Income-contingent loans key to expanding access to HE?

Income-contingent loans, such as those already used to fund university students in Australia and the United Kingdom, could be the answer to increasing access to higher education for poorer students in Africa and the rest of the developing world, an online conference bringing together five Nobel Prize laureates and other leading scientists and thought-leaders heard.

The first digital meeting of the Nobel Prize Dialogue in Africa was organised by Nobel Prize Outreach with the University of Pretoria, South Africa, on 18 May to discuss the future of work after the traumas of the COVID-19 pandemic and the rush to embrace digital technology. The University World News Africa edition was the media partner.

Professor Eeva Leinonen, vice-chancellor of Murdoch University, Australia, told the conference session on the future of learning, that the success of the student loan system in Australia and the UK had been “incredible”.

“It has given funding for your higher education, so your access is not impeded by your ability to pay and you are actually given funding to be educated in the university context,” she explained.

Loans helped ‘equalise’ higher education

Later during a breakout session on ‘Does higher education need to change?’, Leinonen, who was vice president (education) at King’s College London before moving to Australia, claimed the government-backed student loans had helped to “equalise” higher education.

“We had a fear in the UK when the fees went up quite dramatically by three-fold that it would impact on lower-income families and those who are debt averse, but it didn’t,” she said.

Leinonen said that while many people were talking about online education being the way forward, students still needed to pay for their degrees.

Brian Schmidt, vice-chancellor of the Australian National University and recipient of the 2011 Nobel Prize in Physics, agreed that income-contingent loans could be part of the answer to expanding opportunities to access higher education in developing countries, together with greater access to the internet by providing basic laptops and help with paying for the data required for online learning.

He described such loans as more like insurance than traditional loans, adding: “You never have to pay it off unless you make money. These loans don’t come back and stop your life and bankrupt you.”

Schmidt said providing income-contingent loans across the developing world could be something the developed world does to lower the cost of higher education and give the right incentives to “jump-start” increased access, saying: “That’s a very good way to do it.”

Schmidt said all students in the future would need to be connected to the internet and should be provided with smart mobile phones and laptops if they can’t afford them, in the same way they were provided with books in the past.

Holding a smart phone to camera, he said: “We have to accept this has every book ever written and is a much cheaper way of exchanging information.”

Leinonen agreed and said Murdoch University had kept its libraries and IT facilities open during the COVID-19 lockdown to make sure all students could access the internet when teaching and learning moved online. Many of the university’s students were funding their studies with part-time jobs which they lost during the pandemic and Murdoch’s hardship fund included data packages, she said.

Digital threat to equality and inclusivity

Schmidt said universities had to create a system that is better for all as they navigate out the current chaos, and said: “The digital world is both an opportunity and a threat to equality and inclusivity.”

Turning to the main theme of the online event – the future of work – he foresaw a threshold in the new digital world, in which “a person is either equipped to make use of the technology and amplify their talents or where the technology completely displaces their ability to be meaningfully productive”.

Much of where they stand on that threshold depends on the society they live in and their economic and social status. “Above the threshold you thrive, below you don’t,” he said.

“The future of work is for those above that threshold and the great equaliser to get people above that level is education,” suggested Schmidt.

But this doesn’t mean that tertiary education should simply be about training people for certain jobs and work functions, even if everyone is going to need to get an education and training as an ongoing part of their lives.

“If you learn just what you need to do for a certain job, you may never get the mathematical, writing, communication and critical thinking skills you need to do a job that is much more complex,” said Schmidt.

And while higher education should be expanded to include those who have not been part of the higher education system in the past, it shouldn’t mean putting all learning online and the end of physical campuses, which Schmidt predicted will still help younger students to grow their skills alongside other students.

Massification of higher education presented opportunities with risks for the university ecosystem, which Schmidt said was under threat from “a political world focused on the very short-term and favouring training over education and kind of putting research-led education to the side”.

The danger, he warned, was that the world may lose some of its research-intensive universities and that the convergence of most state-run universities to high-volume degree teaching institutions would “once again mean that the small set of remaining research universities become the bastion of the elite”.

End the focus on ‘job-ready’ students

The conference also looked at the social and environmental impact of work and Muhammad Yunus, the founder of Grameen Bank, created plenty of interest by challenging current ideals that education should be focused on creating “job-ready” young people to be employed by others.

Yunus, who was awarded the Nobel Peace Prize for 2006, is based in Bangladesh and is often known as “banker to the poorest of the poor”, after creating a system of microfinance for poor people that provides small loans without requiring collateral.

He said universities should be creating entrepreneurs rather than defining work as something someone is employed to do for other people who usually have more money.

“Slavery was work,” he said, adding that often people do work simply to survive.

“When we were born we were hunters and gatherers, not job seekers, and being independent is deep in our DNA.

“Jobs came later when we settled down and someone had more land than others,” he said.

Help people become entrepreneurs

“The nature of human being is as an entrepreneur,” Yunus told the conference, saying it was wrong that school systems and universities focused on teaching young people with the intention of making them “job-ready” and giving them a diploma or other piece of paper to prove that was case.

“Why should we make slaves out of our young people? Why don’t you say that we are creating life-ready young people? Life is very different from a job.”

He urged universities to help young people to decide whether they want to be entrepreneurs instead and provide them with support.

“Finance is the oxygen for entrepreneurship,” he said, and the education system should help to make sure that lack of finance doesn’t stop young people with good business ideas, by offering financial support themselves.

“Finance should not be their problem and the finance system should not stop them from being entrepreneurs, but today it doesn’t come anywhere near young people.

“It is aimed at the people who already have lots of money and for whom we have to go to work. The whole system is wrong,” said Yunus.

A recording of the conference is accessible here.

Nic Mitchell is a freelance journalist and PR consultant. He runs De la Cour Communications and blogs at www.delacourcommunications.com.