tag:theconversation.com,2011:/us/topics/student-finance-9732/articlesStudent finance – The Conversation2023-07-05T12:46:16Ztag:theconversation.com,2011:article/2037092023-07-05T12:46:16Z2023-07-05T12:46:16ZUniversity is expensive – how a mid-course work placement can help with costs and careers<figure><img src="https://images.theconversation.com/files/535310/original/file-20230703-274838-azdorj.jpg?ixlib=rb-1.1.0&rect=47%2C15%2C5191%2C3471&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/african-asian-different-age-colleagues-seated-1751484332">fizkes/Shutterstock</a></span></figcaption></figure><p>Students are struggling financially. A 2022 survey from the Office for National Statistics found that <a href="https://www.ons.gov.uk/peoplepopulationandcommunity/educationandchildcare/bulletins/costoflivingandhighereducationstudentsengland/24octoberto7november2022">half of students</a> in England felt they were facing financial difficulties, and that one-quarter of students had borrowed more to cope with the cost of living crisis. In England, tuition fees for bachelor’s programmes are the <a href="https://www.oecd-ilibrary.org/docserver/b35a14e5-en.pdf?expires=1683803663&id=id&accname=guest&checksum=6289B4A23CCB0D02CA5278D25BA77FE6">highest among OECD countries</a>. </p>
<p>In addition to the financial burden of a degree, students have to deal with stress about getting a job in the competitive labour market and the prospects for their future career. A <a href="https://www.highfliers.co.uk/">report on the graduate job market</a> found that in 2022, there were an average of 39 applications for each graduate-level vacancy.</p>
<p>A 2021 survey of young people found that over one-third <a href="https://graduatemarkettrends.cdn.prismic.io/graduatemarkettrends/7e528f0e-5f54-45bc-8a94-c55a014fb396_early-careers-survey-2021-jobs-apprenticeships-and-postgraduate-study.pdf">felt uncertain</a> about their career plans. University students found a lack of work experience to be a key obstacle in <a href="https://graduatemarkettrends.cdn.prismic.io/graduatemarkettrends/7e528f0e-5f54-45bc-8a94-c55a014fb396_early-careers-survey-2021-jobs-apprenticeships-and-postgraduate-study.pdf">applying for jobs</a> and close to one in two university students <a href="https://graduatemarkettrends.cdn.prismic.io/graduatemarkettrends/7e528f0e-5f54-45bc-8a94-c55a014fb396_early-careers-survey-2021-jobs-apprenticeships-and-postgraduate-study.pdf">didn’t feel prepared</a> for getting a job.</p>
<p>Working during a university degree is one way of both gaining work experience and some much-needed cash. But while many students might opt for a part-time job alongside their studies, this work experience is unlikely to be related to students’ studies or career aspirations, as it typically covers students’ short-term needs. </p>
<p>But a work placement – a period of employment in a relevant industry in the middle of a university course – can offer significant benefits, including finding a job <a href="https://www.tandfonline.com/doi/full/10.1080/03075079.2023.2225540">aligned with their career goals</a> after graduation. </p>
<h2>Work placements</h2>
<p>Many UK universities offer the option between a standard three-year programme and a four-year programme with a work placement – known as a <a href="https://theconversation.com/paid-work-experience-and-sandwich-degrees-help-boost-social-mobility-new-research-112197">“sandwich” degree</a>. Students who undertake a work placement complete the first two years of their programme, and spend their third year working in a relevant industry before completing their degree in the fourth year. This option gives students the opportunity to gain full-time and typically paid work experience with an organisation.</p>
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<img alt="Older and younger female colleagues talking" src="https://images.theconversation.com/files/535312/original/file-20230703-256675-y2xpsk.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/535312/original/file-20230703-256675-y2xpsk.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/535312/original/file-20230703-256675-y2xpsk.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/535312/original/file-20230703-256675-y2xpsk.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/535312/original/file-20230703-256675-y2xpsk.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/535312/original/file-20230703-256675-y2xpsk.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/535312/original/file-20230703-256675-y2xpsk.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">A placement year can help students build professional networks in their preferred field.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/diverse-old-young-female-colleagues-talking-1332825527">fizkes/Shutterstock</a></span>
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<p>Because work placements are part of a degree programme, universities help students find an appropriate placement. Support is available from the universities’ careers services, offering advice that helps students search for the right employer and apply for jobs.</p>
<p>The placement year extends a student’s time at university, but they pay a reduced tuition fee for the year they are on work placement: around 20% of the standard annual fee (£1,850 for a standard fee of £9,250). And the income can make a significant difference to student finances. Our research found that the average salary for economics placements is £19,000, and there are placements that offer <a href="https://www.tandfonline.com/doi/abs/10.1080/13562517.2020.1863345">more than £30,000</a>. </p>
<p>Students on placements develop transferable skills, such as communication, teamwork and time management, as well as industry knowledge. This may help improve their <a href="https://www.tandfonline.com/doi/full/10.1080/03075079.2014.988702">final-year academic performance</a> when they return to study.</p>
<h2>Benefits after graduation</h2>
<p>Students who take a placement year also develop a professional network and obtain valuable information from employers about future jobs. This can boost their graduate employability and career success by increasing the chances of finding graduate jobs that fit their career plans. <a href="https://www.tandfonline.com/doi/full/10.1080/03075079.2023.2225540">Our research</a> found that economics graduates who did a placement were more likely to find a job that aligned with their career aspirations than graduates who did not do a placement.</p>
<p>There may also be earnings implications after graduation. <a href="https://www.tandfonline.com/doi/full/10.1080/03075079.2014.988702">Earlier research</a> has shown that placement graduates in full-time employment earn on average £2,000 more than non-placement graduates. But there is substantial variation across degree subjects, for example, <a href="https://www.tandfonline.com/doi/full/10.1080/03075079.2023.2225540">our recent research</a> has shown that this value is approximately £1,300 for economics graduates. But placement students need a few years to be financially better off than non-placement graduates, as they postpone entering the graduate labour market by one year.</p>
<p>Despite these benefits, some students may not see a placement as a viable option. They may face pressure to finish their degree, and the extra income may not be enough to assuage their financial concerns. </p>
<p>Students who struggle financially are likely to take a part-time job during their studies to address their immediate needs – and the prospect of a third-year placement is unlikely to change this. <a href="https://www.tandfonline.com/doi/abs/10.1080/02680930801924490">Research has shown</a> that term-time work has a negative effect on academic performance – and the impact is greater the more hours a student works. </p>
<p>However, working and possibly saving during a placement year could take the pressure off in the crucial final year, allowing students to focus more on their studies.</p><img src="https://counter.theconversation.com/content/203709/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Students doing a “sandwich degree” can spend a year between their second and final years at university in employment.Panagiotis Arsenis, Senior Lecturer in Economics, University of SurreyMiguel Flores, Assistant Professor in Economics, National College of IrelandLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1812322022-04-28T12:20:33Z2022-04-28T12:20:33ZDespite $400 boost, Pell Grants fall far short of original goal to make college more affordable for low- and middle-income students<figure><img src="https://images.theconversation.com/files/459608/original/file-20220425-2721-y690dm.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C5081%2C3390&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The Pell Grant covers less than 30 percent of the costs to attend a four-year public college. </span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/graduate-waives-during-the-53rd-commencements-of-the-news-photo/1234897146">Craig F. Walker/The Boston Globe via Getty Images</a></span></figcaption></figure><p>Back around when the Pell Grant was <a href="https://crsreports.congress.gov/product/pdf/R/R45418#:%7E:text=The%20federal%20Pell%20Grant%20program,have%20been%20awarded%20since%201973.">created by Congress in 1973</a> to help students from low-income families pay for higher education, it <a href="https://crsreports.congress.gov/product/pdf/R/R45418#:%7E:text=The%20federal%20Pell%20Grant%20program,have%20been%20awarded%20since%201973.">covered 80% of the costs</a> of attending a public four-year college or university. And it covered over 40% of the costs of going to a private one.</p>
<p>Today, thanks to <a href="https://nces.ed.gov/fastfacts/display.asp?id=76">increases in tuition costs</a> and Pell Grants not keeping pace, they cover less than 30% of the costs at a public university and less than 20% of the costs at private institutions, according an analysis I conducted using College Board data. </p>
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<p>With that history in mind, President Joe Biden’s budget, which <a href="https://www.acenet.edu/News-Room/Pages/Biden-Signs-Major-Spending-Bill.aspx">increases the maximum Pell Grant by $400</a> – from $6,495 to $6,895 – for the 2022-2023 school year, should boost the purchasing power of the grant. But it still falls short of restoring that purchasing power to where it was when the Pell Grant was created nearly 50 years ago, a goal for which many in higher education have advocated.</p>
<p>I make this observation as a veteran university administrator and as a <a href="https://scholar.google.com/citations?user=ljqkyw4AAAAJ&hl=en&oi=ao">researcher</a> who has spent the last 25 years studying what factors enable students to enroll in college and get a degree. </p>
<h2>Pell Grants yesterday and today</h2>
<p>Over $26 million in <a href="https://research.collegeboard.org/trends/student-aid">Pell Grants</a> were awarded to approximately 6.2 million students in the 2020-2021 school year, with the average recipient receiving just over $4,200. </p>
<p>The grants, originally called <a href="https://www2.ed.gov/finaid/prof/resources/data/pell-historical/beog-eoy-1973-74.pdf">Basic Educational Opportunity Grants</a>, were <a href="https://www.newamerica.org/education-policy/topics/higher-education-funding-and-financial-aid/federal-student-aid/federal-pell-grants/#:%7E:text=Congress%20established%20the%20Basic%20Educational,Pell%20(D%2DRI).">renamed in 1980</a> after the late U.S. Senator <a href="https://bioguide.congress.gov/search/bio/P000193">Claiborne Pell</a>, a Democrat from Rhode Island and an early champion of the grant.</p>
<p>In line with the goals of the <a href="https://www.govinfo.gov/content/pkg/COMPS-765/pdf/COMPS-765.pdf">Higher Education Act</a>, which was originally passed in 1965, the grants were designed to be the foundation of college funding for students from poor- and moderate-income families. They were also meant to be a mechanism to help eliminate the gap in the rates at which these students attend college and graduate in relation to their peers from wealthier families.</p>
<p>The idea was that with a Pell Grant, a student could afford to pay the major components of the cost of attendance at a public four-year institution without having to borrow a lot of money or work a lot of hours at a job, particularly off campus.</p>
<p>For students at private colleges, Pell Grants would cover a substantial amount of their education costs, too, but not to the same extent as public colleges, which typically cost less to attend.</p>
<h2>Losing purchasing power</h2>
<p>As tuition prices have increased, the size of Pell Grants – which are subject to approval from Congress – has not kept pace, causing their purchasing power to decline.</p>
<p>This erosion of the value of a Pell Grant has affected college access in a number of ways. Poorer students have become <a href="https://www.cfr.org/backgrounder/rising-student-debt-harming-us-economy?gclid=Cj0KCQjw06OTBhC_ARIsAAU1yOUU0cMFbIWA0_EZS1C4Zgf4iUWrSKgoHL6lBT2x60AZlI9Q6lL-wDUaArU0EALw_wcB">more reliant on loans</a> to finance their education, as Pell covers less of the costs. </p>
<p>These poorer students are also more likely to be <a href="https://nscresearchcenter.org/wp-content/uploads/2021_HSBenchmarksCovidReport.pdf">enrolled in a community college</a> because of the lower prices in two-year colleges. The post-graduation job prospects of a student with a community college degree are <a href="https://ccrc.tc.columbia.edu/media/k2/attachments/labor-market-returns-sub-baccalaureate-college-review.pdf">not as good</a> as they are for one who graduates with a bachelor’s degree, studies have shown.
