Unfair Deal

What makes for a fair deal? We need to know what we’re getting and what it costs; we don’t want hidden extras

The Minister for Universities and Science, Jo Johnson, has ideas for higher education that follow from this common sense idea.  In a recent speech at the Universities UK conference, he said that  students should have more information about the actual teaching they will receive. Allowing universities to increase tuition fees with inflation would be the carrot – or is it a stick – that would encourage them to comply.

And much as I admire academia, it’s true they can be as narrowly self interested as anyone else. I recall trying to get completion rates accepted for publication in the 1990s. Of course the opposition was thoughtful, reasonable and cogently put. In response we coded away, ran our computers to their computational limits, and came up with a solution to each point, only for another to pop up.

Eventually we tracked students through course changes, transfers between institutions, across years out, and so on. Sadly, when the completion rates were finally published they were subject to withering criticism by two illustrious professors, who had failed to notice that each of their prized objections had actually been dealt with!

So, good luck minister. Hopefully as a result of your efforts students will know better what they will be getting. But will students know what they have to pay?  This is what the minister had to say about higher education finances:-

‘Looking back at 2011, when we published Students at the Heart of the System, it is clear that huge progress has been made: in transparency and widening participation, but also in the way the system has been put on a sustainable financial footing’

‘Sustainable financial footing?’  I had to read that twice.  As someone who had doubts about the cost estimates from the start, and was called ‘eccentric’ by a former minister for my trouble,  I thought it was now agreed that ‘the system’ would not work as planned. Indeed the ‘Consultation on freezing the student loan repayment threshold’ concedes that ‘to keep higher education on a sustainable footing we must ask future graduates to meet more of the costs of their studies’.  In fact they also want more from students who graduated this summer, as well as those who left without a qualification.

The government’s recently proposed changes to the terms of student loans threaten to impose  extras on student borrowers  already burdened with high levels of debt, and form the basis for briefing I have written for the Sutton Trust, Unfair Deal, published today.

For most families, the student loan is not an option, it’s the only way of paying for university study, so the cost of the loan is the cost of higher education. Under government’s preferred option all students starting from 2012 onwards will be paying more than they expected when they signed up. A bad case of mis-selling.

Even with the proposed changes, the student loans will be subsidised, at least for most borrowers. But that does not make it a fair deal. And students now know they have written open cheques, which can be drawn for the next 30 years, or even longer.

Student loans are now a much less attractive deal. Students may still decide they have little choice but to go to university, so participation may still increase, but they may elect to study part-time or intermittently so that they can work and reduce debt, perhaps choosing their second or third best course if it has lower fees or allows them to live at home.

The likely results are: failure to complete, reduced academic achievement, delay in graduating or graduation from a less prestigious university, all of which would reduce the chance of getting a good job. Higher education might not become quite such a ‘powerful driver of social mobility’ that Mr Johnson believes.

Fortunately, the proposals are subject to consultation, government can, without loss of faith, revise their policy.

John Thompson, a higher education consultant, is author of the Unfair Deal brief