Experts fear student loan changes will ‘cut access’ to HE

After a three-year wait, the United Kingdom government has finally responded to an independent review of the higher education funding system in England led by banker, Sir Philip Augar, with a raft of measures that appear primarily aimed at balancing the books – and perhaps also rebalancing post-school education and training.

Many commentators highlighted how the changes, earmarked to start in 2023, will hit the pockets of middle-earning graduates almost up to their retirement, but in the shadow of the big announcements is a move causing alarm to champions of widening access to higher education to less privileged learners.

For the UK government has confirmed that it is looking at restricting student loans to cover tuition fees and living costs to school-leavers with minimum entry requirements in a move condemned by a number of higher education experts who say that after the disruption caused to schooling by the pandemic, this is no time to restrict access to higher education opportunities.

Fairer to students and taxpayers

The government is anxious to present its changes as a “fairer higher education system for students and taxpayers” and admits it is shifting more of the cost of funding of universities in England onto the shoulders of future graduates.

Key changes include reducing the salary threshold at which graduates will start repaying their student loans, which cover tuition fees and maintenance costs, from the current level of £27,200 (US$36,500) to £25,000 (US$33,500) and for repayments to continue for a maximum of 40 years or until the loan is paid off, if earlier.

At present graduates continue to pay off the loan up to a maximum of 30 years or when they fully repay the loan at a rate of 9% of their earnings above £27,220. Outstanding debt is then written off.

The current system means low-earning graduates can sometimes escape paying off any or most of the loan if their wages are below the threshold and the government’s own figures show only a quarter of students who started full-time undergraduate degrees in 2020-21 are forecast to repay their loans in full.

Only the highest earners pay off the loan in full.

Billions in outstanding loans

The government statement announcing the major reforms on 24 February said: “The value of outstanding loans at the end of March 2021 reached £161 billion and it is forecast to rise to half a trillion pounds by 2043.”

This mounting debt in outstanding loans threatens future generations, it says, and that is why it is acting now to “tackle the problem head on”.

But it will hit the pockets of future graduates hard, with The Times newspaper estimating that: “Students who take out a £45,000 loan to cover their fees and living expenses face paying back £100,000” compared with £46,840 under the current 30-year arrangements in which the government writes off £50,833 in loan debt.

To minimise the blow to future graduates, the government has announced that the tuition fee cap will be frozen at £9,250 (US$12,400) for a further two years – up to and including 2024-25 – and the interest rate for new borrowers, who will be starting courses from 2023-24, will be set at the retail price index (RPI)+0%. At present, a 3% interest rate is charged on student loans on top of the RPI.

Higher and Further Education Minister Michelle Donelan said the government would also be investing £900 million in post-18 education over the next three years and will launch a consultation on lifelong loan entitlement, which could be worth four years of post-18 education (£37,000) to be used for lifelong education or training.

Move will put off some potential students

Professor Graeme Atherton, director of National Education Opportunities Network (NEON) based at the University of West London, and a key figure behind World Access to Higher Education Day (WAHED), told University World News the higher costs of repaying the loans “will undoubtedly deter some potential students from applying to higher education, in particular older students who are much more price sensitive”.

He felt younger potential students “do not really understand the detailed nature of the student finance system” and simply “know that it is loan based and that you pay back when you start working”.

He said: “What will be important is that the core messages that loans are repayable after graduation and over time are not diluted.”

Alarm over restricting access to loans

Atherton was more alarmed that alongside the changing financial arrangement was the potential introduction of minimum entry requirements to qualify for student loans.

News of this leaked out the day before the government announced its response to the Augar review and has created unease among many in the higher education sector in England.

Atherton told University World News: “This presents another real threat to widening access to higher education. This change appears entirely politically motivated and part of the government’s approach to drive down the costs of higher education by restricting student numbers.”

The chair of the All-Party Parliamentary Group for Students, Paul Blomfield, MP, also warned that government plans to restrict student loans threaten their aim to widen access to universities.

Wrong time to make decisions after pandemic

Blomfield said that after the disruption caused by the pandemic to the schooling of young people, “this is the wrong time to make decisions which will damage their chances further”.

Blomfield said: “Those who enter our universities must be able to demonstrate that they can benefit from higher education, but inflexible minimum entry requirements risk turning back the clock a generation. We’ve waited a very long time for the government’s response to the Augar review and we must get it right.

“These proposals cut across the government’s stated ambition to widen participation, blocking the most disadvantaged – who we know have poorer outcomes at GCSE [General Certificate of Secondary Education] – from accessing student loans and the opportunities higher education gives them.

“Children on free school meals are only half as likely to achieve a grade 5 at GCSE in English and maths as their wealthier peers.”

Dr Diana Beech, chief executive of London Higher and a former policy adviser to Conservative universities ministers, said: “Despite only setting out potential directions of travel, it is nevertheless concerning to see minimum eligibility requirements being tabled as the key to unlocking future access to student loans.”

She said it would have disastrous implications on students from London’s most disadvantaged communities, locking out almost half of free-school-meal-eligible learners in outer London who do not achieve a grade 9 to 4 or A* to C pass in English and maths GCSE, 40.1% of black pupils and 86.1% of Special Educational Needs (SEN) pupils.

Beech told Times Higher Education that the sector was “already unnecessarily stretched responding to multiple Office for Students’ consultations on future regulation. In the interests of properly considered responses, we appeal to government to stop this carpet-bombing of consultations”.

Former UCAS chief supports GCSE loans threshold

However, in a blog for the Higher Education Policy Institute, Mary Curnock Cook, former chief executive of the Universities and Colleges Admissions Service (UCAS), said that, while universities by law have autonomy over admissions, the government “can, and clearly now will, set a minimum eligibility threshold for access to tuition fee and maintenance loans”.

The question it is consulting over is whether this should be set at two grade E passes at A-level, or equivalent, or a minimum grade 4 at GCSE in English and mathematics.

“Not only do I think the GCSE threshold option is preferable for the higher education sector, but, more controversially, I also believe that it could transform access and participation,” she wrote.

She argued that it is a lower threshold than the two E grades at A-level, which many universities already use for access to their undergraduate programmes, and is an exam taken while students still have two years left in compulsory education which can be used for coaching and supporting potential university applicants “when they are still focused on education”.

Cook said that while it was “accepted wisdom that minimum entry requirements (MERs) are a bad thing”, she hoped “that new MERs set for GCSE English and mathematics might have a positive impact on participation in higher education”.

Rebalancing post-school education

In another reaction to the government response to the Augar review, David Goodhart, head of skills and training at the Policy Exchange think tank, said: “These measures are another important step towards rebalancing post-school education and training.

“For too long we have been over-producing academically trained youngsters with low-quality degrees who are unable to get graduate jobs, while employers are desperate for people with middle-level technical and digital skills.

“The lifelong loan entitlement should also help to reverse the plunge in part-time and mature students in higher education, while targeted investment boosts those higher academic skills that we do need in STEM disciplines.”

Nic Mitchell is a UK-based freelance journalist and PR consultant specialising in European and international higher education. He blogs at www.delacourcommunications.com.