And the labor market returns to a community college degree are <a href="https://ccrc.tc.columbia.edu/media/k2/attachments/labor-market-returns-sub-baccalaureate-college-review.pdf">lower</a> than those of bachelor’s degrees.</p>
<p>Pell Grants have helped close the college access gap. While low-income students <a href="https://nces.ed.gov/programs/digest/d17/tables/dt17_302.30.asp">almost doubled the rate</a> at which they enrolled in college after graduating from high school – from 35% in 1975 to 67% in 2016 – high-income students also increased their college-going rate.</p>
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<p>While the poorest students have achieved parity with their middle-income peers, both groups still lag behind the college attendance rates of students from wealthier families. So while Pell Grants have helped close some of the gap, students from higher-income families still attend college at a rate <a href="https://nces.ed.gov/programs/digest/d17/tables/dt17_302.30.asp">16 percentage points</a> more than poor students. </p>
<h2>Increasing the Pell Grant’s power</h2>
<p>The $400 increase in the Pell Grant maximum is the largest since the <a href="https://research.collegeboard.org/trends/student-aid">$619 increase in 2009</a>. However, with the price of college continuing to grow, this increase will bring the purchasing power of Pell to just over <a href="https://research.collegeboard.org/trends/college-pricing">30%</a> of the cost of attending college. This is a small step in the right direction, but not nearly enough to help students from moderate-income families.</p>
<p>Many higher education organizations, including the <a href="https://www.acenet.edu/News-Room/Pages/Statement-Call-to-Congress-Double-Pell.aspx">American Council on Education</a>, the <a href="https://www.nasfaa.org/double_pell#:%7E:text=NASFAA%20Advocacy&text=NASFAA%20in%20June%202021%2C%20published,struggling%20to%20meet%20college%20cost">National Association of Student Financial Aid Administators</a> and the <a href="https://www.naicu.edu/issues-advocacy/doublepell/making-the-case">National Association of Independent Colleges and Universities</a>, have called for doubling the Pell Grant. This would be an important step toward having Pell Grants cover as much for today’s students as they did a generation or two ago.</p>
<p><a href="https://research.collegeboard.org/trends">Data from The College Board</a> demonstrates that a $13,000 Pell Grant – roughly double this year’s maximum of $6,495 – would provide 57% of the college costs at a public institution. However, this is still well below what it covered in the 1970s. Without increased support, poorer students will continue to lag their wealthier peers in achieving the American dream of a college education.</p>
<p>[<em>Over 150,000 readers rely on The Conversation’s newsletters to understand the world.</em> <a href="https://memberservices.theconversation.com/newsletters/?source=inline-150ksignup">Sign up today</a>.]</p><img src="https://counter.theconversation.com/content/181232/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Donald E. Heller has received funding for his research in the past from governmental and non-governmental organizations. None of that funding has influenced this article.</span></em></p>The Pell Grant would have to be doubled in order for its purchasing power to be anywhere near what it used to be, a scholar observes.Donald E. Heller, Provost and Vice President of Academic Affairs, University of San FranciscoLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1524282020-12-23T13:41:20Z2020-12-23T13:41:20ZCongress lifts long-standing ban on Pell grants to people in prison<figure><img src="https://images.theconversation.com/files/376510/original/file-20201223-21-1encvef.jpg?ixlib=rb-1.1.0&rect=0%2C386%2C5556%2C3323&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Prison education programs have been shown to improve job prospects.</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/photo/three-inmates-listen-to-a-woman-discuss-options-and-royalty-free-image/78024127?adppopup=true">Thinkstock/Getty Images</a></span></figcaption></figure><p>When Congress decided in 1994 to <a href="http://congressionalresearch.com/RS21785/document.php">ban federal student aid</a> for people behind bars, it was part of a wider political agenda to “<a href="https://www.theatlantic.com/politics/archive/2014/04/a-timeline-of-the-rise-and-fall-of-tough-on-crime-drug-sentencing/360983/">get tough on crime</a>” – even though <a href="http://doi.org/10.1257/089533004773563485">crime rates had begun to fall</a> in the 1990s.</p>
<p>The <a href="https://www.sentencingproject.org/publications/trends-in-u-s-corrections/">number of people behind bars grew</a>, but, without access to federal student aid, <a href="https://www.rand.org/pubs/research_reports/RR564.html">higher education programs in America’s correctional facilities dwindled</a>.</p>
<p>On Dec. 21, 2020, Congress moved to <a href="https://apnews.com/article/technology-prisons-legislation-coronavirus-pandemic-health-eb69014f6cc85f8384c180a441d94463">lift the long-standing ban</a> on federal student aid – specifically, the Pell grant – for those who are incarcerated. The decision comes after a long push for prison reforms that included calls for a <a href="https://www.aclu.org/press-releases/91-percent-americans-support-criminal-justice-reform-aclu-polling-finds">greater emphasis on rehabilitation</a>, <a href="https://www.pewtrusts.org/en/research-and-analysis/issue-briefs/2017/03/state-reforms-reverse-decades-of-incarceration-growth">reducing prison populations</a> and making prison sentences <a href="https://www.ussc.gov/sites/default/files/pdf/research-and-publications/backgrounders/profile_FSA_2010.pdf">less harsh</a>.</p>
<h2>$1.4 trillion</h2>
<p>The measure is part of a US$1.4 trillion government <a href="https://www.washingtonpost.com/education/2020/12/20/congress-spending-colleges-pell-fafsa/">spending bill</a> for 2021 that is <a href="https://thehill.com/policy/finance/531164-congress-unveils-23-trillion-government-spending-and-virus-relief-package">attached to a pandemic relief bill</a>.</p>
<p>As the director of a prison college program at <a href="https://www.ubalt.edu/cpa/about-the-college/community-engagement/second-chance-college-program.cfm">The University of Baltimore</a>, I know firsthand that providing college for people in prison will make a positive difference in their lives. It will also improve public safety and save taxpayers money.</p>
<p>Research by the Rand Corp. has shown that participation in prison education programs reduces <a href="https://doi.org/10.7249/RR266">by 43% the rate at which people reoffend</a>. The reduction in the likelihood to break the law means that for every dollar spent on prison education, taxpayers <a href="https://www.americanprogress.org/issues/education-k-12/news/2018/03/02/447321/education-opportunities-prison-key-reducing-crime/">save $5 in reincarceration costs</a>. </p>
<p>Prison education has also been shown to <a href="https://www.rand.org/pubs/research_reports/RR266.html">improve job prospects</a> for those released. Children of an incarcerated person who attended college <a href="https://www.theatlantic.com/education/archive/2014/04/are-college-degrees-inherited/360532/">are also more likely to attend college</a> themselves.</p>
<h2>A view from the inside</h2>
<p>Each year at the prison education program that I oversee, 50 men serving sentences at a maximum-security penitentiary in Maryland take college courses through the university where I teach. Students enroll in general education courses for two to three years before moving onto coursework in human services administration. Many students are released by the time they are juniors and continue earning their degrees on campus.</p>
<p>Several students who have kept going are now working within the human services field. They work at local nonprofit organizations such as <a href="https://turnaroundtuesday.org/">Turn Around Tuesday</a>, <a href="https://concertedcaregroup.com/">Concerted Care Group</a> and <a href="http://www.hildasplace.com/">Hilda’s Place Behavioral Health Services</a>.</p>
<p>Having several semesters of college completed in prison has helped the students continue their enrollment and secure these jobs. Taking college courses also helps students become better <a href="https://eric.ed.gov/?id=EJ971293">critical thinkers</a>, builds <a href="https://www.themarshallproject.org/2018/04/05/finding-college-by-way-of-prison">leadership skills</a> and creates a <a href="https://www.themarshallproject.org/2018/04/05/finding-college-by-way-of-prison">sense of community</a> among those who participate. </p>
<h2>Second chance</h2>
<p>The program I direct is part of the first federal effort to expand access to college in prison. In 2015, the <a href="https://www.npr.org/sections/ed/2015/07/31/428148089/the-plan-to-give-pell-grants-to-prisoners">Obama administration announced</a> the Department of Education Experimental Sites Initiative, also known as “Second Chance Pell.”</p>
<p><a href="https://www.insidehighered.com/news/2016/06/24/us-expands-pell-grant-program-12000-prison">Launched in 2016</a>, Second Chance Pell allowed 67 colleges and universities to enroll incarcerated students using Pell grants on a trial basis.</p>
<p>With over <a href="https://www.vera.org/downloads/publications/second-chance-pell-snapshot-first-three-years.pdf">17,000 students</a> participating in 28 states during the first three years of Second Chance Pell, about <a href="https://www.vera.org/downloads/publications/second-chance-pell-snapshot-first-three-years.pdf">4,450 credentials have been awarded</a> through the program. Most students have obtained certificates, followed by associate degrees, then bachelor’s degrees.</p>
<p>In 2020, the <a href="https://www.ed.gov/news/press-releases/secretary-devos-expands-second-chance-pell-experiment-more-doubling-opportunities-incarcerated-students-gain-job-skills-and-earn-postsecondary-credentials">program was expanded</a> to allow an additional 67 colleges and universities to serve even more students.</p>
<h2>No shortage</h2>
<p>Now that Pell grants are being restored for the incarcerated, it is expected that 64% of people in state and federal prison – or <a href="https://www.vera.org/downloads/publications/investing-in-futures.pdf">half a million people</a> – will be eligible for federal student aid.</p>
<p>There’s no shortage of colleges eager to serve this population. Consider the fact that in the second round of Second Chance Pell, <a href="https://www.ed.gov/news/press-releases/secretary-devos-expands-second-chance-pell-experiment-more-doubling-opportunities-incarcerated-students-gain-job-skills-and-earn-postsecondary-credentials">180 colleges applied, with only 67 selected</a>.</p>
<p>Second Chance Pell currently requires programs to incorporate <a href="https://www2.ed.gov/about/offices/list/ope/pell-secondchance.pdf">three crucial components</a>. </p>
<p>Here are the three components:</p>
<p>1) Offering credentials that prepare students for <a href="https://www.ncsl.org/research/labor-and-employment/barriers-to-work-individuals-with-criminal-records.aspx">high-demand fields that are accessible</a> to people with criminal records.</p>
<p>2) Ensuring programs provide students with assistance transferring their credits or enrolling on campus if they are released before they earn a credential.</p>
<p>3) Requiring reentry services to help students address other needs such as housing, employment and various forms of treatment.</p>
<h2>Accountability</h2>
<p>Although the government is lifting the ban on federal student aid to the incarcerated, colleges will not be able to provide prison education without accountability. There are <a href="https://beta.documentcloud.org/documents/20433222-bills-116hr133sa-rcp-116-68">requirements to evaluate</a> the programs. Among other things, schools must assess various outcomes, such as whether the programs improve prison safety and how many participants earn degrees or continue their education upon release. The evaluations will also look at how many participants get jobs or return to prison.</p>
<p>If successful, the outcomes of Pell restoration will mirror the data that already show the <a href="https://www.vera.org/downloads/publications/investing-in-futures.pdf">benefits of prison college programs</a> – increased levels of educational attainment, more employment opportunities, higher earnings and safer communities.</p><img src="https://counter.theconversation.com/content/152428/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The University of Baltimore is a Second Chance Pell Site and receives Pell Grant funding from the U.S. Department of Education, Second Chance Pell Experimental Site Initiative. </span></em></p>For the first time since 1994, incarcerated individuals can get federal aid to pay for college. A prison education scholar explains how higher education helps those who have run afoul of the law.Andrea Cantora, Associate Professor of Criminal Justice, University of BaltimoreLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1180802019-05-31T13:27:26Z2019-05-31T13:27:26ZThe Augar Review: what it could mean for students and universities<p>After many months of delay, while it was caught up in the policy vacuum created by Brexit, the <a href="https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/805127/Review_of_post_18_education_and_funding.pdf">Augar Review has finally been published</a>. </p>
<p>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 <a href="https://theconversation.com/universities-in-crisis-why-a-cut-in-tuition-fees-and-longer-loan-period-would-make-most-students-worse-off-118078">headline cut to tuition fees</a>, 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. </p>
<p>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. </p>
<p>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. </p>
<p>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 <a href="https://theconversation.com/universities-in-crisis-why-a-cut-in-tuition-fees-and-longer-loan-period-would-make-most-students-worse-off-118078">make many graduates worse off</a> – 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. </p>
<h2>The impact for students</h2>
<p>The ways in which such changes to funding might impact <a href="https://www.bbc.co.uk/news/education-40511184">student participation</a> are complex. As <a href="https://www.tandfonline.com/doi/abs/10.1080/0309877X.2013.778966">research regularly shows</a>, for most students only significant changes in on-course costs influence their choices about where and what to study. </p>
<p>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.</p>
<p>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.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/277384/original/file-20190531-69059-tk6fro.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/277384/original/file-20190531-69059-tk6fro.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=338&fit=crop&dpr=1 600w, https://images.theconversation.com/files/277384/original/file-20190531-69059-tk6fro.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=338&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/277384/original/file-20190531-69059-tk6fro.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=338&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/277384/original/file-20190531-69059-tk6fro.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=424&fit=crop&dpr=1 754w, https://images.theconversation.com/files/277384/original/file-20190531-69059-tk6fro.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=424&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/277384/original/file-20190531-69059-tk6fro.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=424&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">The reform could see loans renamed as student contributions.</span>
<span class="attribution"><span class="source">Shutterstock</span></span>
</figcaption>
</figure>
<p>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. </p>
<p>Looking at <a href="https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/805103/ANNEX_Estimating_the_lifetime_contributions.pdf">projections over the 40 years</a>, 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.</p>
<p>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.</p>
<h2>A step back from marketisation?</h2>
<p>While the headline from the report may have become the almost 20% reduction in maximum undergraduate fees in England, <a href="https://www.universitiesuk.ac.uk/news/Pages/Top-up-guarantee-needed-from-government-if-fees-are-cut,-warns-UUK.aspx">vice-chancellors want to know more</a> about how this will be implemented. </p>
<p>The sector estimates that the <a href="https://www.universitiesuk.ac.uk/news/Pages/Top-up-guarantee-needed-from-government-if-fees-are-cut,-warns-UUK.aspx">funding gap will be around £1.8 billion</a> 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.”</p>
<p>This could prove to be the first step in a retreat from <a href="https://www.tandfonline.com/doi/full/10.1080/03054985.2016.1184870">David Willett’s package of reforms</a> 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 <a href="https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/31384/11-944-higher-education-students-at-heart-of-system.pdf">Students at the Heart of the System</a>, a white paper that aimed to create a system more responsive to student demand. Or <a href="https://fabians.org.uk/the-marketisation-of-higher-education/">as its critics would say</a>, to marketise higher education.</p>
<p>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 <a href="https://www.gov.uk/government/news/prime-minister-launches-major-review-of-post-18-education">on the original thinking behind this exercise</a> and allocate funding with all post-18 education options and students in mind.</p><img src="https://counter.theconversation.com/content/118080/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Helen Carasso has received funding for research through an ESRC research centre.</span></em></p>Many of the new proposals would leave the wealthiest students and graduates better off.Helen Carasso, Research Lecturer in Higher Education Policy, University of OxfordLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/924862018-02-27T12:47:49Z2018-02-27T12:47:49ZSix ways to bridge the gap between rich and poor at university<figure><img src="https://images.theconversation.com/files/208068/original/file-20180227-36686-2faobv.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Graduation day.</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/portsmouth-july-20-graduation-ceremony-university-601347749">edella/Shutterstock.</a></span></figcaption></figure><p>Theresa May’s <a href="http://www.bbc.co.uk/news/education-43106736">year-long review of student funding</a> offers a real opportunity to solve the big problems around tuition fees and financial support at UK universities. </p>
<p>As part of our <a href="http://www.bath.ac.uk/education/research/projects/geographies-higher-education/">research</a> on how young people from different places and backgrounds transition into university, we spoke with more than 180 young people from across Scotland, Northern Ireland, Wales and each region of England, and analysed detailed student records to track the movements of half a million students who entered university for the first time, over recent years. </p>
<p>Here we present six suggestions, based on our findings, that could help make going to university a real option for students of all backgrounds. </p>
<h2>1. Lower the price of leaving home</h2>
<p>We found evidence from talking to young people that the poorest are often highly conscious of the cost of living at university. This can limit their university choices: some will rule out a university because of the high cost of accommodation. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/208057/original/file-20180227-36686-1rg4zuf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/208057/original/file-20180227-36686-1rg4zuf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=389&fit=crop&dpr=1 600w, https://images.theconversation.com/files/208057/original/file-20180227-36686-1rg4zuf.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=389&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/208057/original/file-20180227-36686-1rg4zuf.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=389&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/208057/original/file-20180227-36686-1rg4zuf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=489&fit=crop&dpr=1 754w, https://images.theconversation.com/files/208057/original/file-20180227-36686-1rg4zuf.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=489&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/208057/original/file-20180227-36686-1rg4zuf.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=489&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">UEA’s ziggurats: it costs to live on campus.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/23351536@N07/15016843422/sizes/l">kaysgeog/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc-nd/4.0/">CC BY-NC-ND</a></span>
