Fees, loans and debt – context for the national conversation

Health warning: this is a fast moving area, so likely to be out of date as soon as published! 

Labour’s promises to abolish tuition fees (and forgive loans for graduates) have been credited in some quarters as leading to an increase in turn-out amongst young people at the election, and a consequent increase in the Labour vote. The “national conversation” is being pursued actively in all the media by politicians and commentators.  So how did we get to this point?

The government’s electoral problem -are tuition fees the key to why the government lost its majority?

Did young people turn out in massively increased numbers as claimed immediately after the election? Some suggested a turn out figure above 70%.

  • The BBC reality check uses two polls – a YouGov poll released on 13th June and an Ipsos Mori poll released on 20th June. “YouGov found that about 58% of people between the age of 18 and 24 voted, while Ipsos Mori estimated that it was 54%. Both of those figures are a proportion of all 18- to 24-year-olds, not just those who are registered to vote.
  • That is compared to an Ipsos Mori poll for the 2015 election showing 28% turnout amongst that group, 43% of those registered to vote. The piece adds “The overall turnout (and these are actual figures – not based on polling) was 69%, compared with 66% in 2015, so it appears that the youth vote increased by considerably more than the overall turnout.”
  • See also the Full Fact article

Of course, we don’t trust polls as much as we used to.

The House of Lords have appointed a new committee to look at Political Polling and Digital Media, which will report by March 2018 – so maybe that will give us more confidence.

Did the increased number of young voters vote Labour? The BBC reality check says all the polls show a substantial swing to Labour amongst younger voters (18-24).

So was the swing to Labour amongst the young a result of tuition fee promises? That’s a very reductive perspective – surely, students are interested in the same issues as everyone else? And, of course, many among that group do not attend university. HEPI had a piece on student voting intentions in May based on a YouthSight poll. At BU, the Students’ Union (SUBU) organised the only local hustings for parliamentary candidates with all five candidates present. The audience was mostly students and the debate was wide ranging. It covered public sector pay, Brexit, immigration, the economy, housing, security and local matters amongst other things. Tuition fees barely got a mention.

The tuition fees problem

The debate about tuition fees is complex, and highly political. So some key points:

What had happened before the election?

During the passage of the Higher Education and Research Act 2017, issues with fees and loans, and the repayment threshold in particular, were regularly discussed in both houses. There was a debate on a “motion to regret” on 5th April in the House of Lords.

The government amended the bill so that inflation based tuition fee increases (already permitted under legislation, but requiring a statutory instrument to implement each change), now require positive approval by both houses. The inflation-based increase in the cap for students starting in 2018/19 should be announced relatively soon – and is likely to be more than the £250 that takes effect this September.

The government also delayed the differentiated fee cap linked to TEF – see more in our HE policy update from a couple of weeks ago. As I wrote on Wonkhe recently, the link between fee increases and TEF has caused all sorts of problems with the TEF – it isn’t the only reason that the NUS are opposed to TEF and called for a boycott of the National Student Survey (NSS) but it is one of the reasons – apparently 25 student unions supported the boycott, and at least some will not have valid NSS data for the TEF next year.

In the election campaign there was a great deal of debate about the affordability of the Labour commitment to abolish tuition fees – one analysis on Wonkhe here.

And what is happening now?

Damian Green, the First Secretary of State, called for a “national debate”. Michael Gove explained and defended the current position, and Jo Johnson appeared on Newsnight to defend it.

There has also been a focus not just on the loans system but the level of fees and the suggestion of a cartel operated by universities, started by Lord Adonis in the Guardian.  See the response from the Adam Smith Institute here.

Jo Johnson argues that the fees improve access to HE for deprived students because of the removal of the student numbers cap, that it provides sufficient funding for universities to offer world-class teaching and research, and is fairer to the tax-paying public. And on the Radio 4 Today programme he said that the unpaid written-off debts are the government’s contribution to higher education funding.

There has been some speculation that a Conservative manifesto commitment to review Further Education funding will lead to a consequential shakeup of university funding.

Amongst many blogs and articles on the subject, David Phoenix has written for Wonkhe about why it is time for a review. He argues that while Labour’s abolition of tuition fees isn’t progressive the Conservative alternative doesn’t work either and calls on the sector to find a balanced solution. He writes: “The majority of students do not object to making a contribution to the cost of their education, but it’s the scale of the contribution that matters. A better balance between the student (or graduate) and state acknowledges that students will benefit financially from their degree, whilst also acknowledging the wider public good of higher education: social mobility, civic engagement, productivity, and innovation.

Speaking of the recent election result, he states: “It’s clear to me is that young people have, in large numbers, rejected continuity of the current system. We also know that the current funding structure is being quietly rejected by potential mature applicants. The job is now for the universities sector and policy makers to work together to rebalance the system to meet the needs of learners, our economy, and our public services.”

And the Wonkhe article noted notes that the debate should be about maintenance as well as tuition fees.  It quotes the Dearing Review of 20 years ago: “One backbencher in the debate on Dearing nearly 20 years ago presciently remarked: “There is real concern that the Government’s decision not to follow Dearing’s proposal to introduce tuition fees while maintaining the maintenance grant, but rather to abolish the maintenance grant and replace it with loans will, far from widening access, narrow it.” Theresa May – for yes, it was she – hit the nail on the head. Discussions about affordability and access have to take place while looking at the entire student support and HE funding package. Taking a report (as happened with both Dearing and Browne) and cherry-picking politically or economically attractive aspects is not a recipe for a fair or sustainable system.”

Realistically – what might happen next?

Labour are sticking to their policy, despite affordability questions and criticism of the repeated – and inaccurate- claim that fewer people from poor backgrounds are going to university.

Looking at the voting statistics above, it seems unlikely that this policy had as big an impact on the outcome of the election as was initially claimed. It is worth noting that, apart from students, the policy may also have been popular with parents – but still unlikely to have been a game changer in its own right as a single policy.

So what will the government do?  Publicly they are sticking to the status quo despite the rumours – but when we read a clear statement of no change from a minister there is always a question these days about whether that might change.  Some options short of a drastic change include:

  • There might be some sort of review/consultation – it is hard to see that this will result in major changes to the structure but it would look like doing something
  • There might be a change to the interest rate – to delay or reduce the rise that will otherwise happen in September
  • There might be a relenting on the repayment threshold freeze – passed in 2015 for 5 years – perhaps it won’t be extended, or could be increased early
  • They could choose not to increase the fee cap by inflation at all in 2018/19. There is no rule that says they have to; even though they announced that they plan to as part of the White Paper/TEF implementation.
  • There might be more consideration given to maintenance funding arrangements. As noted above, these add hugely to student loans, and disproportionately so for students from lower income families.

It is hard to see more drastic changes than that at a time when there are so many calls on the “magic money tree”. Although I’m still not making predictions in this uncertain world…

This is an edited and updated version of a blog written for the regular policy update on the Bournemouth University Research blog on 10th July 2017 by Jane Forster, VC’s Policy Adviser at Bournemouth University.

 

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