see loans renamed as student contributions. Shutterstock

The changes in repayment terms would also mean that lower earning graduates would pay back only some of their debts, while those on the current income threshold of £25,725 would make, what the report describes as, a “student contribution” of an additional £180 a year.

Looking at projections over the 40 years, however, the new repayment model would make little difference to the very lowest earners, and high earners would benefit from the 120% cap on repayments in relation to loans. It would be middle income borrowers, with salaries of around £45,000 five years after graduation, who would feel the most impact – paying back around 105% of their original loan over 40 years, as opposed to 40% over 30 years under the current system.

And, of course, while the proposed increases in resources for further education should improve the options and experiences of many students, there’s a question of how the possible reduction in funding for some university courses will impact on student experience and choices.

A step back from marketisation?

While the headline from the report may have become the almost 20% reduction in maximum undergraduate fees in England, vice-chancellors want to know more about how this will be implemented.

The sector estimates that the funding gap will be around £1.8 billion each year. And there are strong signals that the review believes this should be used to increase what it describes as the government’s currently “very limited control over the substantial taxpayer investment in higher education.”

This could prove to be the first step in a retreat from David Willett’s package of reforms which, in 2012, introduced £9,000 maximum fees and, in 2015, led to the removal of student number caps – so that universities can now offer as many places on each course as they wish. These changes grew from proposals in Students at the Heart of the System, a white paper that aimed to create a system more responsive to student demand. Or as its critics would say, to marketise higher education.

Of course, there’s no certainty that any changes to post-18 education and funding that are introduced in the wake of the Augar Review will actually follow the route it advocates. But it’s to be hoped that when politicians consider the financial implications of these proposals during the Spending Review later in 2019, they remember and reflect on the original thinking behind this exercise and allocate funding with all post-18 education options and students in mind.