</figcaption>
</figure>
<p>We found that young people in different parts of the UK had different attitudes towards the costs of study, which influenced their choices about going to university and whether or not to leave home. Our <a href="https://www.suttontrust.com/research-paper/home-and-away-student-mobility/">recent research for the Sutton Trust</a> revealed that disadvantaged students across the nation were least likely to leave their parents’ home, and there was some evidence that the rise in tuition fees strengthened this trend. </p>
<p>The government should consider either regulating accommodation costs, or providing funding that takes differences in cost into account – for example by weighting support according to the cost of accommodation at the student’s chosen university.</p>
<h2>2. Cater for commuters</h2>
<p>The number of students living at home while at university rose from 278,555 in 2007-08 to 328,675 in 2015-16. That means more students are commuting, but these costs aren’t accounted for in current packages of financial support. </p>
<p>Some institutions have more commuter students than others. London universities including the London School of Economics and Political Science (LSE), the School of Oriental and African Studies (SOAS) and St Mary’s University College Twickenham have all seen 10% increases in the proportion of their new undergraduate students who commute. Staffordshire University, Stirling University, the University of Cumbria and the University of East Anglia have also seen big increases. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/208060/original/file-20180227-36703-1n7n8cn.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/208060/original/file-20180227-36703-1n7n8cn.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/208060/original/file-20180227-36703-1n7n8cn.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/208060/original/file-20180227-36703-1n7n8cn.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/208060/original/file-20180227-36703-1n7n8cn.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/208060/original/file-20180227-36703-1n7n8cn.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/208060/original/file-20180227-36703-1n7n8cn.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Joining the crush: London Underground.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/tompagenet/6850442869/sizes/l">tompagenet/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span>
</figcaption>
</figure>
<p>Clearly, this requires tailored responses from the universities, based on their local geography and the types of courses affected. But there are some changes which could make life better for commuter students across the board. Rescheduling classes to avoid early starts (when commuting may be more difficult or expensive), having greater flexibility about office hours and considering forms of online learning could help. </p>
<p>These changes need to prioritise the needs of commuter students, without increasing workloads for lecturers, who are often already over-stretched.</p>
<h2>3. Help pay for transport</h2>
<p>There’s not enough support for students who commute. First-time students who live in university accommodation often live close by to essential academic and pastoral support services, such as the library, lecturers’ offices, study skills workshops and study spaces and facilities. But it’s harder for commuter students to access these services. </p>
<p>Transport should be subsidised for students who commute, in the form of petrol vouchers, car sharing schemes or extended subsidised bus services – whichever is suitable. An extended 18 to 25 student railcard could also offer students who have to commute during peak times the same one third discount, which currently only applies to off-peak fares.</p>
<h2>4. Admit there’s a diversity problem</h2>
<p>Universities <a href="http://www.bath.ac.uk/publications/diverse-places-of-learning-home-neighbourhood-ethnic-diversity-ethnic-composition-of-universities/attachments/Diverse-places-of-learning.pdf">are highly segregated</a> along the lines of race and ethnicity, and some universities are substantially less diverse than their surrounding areas. </p>
<p>For instance, the Universities of Birmingham or Leicester are substantially more ethnically mixed than similar institutions. But they are 10% less ethnically mixed than Birmingham City University, Aston University or De Montfort University. London’s elite arts and music colleges and institutes do not reflect the super diverse population of the capital. This stands in direct contrast to universities like the University of East London, London Metropolitan University and City, University of London. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/208064/original/file-20180227-36674-5u56aa.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/208064/original/file-20180227-36674-5u56aa.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=429&fit=crop&dpr=1 600w, https://images.theconversation.com/files/208064/original/file-20180227-36674-5u56aa.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=429&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/208064/original/file-20180227-36674-5u56aa.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=429&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/208064/original/file-20180227-36674-5u56aa.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=539&fit=crop&dpr=1 754w, https://images.theconversation.com/files/208064/original/file-20180227-36674-5u56aa.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=539&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/208064/original/file-20180227-36674-5u56aa.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=539&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Graduation day at the University of Bradford.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/atoach/11227914955/sizes/l">Tim Green aka atoach/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
</figcaption>
</figure>
<p>There is no simple solution for dealing with the ethnic and socio-economic segregation of higher education. Oxford’s intake won’t echo that of Bradford (an institution with an ethnically diverse, working-class intake) any time soon. Too many vested interests mean that the most elite institutions will remain predominantly white and middle-class for the foreseeable future.</p>
<p>This should not prevent the work needed to make universities more diverse, which includes addressing the content of the curriculum, as well as perceptions about different courses and institutions. But we should not expect that the majority of working-class, ethnic-minority students, coming from families with no or little university experience, will want to move away for university. </p>
<h2>5. Bring back the bursary</h2>
<p>The lack of diversity in universities creates serious inequalities in student finance. In particular, it means that the greatest financial support <a href="http://www.mdpi.com/2227-7102/6/1/5/htm">is available to</a> the most academically-able disadvantaged students. In effect, bursaries are concentrated in the wealthiest institutions, with the smallest number of working-class and ethnic minority students. </p>
<p>It’s time to revisit the idea of a <a href="http://www.hepi.ac.uk/wp-content/uploads/2014/02/37NationalBursaryfull.pdf">national bursary system</a>. There’s also a clear desire among students to bring back maintenance grants on a universal basis, alongside additional means-tested support. Given we live in an era of substantial generational inequality, these moves should be seriously considered.</p>
<h2>6. Help universities reach out</h2>
<p>Efforts to help students from disadvantaged backgrounds to attend university are unevenly concentrated across the country. In particular, third sector outreach and social mobility charities are overly concentrated on London, despite attempts by some organisations to expand their efforts. </p>
<p>There’s a skew of cultural and economic resources and activities towards the capital, which directly affects outreach and widening participation activities. For example, funding for the National Collaborative Outreach Programme currently stands at <a href="http://www.parliament.uk/business/publications/written-questions-answers-statements/written-question/Commons/2017-12-06/118007/">£60m a year</a> – less than the <a href="https://www.timeshighereducation.com/news/aimhigher-brought-down-by-coalition-axe/414416.article?storycode=414416">£78m a year</a> given to Aim Higher, which did a similar job on university outreach, just before its closure in 2010-11. </p>
<p>Government needs to act to address this imbalance. The return of a scheme like Aim Higher would do much to resolve the geographical imbalances in widening participation efforts run by charities which – despite <a href="http://www.thebrilliantclub.org/about-the-brilliant-club/our-strategy-the-path-to-outcomes/">notable successes</a> – have failed to fill the gap.</p><img src="https://counter.theconversation.com/content/92486/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Michael Donnelly receives funding from the Economic and Social Research Council (award no. ESN02121/1). </span></em></p><p class="fine-print"><em><span>Sol Gamsu does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>New research reveals that poorer students are less likely to leave home for university – and that has serious impacts on their experience.Michael Donnelly, Lecturer, Department of Education, University of BathSol Gamsu, Researcher, University of BathLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/911822018-02-20T12:17:44Z2018-02-20T12:17:44ZWhat you need to know about the tuition fee review — and how it could affect students<figure><img src="https://images.theconversation.com/files/206974/original/file-20180219-116365-lo3x52.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">England has one of the most expensive systems of university tuition in the world.</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/download/success?src=gTAO4cBRXOHO6m29yTWV7g-1-67">shutterstock</a></span></figcaption></figure><p>The long awaited <a href="https://www.gov.uk/government/news/prime-minister-launches-major-review-of-post-18-education">review of funding</a> across the whole of English higher and further education has been announced by Theresa May – signalling changes to undergraduate fees and loans (again). </p>
<p>The review fulfils a commitment made in the <a href="https://www.conservatives.com/manifesto">2017 Conservative manifeso</a> and can be seen as a move by the prime minister to assert her authority over education policy now her new team is in place following the recent <a href="https://theConversation.com/is-that-it-how-theresa-may-fumbled-her-cabinet-reshuffle-89877">reshuffle</a>.</p>
<p>The government is frustrated nearly all university courses now cost £9,250 a year and wants to encourage some sort of variation in fees. Interviewed in the <a href="https://www.thetimes.co.uk/article/education-secretary-damian-hinds-students-to-get-cheaper-places-at-university-htqxq326z">Sunday Times</a>, the new education secretary, Damian Hinds, said the fees for a degree course should reflect: </p>
<blockquote>
<p>A combination of three things: the cost (to the university) to put it on, the benefit to the student and the benefit to our country and our economy.</p>
</blockquote>
<p>This approach would produce <a href="http://www.bbc.co.uk/news/education-43075769">variable fees</a>, with arts and social science courses being cheaper. <a href="https://theconversation.com/should-students-pay-different-fees-for-university-courses-63384">Australia already has fee bands</a> – with law, medicine, accounting and economics subjects in the highest fee band, and nursing and humanities among the lowest. “National priority” subjects – such as mathematics and sciences – have been charged at an ever lower, subsidised rate.</p>
<p>While there may be some logic to varying fees for different subjects, a model along these lines would create endless disputes. Similarly, a model based on graduate earnings would only serve to reinforce the idea that the only benefits of a degree (to the graduate and to the country) are economic.</p>
<h2>Why do we need a review?</h2>
<p>The review is unlikely to develop new funding models, rather it will help the government choose which they think is best. There are various ways of funding undergraduate education – and many have already been tried or proposed. </p>
<p>Under the <a href="https://theconversation.com/most-graduates-will-never-pay-off-their-student-loans-80582">current system</a>, students can take out loans to cover their fees and living costs. Repayments of 9% of their salary start when they earn £21,000 (rising to £25,000 from April).</p>
<p>Advocates of this model, such <a href="https://www.conservativehome.com/platform/2018/02/david-willetts-even-marx-agrees-that-corbyns-approach-to-higher-education-funding-is-unfair.html">Lord David Willets</a>, argue that a graduate only pays for their education when they are benefiting from higher earnings – so fees should not put anyone off going to university. But some groups, such as <a href="https://www.suttontrust.com/newsarchive/18000-fewer-mature-students-apply-university-since-fees-increase/">mature students</a>, are discouraged from applying by the current price tag. </p>
<p>Before this system, a means-tested fee model operated in England between 1998 and 2005. This meant a student’s fee level was based on their parents’ income. The fees were capped at £1,000 but there were no student loans available for fees. At the time, although a third of students paid nothing, this was perceived as the <a href="https://www.theguardian.com/education/2002/dec/04/students.money">abolition of free education</a>. But university <a href="http://www.historyandpolicy.org/policy-papers/papers/university-fees-in-historical-perspective">fees weren’t actually new</a>. From 1962, students from wealthier families paid fees as part of the then new <a href="http://researchbriefings.files.parliament.uk/documents/RP97-119/RP97-119.pdf">students grants system</a>.</p>
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<img alt="" src="https://images.theconversation.com/files/206977/original/file-20180219-116337-1xkj7eb.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/206977/original/file-20180219-116337-1xkj7eb.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=401&fit=crop&dpr=1 600w, https://images.theconversation.com/files/206977/original/file-20180219-116337-1xkj7eb.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=401&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/206977/original/file-20180219-116337-1xkj7eb.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=401&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/206977/original/file-20180219-116337-1xkj7eb.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/206977/original/file-20180219-116337-1xkj7eb.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/206977/original/file-20180219-116337-1xkj7eb.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Theresa May has announced an independent review of fees and student finance.</span>
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<p>Liberal Democrat leader <a href="https://www.standard.co.uk/news/politics/sir-vince-cable-reveals-plans-to-replace-student-fees-with-tax-a3634761.html">Vince Cable</a> has endorsed the option to replace fees with a “graduate tax”. Advocates of this idea argue it would reduce the amount younger people pay, double the amount of money currently raised for the treasury and <a href="http://www.ucl.ac.uk/ioe/news-events/news-pub/sep-2017/ioe-academics-propose-graduate-tax-replace-tuition-fees">end inter-generational unfairness</a>.</p>
<p>The current Labour policy is to <a href="https://theconversation.com/what-each-party-manifesto-means-for-student-voters-78634">abolish undergraduate fees</a> completely. But this option has already been ruled out by the Conservatives. </p>
<h2>What about universities?</h2>
<p>There are no guarantees universities will be fully compensated for the money lost through a reduction or abolition of fees. </p>
<p>This is because when higher education is funded through general public spending, it typically loses out to compulsory education. This has been true in the UK historically, and is the case in <a href="https://theconversation.com/short-sighted-budget-means-universities-cant-deliver-their-full-economic-benefit-77474">Australia</a>. </p>
<p>Universities cannot be sure that all the money raised through a graduate tax will find its way to them either. So university leaders are worried about a return to the previous situation where higher education was not as well funded at it is today.</p>
<h2>Reforming the system</h2>
<p>Perhaps the problem then isn’t the current system, but how it has been implemented. But it could easily be modified – a simple move would be to reduce the headline fee. <a href="https://londoneconomics.co.uk/wp-content/uploads/2018/02/LE-Student-support-modelling-13-02-2018.pdf">London Economics</a> looked into the reduction of fees to £6,000 and found it would cost the government £1.169 billion – assuming universities received the same funding after the cut. </p>
<p>But the previous education secretary, <a href="https://www.theguardian.com/education/2018/feb/18/cutting-tuition-fees-would-backfire-justine-greening-warns-theresa-may?CMP=share_btn_link">Justine Greening, has cautioned against cutting fees</a>, arguing it could harm social mobility. </p>
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<img alt="" src="https://images.theconversation.com/files/207066/original/file-20180220-116351-133n8pm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/207066/original/file-20180220-116351-133n8pm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/207066/original/file-20180220-116351-133n8pm.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/207066/original/file-20180220-116351-133n8pm.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/207066/original/file-20180220-116351-133n8pm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/207066/original/file-20180220-116351-133n8pm.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/207066/original/file-20180220-116351-133n8pm.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Theresa May hopes to end ‘outdated attitudes’ that favour universities over technical education.</span>
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<p>The current system would also be viewed more favourably if the interest charged on the loans was reduced – something <a href="http://www.parliament.uk/business/committees/committees-a-z/commons-select/treasury-committee/news-parliament-2017/student-loans-report-published-17-19/">recommended by the Treasury Committee of MPs</a>. The system would also receive a boost in popularity if maintenance grants were reintroduced – this would prevent poorer students graduating with the largest debts.</p>
<h2>The vocational option</h2>
<p>The strong emphasis on technical and vocational education in the <a href="https://www.gov.uk/government/speeches/pm-the-right-education-for-everyone">prime minister’s speech</a> may also lead to more employer sponsored routes. This could be based on the <a href="https://www.gov.uk/government/publications/apprenticeship-levy-how-it-will-work/apprenticeship-levy-how-it-will-work">Apprenticeship Levy</a>, and might help reduce the funding gap universities fear. And it has been <a href="http://www.telegraph.co.uk/education/2017/07/25/employers-should-help-shoulder-cost-student-tuition-fees%20benefit%20from%20hiring%20graduates%20sponsorship">argued</a> that because employers benefit from the knowledge and skills graduates bring, they should contribute to the cost of their studies.</p>
<p>The various options will be explored by a <a href="https://www.gov.uk/government/publications/review-of-post-18-education-and-funding-terms-of-reference">review group</a> who will finish their work in early 2019, so any changes will not affect students going to university this year.</p><img src="https://counter.theconversation.com/content/91182/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Andrew Gunn has received funding from Worldwide Universities Network, the British Council (administering the Newton Fund), the UK Higher Education Academy, Kantar Public, UEFISCDI Romania, the UK Political Studies Association, the New Zealand Political Studies Association and the UK Quality Assurance Agency. Andrew Gunn concurrently holds visiting academic positions internationally.</span></em></p><p class="fine-print"><em><span>Helen Carasso has received funding for research through an ESRC research centre.</span></em></p>Theresa May is under pressure to tackle tuition fees after Labour’s pledge to scrap them was highlighted as a key issue for young voters.Andrew Gunn, Researcher in Higher Education Policy, University of LeedsHelen Carasso, Course Leader - MSc in Higher Education Policy, University of OxfordLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/879002017-11-23T11:41:56Z2017-11-23T11:41:56ZDavid Willetts interview: ‘We need a broader view of what constitutes a good university’<p><em>David Willetts was minister for universities and science in the coalition government from 2010 to 2014, when the cap on tuition fees was raised to £9,000 per year in England and Wales. In his new book, <a href="https://global.oup.com/academic/product/a-university-education-9780198767268?cc=gb&lang=en&">A University Education</a>, he provides a defence of that policy following intense recent debate about it.</em> </p>
