What kind of future?

In this article from the Spring 2003 issue of Directions Mike Cuthbert (University College Northampton) examines the implications of the government’s recent white paper on the future of higher education for law students, focusing on the issues of funding and student debt.

The government has provided us with an opportunity to look into their crystal ball with regard to university education. The recent white paper, The future of higher education, attempts to deal with such problems as the under-funding of universities and the indebtedness of students, especially where it is thought to deter those from lower income families – and all this within the overall aim of increasing participation by 2010.

At present 43% of the current cohort aged between18-30 are participating in higher education, but the target of 50% by the end of the decade remains. This is against 20% in 1990 and only 6% in the early 1960s. Funding per student fell by 36% between 1989 and 1997, so this tremendous growth has been accomplished with a lack of funding that the government seeks to correct. Higher education is promised an average 6% per year increase in real terms over the next three years. But where is this money to come from?

Currently the student fee of £1,100 covers a quarter of the average cost of a university degree course. The general taxpayer will continue to contribute a substantial share, but an increasing focus is to be placed on the student. The reasoning is that it is the graduate who benefits from higher education, in that over their working life their income will be 50% higher than a non-graduate’s. The white paper gives law as the highest earnings premia for women graduates between1993-1999, and the recent figures produced by the Association of Graduate Recruiters (see their Report on graduate salaries 2002) confirm this, with £28,000 being given as the average starting salary in law. However, although the white paper recognises the advantages to our economic competitiveness of higher education, it ignores the contribution made to general taxation that such graduates make.

The government is adopting the Australian terminology of ‘contributions’ rather than fees charged to students, who currently assume that they are paying the full cost. Up-front fees will be abolished for all students, with the repayment of debts made through the taxation system. The new ‘Graduate Contribution Scheme’ will require the graduate to pay their fees and student loans after graduation, when they are earning at least £15,000. Given the average graduate starting salary in 2002 of £17,000 only those working in the voluntary sector would be unlikely to start repaying immediately. The supporting document for students and parents on the white paper provides some examples of what this may mean for graduates. “Khalid earns £60,000 after five years as an accountant in the City and repays his £19,141 loan within six years”, this despite the high costs of living in the south east! Other examples are perhaps more realistic, with the graduate repaying their loans over nine to 15 years.

Will such debts deter the ‘talented and best from all backgrounds’? The government is concerned to provide fairer access to higher education, so grants of up to £1,000 a year are restored for students from the lower income families. This is said to benefit a third of students. Is it generous? The Education Maintenance Allowance, paid to those 16-19 year olds who stay on at school or college to ‘qualify for higher education’, is worth up to £1,500. So perhaps we can say it is a gesture to support those students whose parents are unable to make a financial contribution, but it cannot be expected to weigh heavily in the minds of those making the decision whether to go on to university. The Law Student 2000 study and others undertaken in the last few months have all indicated that students from lower income families are deterred from going onto higher education by the potential debt they may accumulate over three years. There are exceptions to this amongst some of the ethnic minorities, so the provision of a grant may encourage such families to support their children through university.

The white paper suggests that universities should be allowed to reduce their dependency on government funding in the longer term by following the American tradition of endowments from business and alumni. This is going to take a big shift in the psyche of the business community, unless they are sponsoring research related to their business. Will it be helpful for law? Unlikely, unless perhaps appropriate tax breaks and other incentives are made available, but how about our alumni? In the example above Khalid may have the income, but presumably he wants a life involving a mortgage etc, and if graduates do not repay their loans until they are in their 30s are ‘gifts to their alma mater’ going to be high on their list?

In the shorter run the government suggests that ‘top-up’ fees may provide the income universities need. In 1997 Lord Dearing established the principle that it is right for students to make a contribution to the costs of their courses. In 2006 universities will be able to charge up to £3,000 in fees for an undergraduate course. As a popular subject used by many universities to bolster low recruitment in other subjects, law is expected to be charged at this higher fee. Will this affect recruitment? In Australia, where the Higher Education Contributions Scheme places law in the top category along with medicine, there has been no reduction in the demand for law degrees, however law schools have suffered, because the extra fee income has not been passed onto them. This is something that UK law schools need to plan to avoid.

Universities will not be allowed to charge top-up fees unless they have an ‘Access Agreement’ that seeks to help to reduce the social class gap in entry to higher education. Some universities have a good record of taking students with 360 points or three ‘As’ regardless of social background, whereas others need to do better! An ‘Access Regulator’ is to be appointed to oversee the implementation of access agreements and to ensure that admission policies assess the potential of every candidate. Only those universities that have satisfied the Regulator will be allowed to increase their fees. This will contribute to meeting government targets, but there is also a role for further education. The white paper states that 11% of higher education is currently delivered by further education colleges, and this will increase with the introduction of more foundation degrees. Also, if higher education is to recruit suitably qualified students there must be an increase on the current 46% entry rate into tertiary education.

As the Education and Skills Secretary said: “The guts of the white paper focuses on access. It is a national disgrace that students from middle class backgrounds are three times more likely to go to university than those from poorer backgrounds”. However, there are other points in the white paper, one important one on research and teaching. The current emphasis on research has been identified as being at the expense of teaching and knowledge transfer, and the white paper gives universities a principal responsibility for helping the working population to adjust to the future: “…the main function of universities must be high quality teaching”, so we have a focus that will mean more teaching awards, a new ‘teaching quality academy’ and centres of teaching excellence. On the other hand, we are to get a new research grade of 6*, so that some universities will receive extra resources in order to compete as a world-class institution. The white paper records that some countries, such as the USA, where research degrees are confined to 200 out of 1,600 ‘four years’ institutions, concentrate their research in relatively few institutions. Got the vision?

Last Modified: 9 July 2010