In many respects, our universities are a huge success. At the end of the Second World War, there were 21 of them catering for 2% of the population. There are now 142, attended by almost 50% of school leavers and in the international rankings, only the United States has a greater number in the top 25. The UK currently receives up to £1.5 billion a year in EU research grants and hosts some 440,000 overseas students, who contribute £16 billion a year to the economy in fees and living expenses. In terms of soft power, the Heads of State of 58 countries went to university here, compared with 57 in the US and 33 in France. But in judging the success of our universities it is necessary to look beyond income and reputation and ask the question, what are they for, and how well do they serve the interests of young people, the economy and the country as a whole?
First, a university education should be beneficial to the development of the individual – and can be justified on that basis alone. Second, it marks for many students an important staging post on the road to adulthood and autonomy by enabling them to leave home and build new networks of friends and acquaintances. Third, it helps students to decide on their future careers and promotes the rational organisation of the workforce by providing a certificate of knowledge, application and ability. And fourth, it plays an important part in developing the skills and knowledge that the country needs.
The first and second of these objectives appear to be largely achieved, with surveys indicating that most graduates are pleased they went to university. However, it is equally clear that the third and fourth bjectives are not being properly met, with an obvious mismatch between the skills and knowledge being taught and those the country needs.
At the same time, almost half of all current students, particularly among those from lower income homes, will never recuperate the cost of fees paid, the accumulated interest on their loans and earnings foregone as a result of deciding to continue to study after leaving school. Encouraged to behave like private businesses as part of the neo-conservative drive to marketise as many aspects of life as possible, rising tuition fees have encouraged universities to provide courses that are popular and cheap to deliver; with an arts or social studies course costing about £2,000 a year, compared with £12,000 for a course in engineering and £18,000 for a course in medicine.
Reflecting this, the UK now ranks 16th out of 20 OECD countries in terms of the proportion of the population with technical qualifications, with a grave shortage of graduates in science, technology, engineering and medicine. Engineering UK estimates that, with a shortfall of over 20,000 graduates a year, British Universities are currently only producing half the number the country needs. At the same time, some 2,500 students a year are graduating in sports journalism; more than 50 times the number of jobs becoming available.
At just under 50%, Britain is not exceptional in terms of the proportion of school leavers who go on to higher education, with fast growing South Korea and China now educating over 70% of young people to university level. Young people leaving school today can expect still to be working in fifty years time and in an economy which is far more knowledge intensive.
The issue, therefore, is not to discourage young people from staying on in education but to ensure that universities offer courses that address the emerging opportunities and that all school leavers have the resources they need to make hard-headed choices about the options open to them. In this connection, it is important to note that in Germany, which is frequently quoted as a model of good practice in terms of vocational and technical training, only 27% of school leavers go to university, with many school leavers who in the UK would go to university opting for vocational training in prestigious technical high schools.
Funding Post-18 Education
The rise in the proportion of school leavers going on to post-18 education has made university funding a major issue. The Party does not believe that it would be fair, or a proper use of resources, for taxpayers to pay the full cost of university education for all students, poor or rich. This would cost some £8 billion a year, which could be better spent improving secondary school education and supporting high quality training for the 50% of school leavers, mainly from poorer households, who go straight into the world of work.
But it is also clear that the system of student loan-based tuition fees, which was introduced under Labour in 1998 at a level of £1,000 a year and raised progressively to the current level of £9,250 (in England), has been a disaster. The system is opaque, ill-thought out and bureaucratic. It was introduced from the US for reasons of electoral expediency and to massage the public sector borrowing requirement and was based on wholly unjustified assumptions.
Giving universities the right to determine the fees they charge (within a cap) has not as predicted led to a market based on fees, as almost all have chosen to charge the maximum fee, creating a total student debt of a staggering £118 billion, according to the Office of Budget Responsiblity (OBR). While most students in elite universities and those from better-off households can expect a financial return on their investment over their lifetimes, many others will never recover the cost of their loans.