<p><em>Willetts, who now sits in the House of Lords and is also the executive chair of the <a href="http://www.resolutionfoundation.org/">Resolution Foundation</a>, sees the fee rise as pivotal in increasing the number of people benefiting from higher education, a process he is keen to see continue further. But the book goes far beyond the tuition fee debate. It provides an engaging and authoritative guide to “the university” as an institution which aims to instil “values of pursuing truth through reason and evidence” – values of particular importance in the current context of “fake news” and populist politics.</em> </p>
<p><em>But while universities may share this overarching aim, Willetts also argues that we need to celebrate diversity in our higher education (HE) sector, rather than a single idea of what constitutes a top university. I sat down with him for The Conversation.</em></p>
<p><strong>Karen Rowlingson: You show, in the book, that university education benefits society as well as individuals. So should the funding of universities also be better balanced between society and individual students? Would one possibility be to reduce the fee and raise extra through general taxation and then change the repayment mechanism so that those on higher earnings pay more back?</strong></p>
<p>David Willetts: I think actually the way that you can reflect and put in public support is different and I identify the ways we do. First of all … we should meet the extra cost of higher cost subjects. Secondly, students who for whatever reason … may find it harder to benefit from HE, for example disabled students, students from tough backgrounds, there’s still some funding – not as much as there was – but there’s still some funding for the extra costs of those students </p>
<p>And then thirdly, writing off the repayments from people with low incomes… So I think that’s a well-designed, well-targeted way of using public resource to support people in higher education. </p>
<p><strong>But still the £9,250 a year fee is a very large share of the cost and is it fair that younger generations have to pay so much more for their higher education than older generations did?</strong> </p>
<p>I understand that argument. The good news is that I think most 18-year-olds do understand the reality that it is not an amount of money they have to pay up front. The real thing that matters is it’s 9% of earnings above £21,000 – of course that’s going up to 9% of <a href="https://www.theguardian.com/education/2017/oct/01/tuition-fee-repayment-earnings-threshold-rise-to-25000">earnings above a threshold of £25,000</a>.</p>
<p><strong>Is that something you agree with, changing the threshold?</strong></p>
<p>Well, I personally didn’t think that 9% on earnings above £21,000 was unduly onerous. It meant that if you were earning £25,000 a year you were paying back 9% on the final £4,000 so that was £360 a year, £30 a month. If there were resources available to help people in HE, increasing the repayment threshold would not have been my priority. It’s good that graduates are going to be paying back a lower proportion of their earnings, but as I say, I think one could have spent the money in other ways. </p>
<p><strong>You talk about graduate tax in the book and that’s one alternative that’s been suggested. What are your thoughts on that?</strong> </p>
<p>Basically what we’ve got is a repayable education voucher for HE. You’re given an education voucher and told, take it to the university. The university has to decide whether or not to admit you and then if you end up in a well-paid job, we’ll gradually reclaim it off you. I know the graduate tax is now back on the agenda, but it does have a range of defects. </p>
<p>First of all it brings the whole system back into tax and public spending. And it’s no longer the case that the individual is bringing the resource to educate him or her, instead it’s coming as public expenditure out of central government. My view is that has never worked to the advantage of higher education, it’s always ended up being at the back of the queue.</p>
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<p>Secondly, you will expect some people to pay back a lot more than the cost of their higher education … That means if I am studying economics at the LSE or law at Oxford and some others which we know about, there are now massive penalties for me to study in the UK rather than going abroad. You’re saying, by virtue of having done this course, you will be paying back a very large amount of money.</p>
<p>Thirdly, it doesn’t solve today’s funding problem. The big design question is do you collect it off current graduates? There’s nothing in the system that tells the Inland Revenue I’m a graduate, so you need some massive exercise, to do a sort of Doomsday Book exercise, to try and work out the people in the country who are graduates. … You can only roll it in for future generations, so once you say it’s for current students and their successors, it doesn’t solve a problem for about ten years.</p>
<p>The last Labour government, encouraged by Gordon Brown, looked at it very carefully and all the people who were involved in the debate then, including Andrew Adonis … concluded that a graduate tax is a bad idea. So I don’t think it’s a flyer. Labour tried to make it work. All three political parties when they’ve actually been in office have ended up with this model that we’ve got. </p>
<p><strong>When I talk to my own students it’s the level of maintenance support which is a key problem. What do you think we should do about that?</strong> </p>
<p>I completely agree with you … The pressure point is cash to live on while you’re at university. And in terms of access that’s the pressure point. When I was in office we increased the total amount of maintenance cash available for students and it’s gone up a bit more since. But … if there were any spare resource around, my priority would be more cash for students to help with their living costs while at university.</p>
<p><strong>You talk about the benefits of the current system in increasing the numbers going to university. Do you think there is any kind of limit to the numbers of people that should go to university?</strong> </p>
<p>I don’t believe in government setting a target. So I don’t believe in the Blair 50% target [of people going to university] but I do absolutely think that in modern societies for deep social, cultural and economic reasons, the numbers going to university have increased, are increasing and ought not to be diminished. So if I look forward I see no reason why it should stop at 50%. </p>
<p>And also, this is a good thing, we’ve <a href="https://www.theguardian.com/education/2017/sep/28/almost-half-of-all-young-people-in-england-go-on-to-higher-education">achieved 50% for women</a>. We’ve not achieved 50% for men and so I think it would be good if men could catch up with the academic achievements of women. </p>
<p><strong>Should we move towards a more <a href="http://www.hepi.ac.uk/2017/07/20/new-report-calls-comprehensive-universities-improve-social-mobility/">comprehensive system of universities</a> that people could go to locally, perhaps?</strong> </p>
<p>I think the English model is distinctive and I think it’s a good thing that it’s distinctive. The idea of going away from home to university I’m sure goes back to the Oxford and Cambridge model and then this extraordinary 600 years when they were the only two English universities suppressing attempts at creating other universities. Not until the 1830s did we get any further universities in England. </p>
<p>Now one of the effects of that was to establish very clearly the idea you went away from home to university and it is a really important rite of passage, especially in England. And I think it’s a kind of managed transition to adulthood, it’s about the most powerful effective form that the modern Western world has got. </p>
<p>So I do understand the value of people leaving home to go to university. I wouldn’t want to see a situation where poor kids stayed at home and rich kids went away to university. </p>
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<span class="caption">Other doors are available.</span>
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<p><strong>You talk a lot about digital innovation in education … will that help mature students who are less likely to go to university now? And how do we reflect on that with the experience of the Open University at the moment which is going through a <a href="https://www.theguardian.com/education/2015/oct/20/open-university-strike-ou-regional-centres-moocs">really difficult time</a>, but which is digitally advanced?</strong> </p>
<p>I always kind of plead guilty on this, that one of the things in my time as universities minister that I most regret is the <a href="https://theconversation.com/part-time-students-feel-squeezed-out-by-universities-obsessed-with-teenagers-47447">decline</a> in the number of mature, part-time students. It was not the plan. What I thought we would achieve is by extending more fee loans to more mature students that they would take them out. But actually the evidence is that whilst the classic young person going to university to get their first degree understands and is comfortable with the graduate repayment scheme; that’s not the case for mature students … That’s where we both need technological innovation and we also need more funding. </p>
<p><strong>You challenge the predominant, uni-dimensional hierarchy of universities and suggest that we should recognise the strength of some universities outside of the Russell Group. Can you say more about this?</strong></p>
<p>One of the themes running through the book is that our understanding of what constitutes a good university is incredibly limited. When you look at the ones that get to the top of the conventional rankings, you do it above all by high-quality research and high prior attainment of your students. That is one model and it’s a good model. But my frustration is people think that means that if you’re a university that focuses more on teaching than on research and which takes students with lower priority attainments, that means you’re a less good university. It doesn’t. It means you’ve got a distinct and different mission. </p>
<p>So I’m trying to get people to have a broader view of what constitutes a good university. There are a range of ways of being world class and taking kids with lower attainment – pushing them forward and transforming their life chances with strong links to local businesses is a fantastic way of being a world class university. </p>
<p><strong>So how can we do that in practice? Shall we have different kinds of league tables?</strong> </p>
<p>Whatever the issues around the <a href="http://www.hefce.ac.uk/lt/tef/">Teaching Excellence Framework</a> (TEF) – and of course ministers have made clear from the beginning that it’s a kind of first go, it’s open to revision and amendment – the crucial prize of the TEF is at last we’ve got a league table that doesn’t have exactly the same structure as every other league table. Although it is very tough really to measure teaching, nevertheless I think as the big data revolution reaches HE we will have increasing opportunities to do so. </p>
<p><strong>Given that there are already many different universes serving different missions, do you think there’s a gap? If a new university were to be set up tomorrow to meet today’s needs, what would that new university look like?</strong> </p>
<p>The teaching of STEM [science, technology, engineering and mathematics] would be a very strong candidate because as there is public funding for the higher-cost subjects and STEM of course comes with higher cost, eligibility for that public funding has become a kind of barrier to entry for new providers in this area. And that’s particularly acute with medical schools which have very high costs and where hitherto there’s been a kind of restriction on the numbers of medical students and NHS-linked medical schools. There’s an Aston initiative on medical education, and I think Buckingham are trying to get into medical education. </p>
<p>And then on engineering there’s this <a href="http://www.olin.edu/">Olin model</a> which is a different approach to engineering that is willing to take on people who may not have got A-levels in maths and physics. That’s also very interesting. Engineering is a case study of why I care so much about broadening education and not having so much early specialisation. If you say in order to do engineering at university you have to have A-levels in physics and maths, you’re down to about 4% of teenagers being eligible to do engineering. If classics was still working on the basis you’ve got to have A-levels in Latin and Greek, classics would have died as a discipline in English universities, but was obliged to change it sort of as the A-levels declined. </p>
<p><strong>What about the idea of <a href="https://www.nesta.org.uk/sites/default/files/the_challenge-driven_university.pdf">challenge-led universities</a> which bring together disciplines across the STEM/non-STEM divide to try to tackle major problems globally and nationally?</strong></p>
<p>It’s not that I think that STEM is the only route to truth. The two cultures problem in England is acute, unusually acute, because of early specialisation. </p>
<p>I argue that universities have quite a high part of the responsibility for early specialisation because they’re looking for people who already know a lot about a very narrow range of subjects. [That is] such a contrast with America where the most popular single course specified when you apply for an American university is undeclared. </p>
<p>As soon as you think about a university recruitment system where the biggest single group of people applying are called undeclared, and you think through how a classic English university would operate if the biggest single category of students had not yet decided what they’re going to study, you realise the incredible power of the particular way we do admissions in England. </p>
<p><strong>How do you think Brexit is going to impact on universities?</strong></p>
<p>Well, I was a Remainer and there clearly are massive risks for universities from Brexit. On the research side … the fact that they’ve just started the FP9 discussions in Brussels <a href="http://www.researchresearch.com/news/article/?articleId=1371299">with no British representatives</a> around the table as they start shaping the research priorities for that next seven year programme in the EU is so dispiriting and frustrating.</p>
<p>For student recruitment, the evidence is a bit more complex because of course one of the results of Brexit has been a fall in the value of the pound. So that has meant we look cheaper if you’re coming from abroad. Now on the other hand, EU students may lose their access to loans but we don’t know that. You could imagine in the negotiations about the future long-term relationship that we say we will extend loans to British students to study in the EU in return for EU students having loans from their government, or from us, or some combination to come and study here. So I think that it is all up for negotiation and we must hope that we can signal that we’re open to students and academics from around the world.</p><img src="https://counter.theconversation.com/content/87900/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Karen Rowlingson does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>As a minister in the coalition government, Willetts introduced £9,000 tuition fees. In an interview as he publishes a new book, he says the system is well-designed and fair.Karen Rowlingson, Professor of Social Policy, University of BirminghamLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/856892017-11-13T12:49:01Z2017-11-13T12:49:01ZThe student finance system needs shaking up – for the sake of poorer students<figure><img src="https://images.theconversation.com/files/193067/original/file-20171102-26430-17p41l3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">shutterstock</span> </figcaption></figure><p>Students from the poorest households in England now graduate with the <a href="http://wonkhe.com/blogs/why-student-loans-are-a-confidence-trick-for-the-85/">highest levels of debt</a>. On average the poorest 40% of students owe around <a href="https://www.ifs.org.uk/uploads/publications/bns/BN211.pdf">£57,000</a> after three years of study, compared with an average of £43,000 for students from the richest third of families.</p>
<p>This outcome is due to the way the student finance system is currently set up. First time undergraduate students can borrow money for both tuition fees and maintenance. But unlike previous years when students from poorer households were also entitled to non-repayable maintenance grants, since 2016 this has been replaced with an “enhanced loan allowance” – which inevitably just leads to more debt.</p>
<p><a href="https://www.sheffield.ac.uk/als/wp">Our recent research</a> found that coupled with higher debts for the poorest students, the inequalities in the funding system are directly impacting students’ day-to-day budgeting, which is creating a number of issues.</p>
<h2>Gaps in the system</h2>
<p>While prospective students <a href="http://journals.sagepub.com/doi/10.1177/0002716217696041">have been found to have significant concerns</a> about the level of debt now associated with university study, figures show <a href="https://www.slc.co.uk/media/8444/slcsfr052016.pdf">nine in ten undergraduates</a> still take out maintenance loans. This is currently a maximum of £8,430 available for full-time students studying away from home, outside of London. </p>
<p>Eligibility for this type of funding is based on household income – which implies <a href="http://www.practitioners.slc.co.uk/media/1158/201718-financial-memorandum.pdf">parents are expected to supplement</a> student budgets. In this way, for many of these <a href="https://policypress.co.uk/student-lives-in-crisis">semi-independent</a> young adults, parental support is a <a href="http://wonkhe.com/blogs/frugality-wont-solve-systemic-student-finance-problems/">financial necessity</a>. </p>
<p>But for students from low income families – not to mention <a href="https://www.theguardian.com/higher-education-network/2015/dec/14/how-can-universities-do-better-for-care-leavers">care leavers</a>, <a href="http://standalone.org.uk/">estranged</a>, and mature students – it is not always possible to fall back on contributions from parents, as one student we spoke to explained:</p>
<blockquote>
<p>For me, if my mum comes to visit me, and doesn’t need me to pay half of the petrol money, that’s a treat.</p>
</blockquote>
<p>These students are then forced to make up this often significant shortfall. Most of the time this means either indebting their future – by using up savings or dipping into private credit – or indebting their present – by having to work part-time to make ends meet.</p>
<h2>Making ends meet</h2>
<p>As part of our research into student experiences of funding university, we <a href="https://www.sheffield.ac.uk/als/wp/stp2013">followed the second cohort of undergraduates</a> under the tuition fee system that has been in place since 2012. We also continued our annual evaluations of available <a href="http://wpreu.group.shef.ac.uk/May17/finance.html">institutional financial support</a>. We saw how poorer students often only had enough savings to balance cash-flow issues across their first year. When this money dried up, students highlighted their growing reliance on commercial credit, such as interest-free student overdrafts. <a href="https://theconversation.com/more-and-more-young-people-are-falling-into-debt-but-its-not-their-fault-86006">These often start at £500 and can go up to as much as £3,000</a>. </p>
<p>We found more students also turn to term-time work over the course of their studies. Our latest institutional survey suggests 37% of undergraduates work while they study full-time. This is consistent with national estimates which show a <a href="https://www.endsleigh.co.uk/press-releases/10-august-2015/">third</a> of <a href="https://www.nus.org.uk/PageFiles/12238/NUS-HSBC-Experience-report-web.pdf">students work alongside their studies</a>. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/193066/original/file-20171102-26432-gopshw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/193066/original/file-20171102-26432-gopshw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/193066/original/file-20171102-26432-gopshw.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/193066/original/file-20171102-26432-gopshw.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/193066/original/file-20171102-26432-gopshw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/193066/original/file-20171102-26432-gopshw.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/193066/original/file-20171102-26432-gopshw.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Balancing the books.</span>
<span class="attribution"><span class="source">Shutterstock</span></span>
</figcaption>
</figure>
<p>Term-time work does of course bring with it a number of benefits beyond improved cash-flow – think new skills, new contacts and <a href="http://www.tandfonline.com/doi/abs/10.1080/13596748.2014.920582">improved time management</a>. But depending on the type of job and contract – as well as the number of hours worked and the flexibility offered – term-time work can put substantial pressure on students and <a href="http://www.tandfonline.com/doi/abs/10.1080/0309877X.2012.666892">their academic work</a>. It can also impact the amount of time students have for extracurricular activities. And on top of the stresses and strains of full-time study, it can start to have an effect on <a href="https://link.springer.com/article/10.1007/s10597-016-0052-0">mental well-being</a>. One of the students we spoke to explained the impact of having a term time job in her third year:</p>
<blockquote>
<p>It made me ill, but I had to get the money. I work all my rent out until the next finance [installment], then I count the weeks to the next finance and split whatever’s left weekly. This semester I was on £9 a week.</p>
</blockquote>
<h2>University bursaries</h2>
<p>This is in part why most universities offer non-repayable bursaries to students from low income backgrounds, in line with <a href="https://www.offa.org.uk/students/introducing-bursaries/">access agreement spending</a>. Like maintenance loan entitlement, <a href="https://www.sheffield.ac.uk/undergraduate/finance/fees/2018/sheffield-bursary">how much bursaries</a> are worth – depends on a student’s declared household income. These are awarded to eligible students automatically in instalments across each academic year. </p>
<p>Our research found these university administered bursaries can help to alleviate day-to-day budgeting concerns, providing students with the extra cash they need to get by – as one student explained:</p>
<blockquote>
<p>[Without the bursary] I’d have to probably work more hours on the job, but that sometimes would clash with lectures. I guess I’d maybe have to make a decision – is the lecture important or not?</p>
</blockquote>
<p>But while these bursaries can provide important support for those most in need, eligibility and the amount available to students differs significantly from <a href="http://www.tandfonline.com/doi/abs/10.1080/03075079.2014.916672?journalCode=cshe20">university to university</a>. This means poorer individuals from universities with higher proportions of eligible students receive less support.</p>
<h2>Access for everyone?</h2>
<p>As the Conservative government scrambles to appeal to <a href="https://theconversation.com/underpaid-overworked-and-drowning-in-debt-you-wonder-why-young-people-are-voting-again-85298">younger voters</a>, it has proposed further changes to the student loan repayment system – and even floated the idea of <a href="http://www.independent.co.uk/news/uk/politics/david-davis-u-turn-university-tuition-fees-cancel-student-debt-a8001891.html">cancelling student debt altogether</a>. </p>
<p>But none of these proposals address the pressing issue of day-to-day budgeting while at university. As our <a href="https://www.sheffield.ac.uk/als/wp">research</a> shows, it will not be solved by students simply being “more frugal” – as <a href="https://www.theguardian.com/money/2017/oct/03/frugal-students-wont-need-help-from-their-parents-says-jo-johnson">universities minister Jo Johnson recently suggested</a>.</p>
<p>What is needed is a dusting down of the old government <a href="https://www.theguardian.com/higher-education-network/2017/sep/07/a-solution-to-the-row-over-tuition-fees-bring-back-maintenance-grants">grant system</a> – complimenting the bursaries offered institutionally – to reach those students most in need. This would help to ensure those from low income households are properly supported, and that they don’t leave university with considerably more debt than their peers.</p><img src="https://counter.theconversation.com/content/85689/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The poorest students are leaving university with the most debt.Rita Hordósy, Post-Doctoral Researcher in Higher Education, University of SheffieldGreg Brown, Widening Participation Researcher and Evaluator, University of SheffieldLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/832502017-09-14T09:10:09Z2017-09-14T09:10:09ZThis is how to stop students dropping out of university<figure><img src="https://images.theconversation.com/files/185844/original/file-20170913-23138-xfcfhd.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>The new university academic year will soon be upon us. Over half a million new hopeful students will begin what should be one of the most important experiences of their lives. Sadly, many of these students will drop out before the end of their first year. </p>
<p>Research indicates that if you are the first in your family to go to university, <a href="https://search-proquest-com.libaccess.hud.ac.uk/docview/1914389552?pq-origsite=summon">come from a deprived economic</a> and social background, and have lower grades, then there is a higher chance you will <a href="https://theconversation.com/which-students-are-most-likely-to-drop-out-of-university-56276">drop out</a> of university.</p>
<p>Critics say this to down to a <a href="http://www.leeds.ac.uk/educol/documents/000000453.htm">failure by universities to adequately support their students</a>. Universities, on the other hand, argue that students decide not to continue with their studies for a number of reasons – such as financial issues, health problems or changes in family circumstances. </p>
<p>To try and combat the number of students dropping out, institutions provide skills support programmes to help students transition from school to university, along with peer mentoring and counselling. But while these are all good ideas – and can potentially benefit all students – there is little evidence they do anything to reduce dropout rates. This is mainly because those students most in danger of dropping out are unlikely to use them.</p>
<h2>Help students stay put</h2>
<p>With all this in mind, there is an increasing recognition that <a href="https://theconversation.com/student-success-why-first-year-at-uni-is-a-make-or-break-experience-21465">universities need to change</a> the way they function. But up until now there has been little in the way of research on how these changes can be made for the better. </p>
<p>This is what our <a href="http://eprints.hud.ac.uk/id/eprint/14068/">recent research</a> focused on. Carried out over seven years, we looked at how changes in the university could improve student retention rates. And we identified a number of alterations universities can make to help students stay on beyond their first year to complete their studies.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/185846/original/file-20170913-23100-okct0s.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/185846/original/file-20170913-23100-okct0s.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/185846/original/file-20170913-23100-okct0s.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/185846/original/file-20170913-23100-okct0s.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/185846/original/file-20170913-23100-okct0s.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/185846/original/file-20170913-23100-okct0s.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/185846/original/file-20170913-23100-okct0s.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Rising numbers of students from more disadvantaged homes are dropping out of universities.</span>
<span class="attribution"><span class="source">Pexels</span></span>
</figcaption>
</figure>
<p>One of the major findings in our research was the argument for dumping the traditional large lecture and replacing it with smaller two-hour seminars. Our findings showed how the seminar system improves attendance and student performance – especially for students with low entry qualifications. Students we spoke to said they liked the smaller seminar structure because they could interact easily with academics and each other. One student explained:</p>
<blockquote>
<p>I thought I would be sitting in a big lecture theatre with loads of other people, this is not like you see it on the telly and stuff, you know with loads of people listening to some professor dude, but it’s okay, it’s a lot like school and I like it because you can get to know people.</p>
</blockquote>
<p>The small group seminars also seem to particularly benefit students who live at home. This is because the classroom is where they spend most of their time while on campus and it allows them to develop a <a href="https://www.heacademy.ac.uk/system/files/what_works_summary_report_0.pdf">a sense of belonging</a> among their peers. And this then helps to reduce the likelihood of dropout.</p>
<p>We also found that using “student friendly” approachable academics to teach first years is another thing that can help. As can ensuring that the key tutor (year tutor) teaches all students. This can enable a strong relationship between students and academics to develop and allows tutors to more easily identify individuals having difficulties.</p>
<h2>Support from day one</h2>
<p>Our research revealed the best indicator of students having problems is their attendance – they simply stop going to classes. Knowing this, students who are missing lectures or seminars can then be approached sooner rather than later – as early as the second week if needed. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/185849/original/file-20170913-23162-t7zsr4.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/185849/original/file-20170913-23162-t7zsr4.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/185849/original/file-20170913-23162-t7zsr4.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/185849/original/file-20170913-23162-t7zsr4.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/185849/original/file-20170913-23162-t7zsr4.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/185849/original/file-20170913-23162-t7zsr4.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/185849/original/file-20170913-23162-t7zsr4.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">A sense of community is important for students.</span>
<span class="attribution"><span class="source">Pexels.</span></span>
</figcaption>
</figure>
<p>We found this intervention is best made by the academic who has closest regular contact with the student. The aim should be to help students make the right decision, not necessarily persuade them to stay. This is important because our research showed that when students were persuaded to stay, it almost always meant problems occurred later and the student left anyway – just with increased debt. </p>
<p>It is clear then that rather than just assuming the student is the problem, there is a lot universities could and should be doing to help with retention rates. And given that recent figures show the number of poor students dropping out of university is at the <a href="http://www.bbc.co.uk/news/education-40429263">highest level in five years</a> this is something that needs tackling sooner rather than later.</p><img src="https://counter.theconversation.com/content/83250/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>One in ten students drop out of uni in their first year.Dennis Duty, Senior Lecturer in Management and Operations, University of HuddersfieldRuth Brooks, Principal Lecturer in Organisation Studies, University of HuddersfieldLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/497552015-10-27T04:12:47Z2015-10-27T04:12:47ZFree university education is not the route to social justice<figure><img src="https://images.theconversation.com/files/99648/original/image-20151026-18440-gcbssy.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">South African student protesters make their feelings clear: education is a right and should be free.</span> <span class="attribution"><span class="source">Reuters/Mike Hutchings</span></span></figcaption></figure><p>“Free education in our lifetime” is the campaign slogan many students have adopted in the recent protests across South Africa against university fee increases. The country’s higher education minister is among those who have replied that, although free education for all university students would be the ideal, it is economically unfeasible right now.</p>
<p>But is it true that in an ideal world higher education would be free – that is, be fully funded by the state? More to the point, would higher education be free in a just society?</p>
<h2>Taxes shouldn’t fund an elite few</h2>
<p>Proponents of free university tuition are right to point out that higher education is a public good. Having well-trained doctors, lawyers, teachers, accountants, managers, engineers, journalists and civil servants around benefits us all. And the critical reasoning skills cultivated by humanities subjects like economics, African studies, classics, political studies and philosophy enhance civil society’s ability to hold government to account.</p>
<p>But it would be naïve to think that school leavers are flocking to the groves of academe in <a href="http://www.dhet.gov.za/DHET%20Statistics%20Publication/Statistics%20on%20Post-School%20Education%20and%20Training%20in%20South%20Africa%202012.pdf">ever increasing numbers</a> out of a sense of civic duty. Higher education is not just a public good. It is also an individual good for those who pursue it.</p>
<p>For one thing, many students find their subject intrinsically interesting and rewarding. At its best higher education is a mind-expanding experience. Just as importantly, once they have successfully completed their degree and entered the job market, graduates have an enormous competitive advantage over those who have no letters after their name. A good university degree can open the way to high-status, high-income job opportunities.</p>
<p>But while everyone pays tax of one kind or another, <a href="http://www.statssa.gov.za/publications/P0318/P03182013.pdf">far fewer</a> than half of South Africans will receive a university education. Currently less than 15% of those over the age of 20 have received a university education - though fortunately that figure is set to rise. Surely it is not fair that the intrinsic rewards and competitive advantage conferred by higher education should be fully funded by taxpayers when only a minority enjoy them.</p>
<p>There are far stronger arguments for making high school education or health care free at the point of use. Everyone can expect to need health care, and <a href="http://www.ci.org.za/depts/ci/pubs/pdf/general/gauge2014/ChildGauge2014_childrencount_education.pdf">almost 100%</a> of South Africans receive some high school education.</p>
<p>So the principal objection to free university tuition is not that it is unfeasible, but rather that it would be unjust. It would be a form of exploitation of the masses of the people by a degree-toting élite. Those of us who embrace the goals of equality and social justice must be far less coy about pointing this out.</p>
<h2>Exploring the options</h2>
<p>I’ve argued that its status as an individual good means higher education should not be fully funded by the state. Equally, its status as a public good means it should not be fully funded by student fees. To the extent that higher education is an individual good, the individuals who benefit from it should pay for it; to the extent that it is a public good, it should be paid for from the public purse. </p>
<p>One can argue about what the exact ratio ought to be, but a 50:50 split between public funding and student fees is an obvious benchmark to begin from.</p>
<p>The recent fee protests have starkly reminded us that many students and school leavers simply cannot afford university fees at their current levels. It would be irresponsible to play down the troubling predicament in which many poorer students find themselves. However, this is not a problem with the current funding model (who pays, and how much). Instead it is a huge problem with the current payment system (how they pay it, and when).</p>
<p>Could full fee payment at the beginning of, or during, a degree be the answer? No. It is evident that making all students pay up front for university tuition would be unfair. This system would tend to exclude talented young people from poorer backgrounds. It would also lead to inefficiency, as society would not benefit from the contribution which its gifted, but less economically advantaged, young people could have made.</p>
<p>What about low-interest government loans to students? These potentially come with problems. The risk of defaulting on a large loan years down the line is one which a poorer student, or their family, will rationally wish to avoid. And loans most certainly do not remedy the unfairness when they are too small. Some National Student Financial Aid Scheme <a href="http://www.nsfas.org.za/NSFAS/STUDENTS/LOANS">loans</a> don’t even cover the full costs of tuition.</p>
<p>Yet student loans can form the basis of a fair payment system. They can do so if they are sufficiently large, and if one aspect of the public contribution to higher education is to eliminate the risks ordinarily bound up with taking out a loan.</p>
<p>This can be achieved by making no part of a student loan repayable until the graduate is earning above a certain threshold amount. The rate of repayment can be accelerated as the graduate’s salary increases. If the graduate’s earnings never rise above the threshold amount, their entire university costs will be for the public account.</p>
<p>This payment system has been successfully introduced in the UK and Australia, and South Africa’s National Student Financial Aid Scheme already embodies it to a limited degree. It ensures that no student pays for the competitive advantage conferred by higher education until and unless it has actually translated into higher relative prosperity for them.</p>
<h2>Fairness is key</h2>
<p>In South Africa, fairness in higher education funding does not require an overhaul of the funding model to eliminate student fees, as many students and their supporters insist. Instead, it requires progressive reform of the current payment system. </p>
<p>At the least, the National Student Financial Aid Scheme must increase the size of its loans, broaden its coverage and raise the threshold earnings level at which repayment kicks in. This is currently set at R30,000 per year. These measures would ensure that no school leaver could rationally be deterred by the payment system from pursuing higher education.</p>
<p>This expansion of the loan scheme would of course require an initial capital investment. There are a variety of ways in which this could be financed. For example, if earlier generations of university graduates paid proportionally less than today’s students for the benefits they received, it would make good sense to impose a special tax on them.</p>
<p>In the medium to long term, South African higher education needs both a fair funding model <em>and</em> a fair payment system. In constructing and maintaining these, we must bear in mind a key insight of modern social democratic politics: full public provision is not always the route to social justice.</p><img src="https://counter.theconversation.com/content/49755/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>George Hull does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>As South Africa’s students call for free university tuition, it’s worth asking whether higher education would be free in a truly just society.George Hull, Lecturer in Philosophy, University of Cape TownLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/326762014-11-13T19:30:27Z2014-11-13T19:30:27ZExplainer: the US student loan problem and how we got here<figure><img src="https://images.theconversation.com/files/61776/original/ky5kns25-1413345964.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">How did US student loan debt get so big?</span> <span class="attribution"><a class="source" href="https://www.flickr.com/photos/thisisbossi/6219725962">Flickr/thisisbossi</a>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span></figcaption></figure><p>The US student loan system is unique in age, size, and scope. Since 1958, the US has had some form of federally sponsored student loan system. Since inception, college and borrowing have become much more popular, and average balances of student loans have also grown. Currently the federal portfolio consists of more than <a href="http://www.consumerfinance.gov/newsroom/student-debt-swells-federal-loans-now-top-a-trillion/">$US1 trillion of debt</a>.</p>