It is also clear that the assumption that a high proportion of graduates would actually pay back their loans was wholly unrealistic, with the OBR now warning that only 31% of loans taken on by students matriculating in 2017-8 will be paid back – leaving £28 billion unaccounted for in the public accounts. The fact that authoritative sources envisage a problem of this scale is a clear indication that the present system needs to be replaced as soon as possible.
Meanwhile, Germany provides some of the best university education in the world free, while the Scottish Government supports the cost of university education for residents. The situation in England (and to a lesser extent in Wales and Northern Ireland, where the cap on tuition fees is lower) has come about because of the misguided and corrupting neo-conservative concept that education is a market and universities fundamentally no different from private businesses, which balance their accounts by selling education to student customers.
The Radical Party Proposes:
- An integrated approach to post-18 education
- A fair system funding
- Ensuring applicants make informed choices
An integrated approach to post-18 education
Ensuring applicants are properly informed
Inadequate careers guidance and the mismatch between courses offered and the realities of the jobs market have led to a situation where up to a third of graduates end up taking non-graduate jobs. This impacts negatively on rational recruitment, with job seekers with degrees displacing those without, even though the latter may prove to be a better long-term choice. In this sense, a system which should rationalise the labour market has ended up by distorting it.
They should be required to take account of the realities of the labour market in determining what courses to put on and to do more to ensure that applicants fully understand the likely long term implications of choosing particular courses. To help address this problem investment in careers guidance in schools should be increased and the funding formula revised to remove the opportunity cost currently involved in offering subjects which involve the use of laboratories and expensive equipment and materials.
While protecting the resources available for higher education, the funding of tuition should be fundamentally reformed to end the situation where young people enter the world of work with heavy, long-term debts, with tuition fees in England currently the highest for public universities anywhere in the world.
The Radical Party believes that, as originally intended, tuition fees should be treated as a contribution to the cost of teaching, with the cost of research being covered by funding from the Government for research-intensive universities, together with competitively tendered grants and contracts from national, international, not-for-profit and private sector sources. This would address the injustice of students being required to cover the cost of their own education while at the same time contributing to the cost of research, which is a long-term endeavour of benefit to the whole of society. And it would end the anomoly of putting universities which are primarily involved in teaching on the same footing as those which undertake large amounts of expensive scientific research.
The issues of the funding of post-18 education and training and of the burden faced by the cohort of students who will face heavy debtedness because of the increased fees and interest charges introduced since 2010 are complex and involves a variety of stateholders. The first step should be a determined effort to make sure that all loans due are actually repaid by reducing the ceiling, closing loopholes and fundamentally changing the payment system.
The principle that post-18 education is of benefit both to the individual and to society should be reflected in an reduction in the maximum fee from £9,500 to £3,000 a year with an increased public contribution to encourage universities to increase the number of study places in subjects which are expensive to run and where there is a shortage of qualified graduate job applicants coming into the labour market.
Provisions should be introduced to ensure that fee income is used to cover current expenditure and is not used to create future income streams; for example, by investing it in off-campus student housing. At the same time, universities should be encouraged to reduce the cost of courses by collaborating in the web-based delivery of core and common elements.
The bank of mum and dad
At present, with the student loan fund privatised, graduates pay interest on their outstanding loans at up to 6.3% – at a time when Bank Rate stands at 0.75% and mortgage interest can be obtained at under 2.0%. This results from the fact that they pay for the administration of a bureaucratic system of administration and enforcement and the cost of the Student Loan Company’s profit margin.
In keeping with the principle of solidarity between generations, the Party proposes that parents with income above the earnings threshold should be required to help their children meet their annual tuition fees directly, or through a loan. Once the child’s earnings had reached the threshold level (currently £25,000 a year) he or she would then repay the loan, plus interest at a modest rate, though a surcharge on income tax.