<p>What’s worse is it’s unclear just how much of that money the government is going to get back. The federal government treats student-loan debts as assets because they can’t be discharged under normal circumstances. But that assumption is starting to look at tad optimistic. <a href="http://online.wsj.com/articles/joel-best-and-eric-best-student-loan-debta-federal-toxic-asset-1412204612">Studies by the New York Federal Reserve Bank</a> show that about a third of borrowers under 30 and in repayment are delinquent. </p>
<h2>How did the debt get so big?</h2>
<p>College tuition fees in the US are not strictly regulated, and the system includes public, private, and for-profit universities. This results in a wide range of tuition and fee charges.</p>
<p>There’s a <a href="https://studentaid.ed.gov/types/loans/subsidized-unsubsidized">cap on federal loans</a> for undergraduates: $US31,000 for dependent students, and $US57,500 for independent students. These limits are larger for graduate students, and these balances can grow larger than the caps if payments are not made.</p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/61777/original/3gjjysrt-1413346606.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/61777/original/3gjjysrt-1413346606.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/61777/original/3gjjysrt-1413346606.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=398&fit=crop&dpr=1 600w, https://images.theconversation.com/files/61777/original/3gjjysrt-1413346606.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=398&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/61777/original/3gjjysrt-1413346606.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=398&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/61777/original/3gjjysrt-1413346606.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=501&fit=crop&dpr=1 754w, https://images.theconversation.com/files/61777/original/3gjjysrt-1413346606.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=501&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/61777/original/3gjjysrt-1413346606.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=501&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Protests at Washington Square Park.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/68294660@N06/7423446664">Flickr/Max Lib</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
</figcaption>
</figure>
<p>The federal loan system is designed to make sure qualified students have access to college, but also that they repay their loans to satisfy investors and protect the government. </p>
<p>This is a system that seems to benefit everyone, and while there have been warning calls for decades about the growth of student loan programs and perverse incentives for both students and institutions, student lending in the United States <a href="http://www.newyorkfed.org/studentloandebt/index.html">continues to grow</a>. </p>
<p>Student debt is one of the only types of consumer debt where credit ratings and ability to repay are not taken into account. This has led several countries to adopt income contingent repayment plans intended to reduce the repayment burden for graduates who have a tough time in the initial job market. </p>
<p>These programs are a lifeline for many former students but can be a risk to the governments that hold the debt. </p>
<h2>How are student loans managed elsewhere?</h2>
<p>Since 1989 Australia has had a government-funded student loan program. Repayments begin once graduates reach a certain level of income so they only start paying down their debt after they have entered the working world, this is known as an income-contingent loan.</p>
<p>This system does not involve commercial interest; <a href="http://studyassist.gov.au/sites/studyassist/payingbackmyloan/interest-and-indexation/pages/interest-and-indexation">instead loans are indexed to inflation</a>. There is no repayment for a current salary of less than about US$46,500, and a <a href="http://studyassist.gov.au/sites/studyassist/payingbackmyloan/loan-repayment/pages/loan-repayment">maximum of 8% of total income is collected for loan repayment</a>. There is currently about $AU23 billion of student loans owed to the government (about $US20 billion).</p>
<p>Australia is planning a move to bond-rate interest for current and future student loan balances beginning in 2016, more accurately reflecting the cost of borrowing. </p>
<p>According to <a href="http://grattan.edu.au/report/doubtful-debt-the-rising-cost-of-student-loans/">recent research</a>, about 20% of loan dollars lent today will not be recovered, and this amount <a href="http://www.theaustralian.com.au/higher-education/reforms-to-hecs-a-heist-on-taxpayers/story-e6frgcjx-1226924495545?nk=04c148b604771cad19a0a5775a82996a">may rise</a> depending on the result of proposed reforms or if higher interest rates make it more difficult to pay down principal. </p>
<figure class="align-left zoomable">
<a href="https://images.theconversation.com/files/61780/original/4jgwy79d-1413346681.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/61780/original/4jgwy79d-1413346681.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/61780/original/4jgwy79d-1413346681.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=398&fit=crop&dpr=1 600w, https://images.theconversation.com/files/61780/original/4jgwy79d-1413346681.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=398&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/61780/original/4jgwy79d-1413346681.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=398&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/61780/original/4jgwy79d-1413346681.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=501&fit=crop&dpr=1 754w, https://images.theconversation.com/files/61780/original/4jgwy79d-1413346681.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=501&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/61780/original/4jgwy79d-1413346681.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=501&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Hello. My debt is…</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/68294660@N06/7423471330">Flickr/Max Lib</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
</figcaption>
</figure>
<p>The income contingent loan system in England is younger but is growing more quickly, as England responds to budgetary issues in higher education by raising tuition. </p>
<p>England currently has about £54.4 billion (about $US86.5B) in outstanding obligations according to a study <a href="http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0CCAQFjAA&url=http%3A%2F%2Fwww.parliament.uk%2Fbriefing-papers%2Fsn01079.pdf&ei=qdo-VISlB7iCsQSEyYBQ&usg=AFQjCNHT2hCuNtKTy24UfJ29ZS0TXATLrg&sig2=6mAv9JyjUED4T3kWXXs8fA&bvm=bv.77648437,d.cWc">commissioned by the parliament</a>. Its loan program has only been in place since the early 1990s. </p>
<p>The first tuition charges did not occur until 1998. Tuition caps, which were originally £1000 per year in 1998 rose to £3000 in 2004 and £9000 in 2010, <a href="http://www.telegraph.co.uk/education/universityeducation/11051519/More-students-charged-maximum-9000-tuition-fees.html">a rate since adopted by most institutions</a>. </p>
<p>All graduates are enrolled in an income contingent program. The English system takes up to 9% of income above an income level of about US$33,000 for 30 years. A report from the Business, Innovation and Skills Committee of Parliament estimates that lending losses may be <a href="http://www.publications.parliament.uk/pa/cm201314/cmhansrd/cm140320/text/140320w0002.htm#140320w0002.htm_wqn21">as high as 45%</a>.</p>
<h2>Should we expand income contingent loans?</h2>
<p>Although some income contingent programs have been available since 1994 in the United States, the program that is known today as <a href="https://studentaid.ed.gov/repay-loans/understand/plans/income-driven">income-based repayment</a> was enacted in 2007 (followed shortly by Pay As You Earn and 2014 IBR for newer graduates). In comparison to Australia and England, the United States has a low income-based repayment adoption rate. Students must qualify for income-based repayment plans, and many do not even attempt the process. </p>
<p>For the most recently tracked cohort that began student loan repayment in 2011 – almost all of whom would be eligible for income-based repayment plans if they were to enroll – there is already a <a href="http://www2.ed.gov/offices/OSFAP/defaultmanagement/cdr.html">13.7% default rate</a> three years after finishing school. Currently, default is defined as missing payments for more than <a href="https://studentaid.ed.gov/repay-loans/default">270 days</a>. </p>
<p>Overall, the US student lending portfolio is much larger than those of peer nations, and current policy changes largely advocate for the increased adoption of income-based programs for current and former students. </p>
<p>In contrast to the Australian approach of raising interest rates to offset losses, the American program continues to become more forgiving to graduates entering repayment, as income based repayment programs have fallen from 20% of income in the 1990s to as low as 10% of income today. There are also proposals to reduce interest rates on existing loans. </p>
<p>According to the Congressional Budget Office, student loans will return a profit of about US$135 billion over the next ten years (using FCRA estimates). However, when the same program is analyzed using fair value accounting–which considers additional risk and market interest rates–it projects a loss of up to <a href="http://www.cbo.gov/publication/45383">US$88 billion</a> over the next ten years (and this is too soon to account for many balances that could be forgiven). Considering the extended repayment timelines of many loans, ten years may not be long enough to consider the total costs of these programs. Student loans are not the only type of debt projected to make money under FCRA and lose money under fair value accounting. Federal Housing Administration programs are still bigger than federal student loans, but the student loan portfolio has grown from <a href="http://www.cbo.gov/sites/default/files/03-05-FairValue_Brief.pdf">20% of the size of FHA programs in 1992 to 60% of the size of FHA programs in 2011</a>. Student loans are considered more profitable than housing programs under FCRA, and projected to lose more than housing programs under fair value. </p>
<p>In all three countries, income contingent repayment programs are popular for students and are likely to stay, despite the costs to government of incomplete repayment. </p>
<p>If these programs result in large costs to their respective governments, it may make sense to begin to return to pre-loan public education systems and have educational costs financed directly by governments, such as the current model in Germany. </p>
<p>While student loan costs can currently be borne by governments, these programs are likely to have growing costs as adoption increases and tuition growth outpaces inflation.</p><img src="https://counter.theconversation.com/content/32676/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The US student loan system is unique in age, size, and scope. Since 1958, the US has had some form of federally sponsored student loan system. Since inception, college and borrowing have become much more…Eric Best, Assistant Professor, Jacksonville State UniversityJoel Best, Professor of Sociology and Criminal Justice, University of DelawareLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/329252014-10-24T10:57:31Z2014-10-24T10:57:31ZWhy Ireland’s postgrad funding squeeze has forced me to become an academic exile<p>As a young humanities scholar at the beginning of my PhD, my experience with the Irish postgraduate research funding system has left me disillusioned. So much so that I have joined the list of emigrants from Irish academia. </p>
<p>Being faced with three to five years of tuition fees for my doctoral study on media studies, I went in search of funding in Ireland. The fees differ according to university and course, but hover close to the €6,000 mark (£4,800) for my subject area. With the fees increasing every year, four years of enrolment would cost me more than €23,000. </p>
<h2>Irish funding landscape</h2>
<p>Ireland’s <a href="http://postgradireland.com/advice-and-funding/funding/funding-postgraduate-study-ireland">postgraduate funding system</a> is made up of individual universities, commercial entities with vested interests, various state funding bodies – including government grants, and EU schemes. The application process in Irish universities is centralised in the <a href="https://www.pac.ie/">Postgraduate Applications Centre</a>.</p>
<p>Individual institutions do have postgraduate funding competitions at university, college, or departmental level – and these have to be applied for separately. But these competitions are very thin on the ground and often consist of a fees-only scholarship, rather than a full studentship including a maintenance stipend. Depending on the individual candidate’s circumstances, a fees-only scholarship might mean they will have to find employment and work long hours alongside their research. This is not an ideal situation for the creation of original knowledge.</p>
<p>The <a href="http://research.ie/">Irish Research Council</a> (IRC) has been the main national funding research body since 2012, after two separate bodies were consolidated. Before then they dealt with separate disciplines – science, technology, engineering, and mathematics (STEM) on one side, and social sciences and humanities on the other. Now, it all comes out of one pot but is divided up into two streams. </p>
<h2>Highly competitive</h2>
<p>In the 2013 Government of Ireland Scholarship scheme, €17.9m was allocated through 247 awards with the majority for PhDs alongside some masters degrees, according to the IRC. Of this funding, 45% was for research in the humanities and social sciences and 55% in STEM. But the amount fell in the 2014 round, with the <a href="http://research.ie/awards/government-ireland-postgraduate-scholarships-2014">IRC awarding 219 postgraduate awards</a> totalling €16.8m. This year the breakdown was 43% for the humanities, and 57% for STEM subjects. </p>
<p>The IRC <a href="http://www.research.ie/aboutus/about-irc">declares non-bias</a> towards disciplines: “The Council funds excellent researchers across all disciplines and encourages interdisciplinary research and engagement with enterprise.”</p>
<p>IRC’s annual doctoral funding competition, which currently includes a fees scholarship and €16,000 yearly stipend, is notoriously competitive. Throughout my application, I was told by both current PhD students and senior academic staff in Ireland that it is hardly worth applying for in my discipline. The process includes a stringent and ambiguous <a href="http://www.research.ie/sites/default/files/postgraduate_2014_indicative_postgraduate_application_form.docx">application form</a>, which makes the task more difficult. </p>
<p>I asked the IRC to comment on these issues. They responded, emphasising their commitment to supporting excellent researchers across all disciplines through several highly competitive funding schemes, which are assessed by an “international panel of experts”.</p>
<h2>EU funding no easier</h2>
<p>At EU level, the <a href="http://ec.europa.eu/programmes/horizon2020/">Horizon 2020 research strategy</a> is worth €80 billion to researchers across the member states between 2014 and 2020. A quick look at the <a href="http://ec.europa.eu/research/participants/portal/desktop/en/opportunities/index.html">current list of funding calls</a> shows familiar demands to demonstrate quantifiability and potential commercial profit-making potential, which are perpetuated by so many funding bodies. This is to the detriment of numerous disciplines in the humanities and social sciences, which deal with less concrete, less economically quantifiable issues. </p>
<p>After nine months and more than 20 applications across the EU, I have been lucky enough to secure funding in a UK university. I will be able to concentrate fully on my doctoral research without worrying about working alongside to fund it. Too many young Irish scholars face this compromising situation.</p>
<h2>Weakness in Irish system</h2>
<p>Ireland is in a dire situation in comparison to the UK and other EU universities. I applied to more than ten UK universities that offered fully funded studentships across various humanities departments that corresponded to my research interests. On the continent, <a href="http://www.research-in-germany.de/dachportal/en/Jobs-and-Careers-in-Germany/Info-for-PhD-Students/Financing-Funding-PhD/Costs.html">Germany offers free PhD study</a>. </p>
<p>Of course, Ireland has a much smaller population than these countries and cannot offer every funding for every specialisation. Despite this, Ireland needs to look at its system of university financing for the sake of future generations of scholars. The figures since austerity policies have been implemented are distressing, with a <a href="http://www.eua.be/publicfundingobservatory">20% drop in public funding </a> for higher education between 2008 and 2012 according to the European University Association.</p>
<p>Irish universities have begun to speak out about their lack of capacity to fund postgraduate and postdoctoral research. Some have become <a href="http://www.thejournal.ie/trinity-world-ranking-funding-1701731-Oct2014/">more vocal</a> about this as their world rankings drop.</p>
<h2>Humanities left aside</h2>
<p>I am in a minority of the population pursuing higher education to doctoral level. And you may ask why should humanities researchers like me be supported? I answer that the academy is a special sector, which should not be measured according to economic criteria. </p>
<p>Innovation as commercial entrepreneurship should not be the ultimate yardstick. The social good fostered by the pursuit of human knowledge is immeasurable. The humanities have a special place in this scheme – a message that is increasingly <a href="http://beinghumanfestival.org/less-stressed-humanities/">being communicated to the general public</a>. </p>
<p>Are young Irish scholars destined to work in a system that undermines them through <a href="https://chroniclevitae.com/news/762-the-adjunct-crisis-is-everyone-s-problem">precarious labour and casual contracts</a>, <a href="http://www.independent.ie/irish-news/education/college-funding-per-student-falls-24pc-to-9000-30673513.html">reduced funding</a> and <a href="http://eprints.whiterose.ac.uk/75806/3/wardv1.pdf">inappropriate performance criteria</a>? Are we destined to become, in a word, “<a href="http://www.hammeronpress.net/page19.htm">para-academics</a>”?</p>
<p>The <a href="http://notesonthefront.typepad.com/politicaleconomy/2014/03/normal-euro-zone-countries-dont-export-their-people.html">emigration</a> of Irish people, a special case in Western Europe, continues into academia. It doesn’t have to be this way. But the promotion of a vibrant research culture in Ireland is futile if scholars are being forced to emigrate or to change careers. To Ireland I have become another figure on the list of young emigrants.</p><img src="https://counter.theconversation.com/content/32925/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Niall Flynn receives funding from University of Lincoln.</span></em></p>As a young humanities scholar at the beginning of my PhD, my experience with the Irish postgraduate research funding system has left me disillusioned. So much so that I have joined the list of emigrants…Niall Flynn, PhD candidate, University of LincolnLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/309902014-08-28T10:49:52Z2014-08-28T10:49:52ZWhat can defuse the student loan time bomb?<figure><img src="https://images.theconversation.com/files/57563/original/3bypgh4s-1409156523.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Waiting to go off. </span> <span class="attribution"><a class="source" href="http://www.shutterstock.com/pic-182742503/stock-photo-closeup-portrait-of-busy-nervous-young-man-carrying-books-clock-and-piggy-stressed-from-paying.html?src=OtYsZHsWVTlcSxPhKoKBfw-1-97">Student debt via PathDoc/Shutterstock</a></span></figcaption></figure><p>According to a new pamphlet issued by the Social Market Foundation, “the Tories’ student loan system that finances our universities, voted through by the Lib Dems, is a timebomb waiting to go off”.</p>
<p>The author Liam Byrne, Labour’s shadow minister for universities, science and skills, rues a “free-market experiment gone wild”, but offers few insights into Labour’s preferred alternative. There is no shortage of ideas out there for him to choose from. </p>
<p>The reason the system isn’t working is because, on <a href="http://blogs.lse.ac.uk/politicsandpolicy/increasing-involvement-of-private-finance-in-the-higher-education-sector-will-have-important-consequences-for-academic-institutions-in-the-uk/">current estimates</a>, 45p for every £1 borrowed will never be paid back. </p>
<p>In a recent <a href="http://www.russellgroup.ac.uk/russell-group-latest-news/155-2014/8571-bis-select-committee-report-on-student-finance-system/">statement</a>, the Russell Group dropped several hints about what Britain’s leading universities think should happen next in terms of student funding. Responding to a Business Innovation and Skills Select Committee <a href="http://www.independent.co.uk/news/business/news/student-loans-system-is-collapsing-mps-warn-9620049.html">report</a> that also warned of an “increasingly fragile” system, the Russell Group pointed out that graduates currently pay back “only” 9% of their annual earnings above £21,000. This, they noted, was a “far” higher repayment threshold than under the previous system before the new fee regime was introduced in 2012. </p>
<p>The statement added that the government “can, of course, change these repayment conditions in order to increase the amount of money repaid, if they so choose.” With this line, the Russell Group acknowledged that the 2012 system requires change, but stopped short of calling directly for new thresholds for student loans to pay their loans back. The decision for that would remain the government’s, as would any subsequent blame. </p>
<h2>Who benefits from a lower threshold?</h2>
<p>Some, such as LSE’s Nicholas Barr, have explicitly <a href="http://www.theguardian.com/education/2013/may/06/student-loans-repayment-level-lowered">advocated</a> a lower opening repayment threshold. £21,000 is an arbitrary figure, for which no specific rationale was ever provided. If it were cut to, say, £15,000, a graduate earning £20,000 per year would still repay only £37.50 per month (compared to nothing now). A graduate on £25,000 would pay £75 (compared to £30 now). </p>
<p>However, such benign calculations do not address the broader question of whether lower-earning graduates should be hit harder than their higher-earning counterparts.</p>
<p>The graph below is a crude initial attempt to visualise how a reduced repayment threshold would affect graduates’ total lifetime repayments. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/57558/original/r6h3gw78-1409155143.PNG?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/57558/original/r6h3gw78-1409155143.PNG?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/57558/original/r6h3gw78-1409155143.PNG?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=341&fit=crop&dpr=1 600w, https://images.theconversation.com/files/57558/original/r6h3gw78-1409155143.PNG?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=341&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/57558/original/r6h3gw78-1409155143.PNG?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=341&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/57558/original/r6h3gw78-1409155143.PNG?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=428&fit=crop&dpr=1 754w, https://images.theconversation.com/files/57558/original/r6h3gw78-1409155143.PNG?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=428&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/57558/original/r6h3gw78-1409155143.PNG?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=428&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">What lowering the repayment threshold would mean.</span>
<span class="attribution"><span class="source">Steven Jones</span></span>
</figcaption>
</figure>
<p>The blue blocks represent how much four types of earners would currently pay back, in today’s money, in return for borrowing £9,000 in fees, plus £5,500 maintenance per year, using the defaults currently set on a popular <a href="http://www.moneysavingexpert.com/students/student-finance-calculator">student finance calculator</a>. </p>
<p>The red blocks represent approximate total repayments under a lower £15,0000 threshold for the same four groups of earners. The groups are those with starting salaries of £20,000, £30,000, £40,000 and £50,000 respectively.</p>
<p>As the graph shows, a reduced threshold would hit lower earning graduates harder than higher earning graduates (excluding those whose incomes never rise above £15,000 and who therefore receive full debt forgiveness). Higher earning graduates would be slightly better off.</p>
<h2>Punishing middle earners</h2>
<p>Note that in neither system do the very highest earning graduates repay most. As explained by the University of Bristol’s Ron Johnston, the 2012 system is <a href="http://blogs.lse.ac.uk/politicsandpolicy/student-debt-and-the-next-generation-of-british-public-sector-professionals/">regressive</a> because high earning graduates complete their repayments earlier and thereby accrue less interest on their debt. Cutting the threshold at which repayments begin would both benefit and enlarge this group. They’d be the winners.</p>
<p>The losers would be graduates who aren’t high earners. As noted in the Sutton Trust’s report, <a href="http://www.suttontrust.com/our-work/research/item/payback-time/">Payback Time</a>, under the 2012 system an “average teacher” will pay back around £42,000 of student debt, and still be making repayment in their early 50s. Under the system that was withdrawn in 2012, the same teacher would have paid around £25,000 and complete at the age of 40. The danger is that tinkering with repayment thresholds makes the current system even more punishing for such graduates.</p>
<p>On the surface, keeping a loan-based system has its advantages. The Russell Group is right to <a href="http://russellgroup.ac.uk/russell-group-latest-news/151-2012/5372-four-uk-universities-in-world-top-six/">point out</a> that UK universities punch well above their weight relative to the proportion of GDP that comes their way, and though the 2012 system failed as an austerity measure, it has safeguarded overall funding levels for most students.</p>
<p>What’s more, fears that the 2012 fees hike would deter young people from lower socioeconomic backgrounds from enrolling on full-time degree programmes appear not to have materialised. This summer’s figures have shown <a href="http://www.dailymail.co.uk/wires/pa/article-2724970/More-poor-students-win-uni-places.html">an 8% increase</a> among the poorest groups (though the number of <a href="http://www.suttontrust.com/news/news/18000-fewer-mature-students-apply-to-university-since-fees/">mature</a> and <a href="http://www.thecompleteuniversityguide.co.uk/news/dramatic-fall-in-the-number-of-part-time-students-owed-to-a-suffering-uk-economy-and-resulting-changes-in-public-policy/">part-time students</a> has fallen alarmingly).</p>
<h2>Give graduate tax a go</h2>
<p>An alternative approach that receives less attention is that of a <a href="http://hewatch.wordpress.com/2014/03/28/are-counter-arguments-to-a-graduate-tax-wearing-thinner-with-every-new-rab-estimate/">graduate tax</a>. Understandably, some commentators have expressed <a href="http://www.timeshighereducation.co.uk/a-terrible-policy-at-a-terrible-time/2012324.article">concern</a> that “hypothecated” taxes (ones earmarked for a specific purpose such as a graduate tax) might be diverted elsewhere by capricious future governments. But the principle that England’s highest earning graduates should contribute the most (or, at least, as much as their middle earning counterparts) is one that would surely enjoy popular support.</p>
<p>Liam Byrne is right. Today’s students are, as he says: “highly anxious about taking on an average of £44,000 worth of debt in an uncertain job market where nearly half of employed recent graduates are in non-graduate jobs.” </p>
<p>Of course, a graduate tax would make it trickier for universities to compete on price and therefore sits uneasily within fashionable, “<a href="https://www.gov.uk/government/news/putting-students-at-the-heart-of-higher-education">student-as-consumer</a>” thinking. But the alternative is that the cost of higher education, having already been transferred from taxpayer to graduate, could be further shifted from those who benefit most to those who benefit less.</p><img src="https://counter.theconversation.com/content/30990/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Steven Jones has received research funding from the Sutton Trust.</span></em></p>According to a new pamphlet issued by the Social Market Foundation, “the Tories’ student loan system that finances our universities, voted through by the Lib Dems, is a timebomb waiting to go off”. The…Steven Jones, Senior Lecturer, Manchester Institute of Education, University of ManchesterLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/301252014-08-05T13:09:48Z2014-08-05T13:09:48ZTaking on student debt would be a corruption of university ideals<p>The funding of higher education is a mess, and it is getting messier. <a href="http://www.bbc.co.uk/news/education-28528824">New proposals on the table</a> to allow universities to take on the debt burden of their own students could have profoundly worrying consequences for who gets to go to university. </p>
<p>A lot has changed for universities in the past 40 years. Once upon a time, universities enjoyed what was quaintly called “quinquennial” funding – in other words, they knew five years ahead what state funding they would receive via the arms-length <a href="http://discovery.nationalarchives.gov.uk/SearchUI/details/redirect/?CATID=872&CATLN=2&CATID=872&CATLN=2&accessmethod=5&j=1">University Grants Committee</a> (UGC). That guarantee crumbled during the inflation of the 1970s.</p>
<p>But, if the actual money could no longer be guaranteed, at least the funding system was fairly stable. After a wobble when former polytechnics were incorporated into the university system in the early 1990s, the method of funding higher education settled down. Overall, student numbers were controlled; successful universities could bid for extra places; and excellence in research was rewarded. Most of the money was still channelled through the <a href="http://www.hefce.ac.uk/">Higher Education Funding Council for England</a>, the UGC’s successor, although (modest) fees were reintroduced.</p>
<p>Until 2010. That saw the introduction of the current pseudo-market system following the <a href="https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/31999/10-1208-securing-sustainable-higher-education-browne-report.pdf">Browne report</a> on higher education. Student fees shot up to a maximum of £9,000 and direct funding to institutions was cut (completely for the humanities and the social sciences). The new system was hailed as a “paradigm shift”.</p>
<h2>A broken system</h2>
<p>Only four years later it is clear this system <a href="https://theconversation.com/as-public-funding-bleeds-away-universities-consider-their-future-24932">isn’t working</a>. First, it has sowed the seed of massive <a href="https://theconversation.com/widening-access-to-university-entrenches-social-class-attitudes-to-student-debt-24755">indebtedness</a> among graduates. We should remember the Americans first introduced systematic loans in 1962; today student debt in the United States stands at <a href="http://www.nybooks.com/articles/archives/2014/aug/14/hi-tech-mess-higher-education/?pagination=false&printpage=true">more than $1 trillion</a>, and exceeds credit card debt. That is where we are heading.</p>
<p>Second, the new funding system has produced serious turbulence, as universities that don’t really want more students have expanded and those that do have been forced to contract (threatening their long-term viability in some cases). The pattern of institutions that has been relatively stable since the 1960s (give-or-take some changed labels) is threatened. </p>
<p>Private, for-profit institutions of marginal worth have also been allowed into the higher education “market”, raising the <a href="https://theconversation.com/more-regulation-still-needed-to-prevent-cashpoint-colleges-27293">spectre of rip-offs of public funding</a> (already duly noted by the <a href="http://www.theguardian.com/education/2014/may/22/watchdog-investigate-private-colleges-potential-misuse-millions">House of Commons Public Accounts Committee</a> but ignored by ministers). The government has actually made things worse by weakening the instruments, notably HEFCE, that might have brought some order to the approaching chaos. With less funding, it has less influence over the behaviour of institutions. At the same time, the government has also failed to establish a fit-for-purpose regulatory regime. </p>
<p>But, third, the new system is heading for bankruptcy because almost <a href="https://theconversation.com/is-the-new-student-loan-system-more-progressive-than-its-predecessor-25468">half of the loans students receive</a> to pay their fees will never be recovered, leaving the tax-payers with arguably an even bigger bill than before.</p>
<h2>Unpalatable to sell loan book</h2>
<p>Massive student debt and sustained institutional turbulence, leading to the inevitable closure of some universities, can be ignored – for now. So it is this third flaw of the student finance system – the cost of student loans to the state – that is now concentrating political minds. </p>
<p>The Coalition government first toyed with the <a href="https://theconversation.com/why-the-government-shouldnt-privatise-the-student-loan-book-22784">idea of “selling” the student loans</a> book to the banks (or indeed any financial institutions – Wonga perhaps?). That hasn’t worked for two reasons. The first is it is widely recognised that the loan book could only be “sold” on such financially disadvantageous and risk-free terms that the arrangements would be difficult to defend (or, in reality, save a penny of public money). </p>
<p>But the second, and decisive, reason is that, after the scandal of the <a href="https://theconversation.com/royal-mail-row-shows-we-still-dont-understand-markets-26027">give-away Royal Mail privatisation</a>, the appetite for a repeat simply does not exist. It seems that the <a href="http://www.independent.co.uk/student/news/privatisation-of-student-loan-book-to-be-scrapped-9617742.html">business secretary Vince Cable has now backed away</a> from the idea in this parliament.</p>
<h2>Academia to take on the debt?</h2>
<p>Then in late July, the former <a href="http://www.bbc.co.uk/news/education-28528824">universities minister David Willetts</a> floated the extraordinary idea that universities themselves could take on the debts incurred by their own students. Precisely how they would fund such high levels of additional debt has not been explained. Oxford might be able to raise the finance, although this would crowd out far more urgent (and academic) investment. But the urban universities that have done all the heavy lifting in terms of expanding opportunities for disadvantaged students would face punitive charges.</p>
<p>Under such a scheme, perverse incentives would proliferate. Students with less lucrative career prospects (like those in the humanities), or who were perceived to be more likely to drop out (like women or working-class students), or who were less likely to receive “good” degrees (like students from – most – ethnic minorities) would become less attractive. Their opposite numbers – posh, privately educated, white, male students (aiming at careers in business and the “traditional” professions) – would become more attractive to universities.</p>
<p>There are two fundamental, and principled, objections to such a scheme. First, far from widening participation in universities, it would narrow it – thus reversing a century or more of social and educational progress. Universities would not be meeting the legitimate aspirations of all citizens in a liberal democracy, nor building the human capital all 21st-century advanced economies need. Instead, such proposals would amount to reverse “affirmative action” – with a vengeance.</p>
<p>Second, it would require universities to admit students no longer solely based on their academic merits and potential but according to their ability to pay back their loans. </p>
<p>It would be like if doctors no longer treated their patients solely according to their clinical needs but according to their ability to pay (but maybe that is just down the line if the current government is re-elected?). It is difficult to imagine a greater corruption of academic ideals.</p><img src="https://counter.theconversation.com/content/30125/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Peter Scott is Chair of Council at the University of Gloucestershire and trustee of the Higher Education Policy Institute.</span></em></p>The funding of higher education is a mess, and it is getting messier. New proposals on the table to allow universities to take on the debt burden of their own students could have profoundly worrying consequences…Peter Scott, Professor of Higher Education Studies, UCLLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/296162014-07-25T10:40:01Z2014-07-25T10:40:01ZWhy we must challenge notion that there are too many students<p>The debate around how to finance undergraduate education at English universities has been reignited <a href="http://www.publications.parliament.uk/pa/cm201415/cmselect/cmbis/558/55806.htm#a15">by a new report</a> from the business, innovation and skills select committee questioning the sustainability of the current student finance system. Business secretary Vince Cable <a href="http://www.publications.parliament.uk/pa/cm201415/cmselect/cmbis/558/55806.htm#a15">has also announced</a> that he plans to put on hold the sell-off of the student loan book in this parliament. </p>
<p>This has led some in the higher education sector, including the Russell Group of universities, to <a href="http://www.russellgroup.ac.uk/russell-group-latest-news/155-2014/8571-bis-select-committee-report-on-student-finance-system/">call on the government to abandon its plan</a> to remove the cap on the number of students universities will be able to recruit in 2015-16, citing concerns about affordability and value for money. </p>
<p>Last autumn, the chancellor <a href="http://www.timeshighereducation.co.uk/news/undergraduate-numbers-cap-to-be-abolished-osborne/2009667.article">George Osborne announced</a> the government’s plan to lift controls on how many students could study at English universities. </p>
<p>According to the Institute of Fiscal Studies, selling off the loan book to pay for more students is <a href="http://www.timeshighereducation.co.uk/news/numbers-expansion-plan-is-economic-nonsense/2009677.article">“economic nonsense”</a>. It always seemed like an accountancy trick in order to expand the sector without affecting the government’s borrowing figures. The <a href="http://www.theguardian.com/education/2014/jul/22/student-loan-u-turn-cost-twelve-billion">Office of Budget Responsibility indicated</a> the decision to abandon the student loan book sale could be worth £12bn. </p>
<p>I sincerely hope Mathew Hilton, director of higher education at the department for business innovation and skills, is proved correct after having told the committee in January that the Treasury intends “<a href="http://andrewmcgettigan.org/2014/04/10/1234/">to underwrite the policy</a>”.</p>
<h2>Don’t ruin a hugely progressive policy</h2>
<p>A U-turn on uncapping student numbers as a result of not selling the loan book would be a huge mistake. This is the coalition’s most <a href="https://theconversation.com/abolishing-cap-on-student-numbers-is-a-good-use-of-government-money-24430">progressive higher education policy</a>. </p>
<p>Allowing universities to recruit as many students as they wish will expand opportunity and foster greater competition between institutions. It will mean more students will be able to go to their first choice university and help resolve the existing problem of tens of thousands of students who have got the grades to get a place, having to apply the following year because of a failure of the system to match supply with demand. </p>
<p>What this policy won’t do, <a href="http://www.independent.co.uk/student/news/top-universities-warn-quality-is-at-risk-with-more-students-8986464.html">as some fear</a>, is drive standards down. Universities are measured on the students they recruit, so it is not in the interests of vice-chancellors to admit more students to the cost of their reputations.</p>
<h2>Not too many students</h2>
<p>Yet there is still a prevailing view, which you often read in the papers, that “there are too many students”. This idea needs to be challenged because it is the opposite of what we should be encouraging. In the “<a href="http://www.theguardian.com/politics/2013/sep/22/what-is-global-race-conservatives-ed-miliband">global race</a>” as the government describes it, competition between developed economies will grow, but the UK’s tertiary participation rate is below the likes of South Korea, Australia, and the United States. </p>