To support this approach, a new savings vehicle would be introduced to provide a tax incentive for parents (and grandparents) to save towards the cost of their child or grandchild’s fees for post-18 education or training and, ultimately, to enhance their own income in retirement, with the loan being paid back into the savings account via HMRC. In the case of parents whose income was below the earnings threshold, the Government would pay the loan with the student, once earning above the threshold for repayment, repaying it to the public purse via PAYE.
At the same time, the 30 year time limit on the requirement to repay student loans should be removed. This would help to avoid the current situation where authoritative advisers openly recommend parents on the Internet not to help pay off their children’s fees. Non-reimbursable maintenance grants (which were phased out in 2016) should be reintroduced for students from lower income homes and provision made for the Government to subsidise the cost of tuition in areas of skills shortage and modest earnings such as nursing.
The higher education sector is now acutely aware of the need to actively promote equality of access for young people from different backgrounds, with significant differentials between the proportion of school students who go on to higher education from poorer homes and from certain ethnic groups, despite a modest improvement since 1998. Moreover, students from privileged backgrounds continue to take a disproportionate share of places in elite universities and in areas of study which lead to higher paid occupations.
Research published by the OECD covering data for 2014, indicates that the UK has been relatively unsuccessful in using the higher education system to promote equality of opportunity, showing a worse than average performance for England and Wales among the countries and regions surveyed. While universities have undoubtedly made great efforts to eliminate all forms of discrimination and to widen student recruitment, the pervasive nature of inequality in the UK, and the failure by successive governments to create a genuinely egalitarian system of pre-18 education, pose a huge obstacle. Thus, according to the Education Statistics Authority, 25% of first year medical students in UK universities were from private schools, which account for only 7% of all pupils. At the same time, research by BMC Medicine shows that on average, students from non-selective schools perform better in medical examinations than those from private or grammar schools.
Decisions about where and what to study that young people take while still in their teens may shape the rest of their lives. Much greater efforts should be made to ensure that potential applicants receive comprehensive, impartial and comparable information about the universities and courses they are considering, including outcomes in terms of future employment and earnings. Increased tuition fees have had a particularly severe impact on enrollment to part-time courses, which have seen a sharp drop in student numbers. This problem should be addressed as a matter of urgency, as part-time study makes an important contribution to equality of opportunity and to maximising the nation’s human capital.
To increase the range of options for school leavers and improve access, a wider range of one-year starter courses and two-year basic degree courses should be introduced. Universities should be required to provide formal recognition of successful completion of each year of study through certificates and diplomas, which could be recognised by employers as proof of achievement at a lower level than full degrees.
At the same time, the Government should work with the further and higher education sector and employers and trade unions to improve access to training and development opportunities for older people to reflect the growing need for re-skilling and new life opportunities resulting from the abolition of the the fixed age of retirement.
SUMMARY OF PROPOSALS
An integrated approach to adult education
Ensuring applicants are properly informed
- reintroduce maintenance grants for students from low-income families;
- promote the introduction of a wider range of one-year starter courses and two-year basic degree courses to improve access;
- encourage universities and colleges to provide formal recognition of successful completion of each year of study in a form which can be recognised by employers;
- take urgent steps to address the problem of the impact of tuition fees on enrollment in part-time post-18 education.
Funding and tuition fees
- reform the tuition fees system to end the situation where young people enter the world of work with heavy debts by:
- provide for the state to fund all research activities in universities and increase its financial support for post-18 education, while reducing the ceiling for fees from £9,250 to a maximum of £3,000 a year;
- require better-off parents to pay the annual tuition for a child under 25 fees, either directly or in the form of a loan to their child;
- once earnings had reached a given level, the child would repay the loan via PAYE, plus interest at a modest rate, into a special account though a sliding scale surcharge on income tax with the sum in the account being used to enhance the parent’s pension;
- in the case of parents with income below the earnings threshold, the Government would pay the loan with the student, once earning above the threshold for repayment, being required to repay the loan plus modest interest in the same way.