<p>A lower quality supply of labour will mean business going overseas, or relying more heavily on migration. <a href="https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/254101/bis-13-1268-benefits-of-higher-education-participation-the-quadrants.pdf">Robust evidence</a> shows that graduates are more productive and more innovative – in other words by increasing the supply of graduates the economy expands faster. </p>
<p>Having more graduates will benefit Britain, but only 55% of the student loans they take out under the new system will be paid back, according to the <a href="https://theconversation.com/is-the-new-student-loan-system-more-progressive-than-its-predecessor-25468">latest projections</a>. As the select committee said this week, we are approaching a “tipping point for the financial viability of the student loan system”. So how can any government after the election reconcile growing the student population with a system that is affordable for the Treasury?</p>
<h2>Other options on the table</h2>
<p>The representative organisation that my institution is a member of, University Alliance, has just published a <a href="http://www.unialliance.ac.uk/helpuk/">report</a> detailing the way in which the government could protect funding for universities, grow student numbers, provide a long-term sustainable system and reduce tuition fees. </p>
<p>The catch is that graduates would be required to pay back more per month than under the current arrangements. But they will pay off their loans much quicker and their total loan will be less. Initial evidence suggests <a href="https://theconversation.com/student-loans-should-be-for-life-say-universities-28525">this approach</a> is supported by students, who favour paying back their loan faster. </p>
<p>Of course the next government may not wish to be so bold and could instead tinker with the repayment model to ensure a much bigger proportion of loans are paid back. But our proposal has the added advantage of tackling some of the more fundamental problems in UK higher education, such as the decline in part-time students, how postgraduates are funded and how we are going to pay for the re-skilling of the workforce so they can adapt to an ever-changing economy. </p>
<p>However the next government decides to alter higher education funding or not, I hope we can move away from discussing loan subsidies to ways in which our higher education system can meet the challenges of the future. How and what people study should be at the forefront of policy making, not debates about how many students and what’s affordable. We need a system that fits around the lives of learners, and meets the needs of a flexible economy. That’s the great challenge for our sector – and one politicians of all parties should be debating. </p>
<hr>
<p>Next, read this: <a href="https://theconversation.com/search?q=student+loan+progressive">Is the new student loan system more progressive than its predecessor?</a> </p><img src="https://counter.theconversation.com/content/29616/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Quintin McKellar is a board member of the University Alliance. </span></em></p>The debate around how to finance undergraduate education at English universities has been reignited by a new report from the business, innovation and skills select committee questioning the sustainability…Quintin McKellar, Vice Chancellor, University of HertfordshireLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/288672014-07-17T05:09:59Z2014-07-17T05:09:59ZThe real Repo Man comes to Studentville – with fake debt collection letters<figure><img src="https://images.theconversation.com/files/54015/original/n9p7239s-1405519397.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">A wall of indebted students at the University of Portsmouth.</span> <span class="attribution"><a class="source" href="https://www.flickr.com/photos/upsuportsmouth/2291486634/sizes/l">upsuportsmouth</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc/4.0/">CC BY-NC</a></span></figcaption></figure><p>“Life imitates art far more than art imitates life,” according to Oscar Wilde. No more so than in the contemporary issue of debt. It seems that while we may have been born free, many of us will die financially indebted. The precarious austerity economy is kept afloat by endemic domestic debt – from students taking out ever larger government-backed loans, to the cash-strapped taking advantage of a <a href="https://theconversation.com/let-them-eat-credit-payday-lending-is-a-sign-of-the-times-19863">proliferation of short-term loan companies</a>. </p>
<p>Names such as Wageme or Wonga represent the quick and dirty, pay-day end of the loan market. With some <a href="http://www.thebureauinvestigates.com/2013/09/05/payday-loans-companies-charging-up-to-7000-experience-huge-growth/">companies charging 7,000% interest on loans</a>, according to the Bureau of Investigative Journalism, the Wildean parallel in fiction should be the Spielberg movie Jaws. Yet the real fictional reference point for our modern-day debt collectors appears to be the 1984 cult film, Repo Man. </p>
<p>And it’s clearly not just the pay-day lenders who have been borrowing techniques from the film – but the Student Loans Company too.</p>
<h2>Bogus letters</h2>
<p>Repo Man’s narrative centres on a Los Angeles company that repossesses cars, among other things, from the debt-laden borrowers who have fallen behind on their loan payments. Essential to the “Repo Man’s” persuasive armoury is deception and the perceived threat of some force or sanction – a lesson not lost in the ever burgeoning loan business.</p>
<p>The short-term loan market is something of a precarious business model to say the least, especially when it comes to repayments. This, after all, is the new subprime hinterland. In Wongaland, the Repo Man’s threats meet their equivalent in the letter from a respectable law firm. </p>
<p>This strategy started back in 2005, when the likes of Wonga started pursuing those borrowers in arrears through legal firms such as Chainey, D’Amato and Shannon, specialising in debt recovery. But after a few years, <a href="http://www.theguardian.com/money/2014/jun/25/wonga-compensation-bill-unfair-misleading-practices">the regulators and public discovered</a> that Chainey, D’Amato and Shannon did not exist. </p>
<p>The impression left was that payday loan customers are fair game for the modern Repo Man because of their social and economic vulnerability. And <a href="http://qje.oxfordjournals.org/content/126/1/517">research by Brian Melzer</a> at the Kellogg School of Management in the US, shows that despite claims about the careful screening of loan applicants: “low-to moderate-income households… represent the vast majority of payday borrowers”. </p>
<p>Another credit-dependent, low-income group is also being targeted with legal correspondence by an unscrupulous loan company: university students. In June, it emerged that the SLC had lifted a leaf out of Wonga’s books. </p>
<p>Some <a href="http://www.parliament.uk/documents/commons-vote-office/July%202014/8%20July/1-BIS-StudentLoans.pdf">300,000 graduates received letters</a> from a company called Smith Lawson and Company Recovery Services – with the initials SLC – between 2005 and 2014. The letters contained a banner in red stating “Do Not Ignore This Letter”, demanding that if payments were not met within seven days legal action would ensue. Of course, Smith Lawson and Company Recovery Services is a <em>fugazi</em> firm, a fake. </p>
<p>There <a href="http://www.theguardian.com/money/2014/jul/03/student-loans-company-debt-collection-letters-compensation-wonga">were calls in parliament</a> for the student victims of these Repo letters to be compensated. Such action would not be out of step with how regulatory authorities have responded to similar practices, mentioned above, by payday loan companies. For example, in late June, <a href="http://uk.reuters.com/article/2014/06/25/us-wonga-fine-idUKKBN0F00T420140625">Wonga got a £2.6m</a> slap on the wrists and the Financial Conduct Authority ordered the company to compensate 45,000 customers who had been intimidated by the company’s Repo Man letter antics between 2008-10.</p>
<p>The difference between Wonga and the Student Loan Company is that the latter exists chiefly to provide a public service and, more importantly, it is owned by the government. So why did the Student Loan Company stoop to the pay-day loan level of Wonga?</p>
<h2>Was it a nudge?</h2>
<p>One possibility could be the government using the soft tools of incentives derived from the science of behavioural psychology, or so-called Nudge Theory. But policy champions of nudge regard deception as very un-nudge-like. </p>
<p>The British political scientist Peter John, author of the book <a href="http://www.bloomsburycollections.com/book/nudge-nudge-think-think-experimenting-with-ways-to-change-civic-behaviour/">Nudge, Nudge, Think, Think</a>, argues that behavioural nudges should be debated and deliberated with the public. Transparency, it seems, is fundamental to nudge, certainly if it is to have public legitimacy. </p>
<p>In fact, key policy evangelists of nudge, <a href="http://yalepress.yale.edu/book.asp?isbn=9780300122237">Richard Thaler and Cass Sunstein</a>, have looked into how behavioural psychology can curb the irrational inclination towards the accumulation of debt – a behaviour encouraged and promoted by the credit industry. These authors would no doubt approve of the <a href="http://www.pymnts.com/company-profile/2011/nudging-from-debt-the-role-of-behavioral-economics-in-regulation/#.U8ZvWbHb7Iq">soft-touch regulatory interventions</a> made by such US states as Florida and New Mexico in relation to credit. These states have placed limits on repetitive rollover borrowing from payday lenders in a bid to discourage the accumulation of debt.</p>
<p>The explanation of why the SLC adopted pay-day tactics is less about psychological models than hard commerce. It is currently <a href="https://theconversation.com/is-the-new-student-loan-system-more-progressive-than-its-predecessor-25468">facing a business model</a> where there is endemic non-payment on loans by former students. At the end of 2013, <a href="http://www.nao.org.uk/wp-content/uploads/2013/11/10307-001-Student-loan-repayments_BOOK.pdf">the National Audit Office revealed that 368,000 former students</a> who took out student loans owed a total of £5.3bn, as the graph below shows. But this was not a case of co-ordinated mass defaulting: the department for business, innovation and skills had no employment records for all these former students and hence they could not be pursued. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/54012/original/3kx6ypvv-1405518439.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/54012/original/3kx6ypvv-1405518439.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/54012/original/3kx6ypvv-1405518439.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=212&fit=crop&dpr=1 600w, https://images.theconversation.com/files/54012/original/3kx6ypvv-1405518439.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=212&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/54012/original/3kx6ypvv-1405518439.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=212&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/54012/original/3kx6ypvv-1405518439.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=266&fit=crop&dpr=1 754w, https://images.theconversation.com/files/54012/original/3kx6ypvv-1405518439.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=266&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/54012/original/3kx6ypvv-1405518439.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=266&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<p>In February 2014, Chris Brodie, previously a senior executive at the investment bank UBS, was appointed as the <a href="https://www.gov.uk/government/news/david-willetts-appoints-new-student-loans-company-chair">non-executive chair of SLC</a>. On a modest £50,000 salary Brodie, who also chairs the council of Sussex university, was appointed to modernise the SLC’s computer systems – systems that are clearly deficient. </p>
<p>In the fall-out over the fake debt collection letters at the SLC, <a href="http://www.bbc.co.uk/news/education-28211534">Brodie offered his resignation</a>; it was declined. The SLC has subsequently <a href="http://www.parliament.uk/documents/commons-vote-office/July%202014/8%20July/1-BIS-StudentLoans.pdf">ended its practice</a> of issuing bogus legal threats to ex-students. </p>
<p>Despite the moral and economic hazards surrounding the loans industry, the provision of credit is close to being an inalienable human right. To quote Bud, one of the characters from Repo Man Bud: “Credit is a sacred trust, it’s what our free society is founded on”. Bud of course would say that – without loans he would have no job to recoup loans. It seems credit debt is an evil which has been made a necessity by the modern economy.</p><img src="https://counter.theconversation.com/content/28867/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Mike Marinetto does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>“Life imitates art far more than art imitates life,” according to Oscar Wilde. No more so than in the contemporary issue of debt. It seems that while we may have been born free, many of us will die financially…Mike Marinetto, Lecturer in Business Ethics, Cardiff UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/251862014-04-03T05:43:42Z2014-04-03T05:43:42ZUniversities need more than a pledge to reduce student fees<p>I’m an unabashed political junkie. Who’s up, who’s down; who’s in, who’s out. Yet it’s fair to say that pretty much all the day-to-day policy spinning, posturing and firefighting rarely percolates outside Westminster Village. Instead, the history books always judge governments for a handful of big decisions – and undoubtedly, the move toward full higher education marketisation will be one of the long-lasting legacies of this one. </p>
<p>So it was no surprise to <a href="http://www.theguardian.com/education/2014/mar/30/labour-cut-student-tuition-fees-6000-a-year">see Labour try to put some meat</a> on the bones of its tuition fees policy. It’s been two and half years since <a href="http://www.theguardian.com/education/2011/sep/24/labour-tuition-fees-cut-miliband">Ed Miliband promised to cut them</a> from £9,000 to £6,000 a year. There has been precious little detail since. And to counter the <a href="http://www.politicshome.com/uk/article/95591/conservatives_sajid_javid_letter_to_ed_miliband_on_labours_tuition_fee_spending_pledge.html">Tory charge of a £1.7 billion funding blackhole</a>, Miliband must show that an opportunistic party conference announcement is now actually workable. </p>
<p>But is this simply the “cost-of-living” line that Labour is using – in many ways successfully – to pitch to the electorate? Higher education is a much more fundamental economic issue, that far outweighs short-term positioning post-Budget. We’re at a crossroads. To compete globally, the UK must have a high-skilled workforce, whether or not people take a degree. Making university finance affordable, fair and sustainable is a part of bigger debate about the society we want and need. It is too important to be plucking new fee levels out of thin air.</p>
<h2>A new Browne review</h2>
<p>The former BP chief <a href="https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/31999/10-1208-securing-sustainable-higher-education-browne-report.pdf">Lord Browne’s independent review</a>, set up by Labour in government, aimed to create a long-term settlement on higher education’s structure. </p>
<p>Much has been adopted, including agreement that students need to pay more. But if university funding is to be a political football again, it is clear we need another crack at consensus-building. For me, post-election, we need a second independent review.</p>
<p>Why? First, to buy some political space. Voters could be forgiven for taking any pledge on tuition fees with a pinch of salt. Let’s not pretend the £9,000 cap is sacrosanct. Browne’s original recommendation for unlimited fees was too toxic. </p>
<p>The cap was a necessary political fudge, not a permanent solution. We’ve already seen <a href="http://www.bbc.co.uk/news/education-24856812">prominent vice-chancellors</a>, perhaps rather naïve, call for the cap to be raised. An independent review is the only way to move the debate on. Hiking up fees is not simply a matter of administrative fiat.</p>
<p>Second, we need a cool assessment of the current system. It’s early days. We are less than two years into the new regime and the first students will not start repaying until next summer. </p>
<p>But while <a href="https://theconversation.com/can-we-stop-worrying-about-university-application-rates-22412">applicant numbers</a> have held up nationally, there is real turbulence at institution level, meaning revenues are being hit. Inflation is already nibbling away at the real-terms value of £9,000 fees, compounded by <a href="http://www.hefce.ac.uk/news/newsarchive/2014/news86801.html">severe cuts in public teaching grants</a>. </p>
<p>Overseas <a href="http://www.hefce.ac.uk/news/newsarchive/2014/news86922.html">student numbers have reduced</a> for the first time in 30 years. And mature undergraduate numbers have dropped off a cliff. With most course fees drifting up to the £9,000 ceiling, it’s clear the market is not acting “rationally” by cutting prices to compete.</p>
<p>Labour says it is looking carefully at <a href="http://www.independent.co.uk/student/news/a-labour-government-would-cut-tuition-fees-by-at-least-3000-a-year-9223902.html">proposals by the former universities secretary</a> John Denham. A serious politician, he has been floating ideas to enable fees to be cut – two-year degrees; vouchers with fee top-ups; more industry sponsorship; and changing repayment terms. But in a system still geared to delivering three-year degrees, there is no magic Whitehall lever. It’s easier said than done to make such ideas scalable across 150-plus institutions and thousands of courses. </p>
<p>Third, we need to analyse the system’s long-term affordability. Ministers now say the <a href="http://www.bbc.co.uk/news/education-26688018">estimated loan write-off is 45%</a>, up from the initial forecast of 28%. Even the universities minister’s <a href="http://www.theguardian.com/education/2014/mar/21/tuition-fees-former-tory-adviser-government-maths-wrong">former special adviser says they got their sums wrong</a>, so it ill-behoves the current administration to speak loftily about Labour’s apparent policy void. Earnings projections are never an exact science but there is no point in setting up a system which risks hitting the public finances with big loan defaults in 30 years’ time. </p>
<p>On top of this, is the cost of scrapping student number caps. The Institute for Fiscal Studies argues it is <a href="http://www.timeshighereducation.co.uk/news/numbers-expansion-plan-is-economic-nonsense/2009677.article">“economic nonsense”</a> to fund this by selling off the student loan book – arguing that permanent giveaways cannot be funded by a one-off revenue raiser. Yet the Denham proposals seem to require an equally problematic approach: funding a permanent fees cut by recouping unknown savings from fewer defaults in the 2040s.</p>
<h2>Winners and losers</h2>
<p>The logical extension of marketisation is that there will be winners and losers. Outside the super-elite institutions, it’s clear the home undergraduate market alone will not sustain every single existing institution. Universities will need to diversify their income and investments, while expanding aggressively in the postgraduate and international markets. </p>
<p>The losers will be those who fail to adapt. Is any government content to see institutions wither and fail? How does that square with the rhetoric of putting students at the heart of the system? There is a wider public interest in universities beyond the market – not least when this market is heavily dependent on the choices made by 16 and 17-year-olds.</p>
<p>To end where I began. When it comes to the funding of higher education, remember the old Whitehall adage. Political fixes usually end up with politicians in a fix.</p><img src="https://counter.theconversation.com/content/25186/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Sir David Bell is Vice-Chancellor of University of Reading. He is on the board of Universities UK.</span></em></p>I’m an unabashed political junkie. Who’s up, who’s down; who’s in, who’s out. Yet it’s fair to say that pretty much all the day-to-day policy spinning, posturing and firefighting rarely percolates outside…David Bell, Vice-Chancellor, University of ReadingLicensed as Creative Commons – attribution, no derivatives.