If you went anywhere near the news earlier this week, you’d have heard that a controversial report about business and universities in ‘Turbulent Times’ has been released.  The report from the Confederation of British Industry (CBI), recommends that the Government raise tuition fees and temporarily drop the often quoted 50% participation rate, as they find it unrealistic in the current economic climate. [Full Report – 1.5Mb PDF]

These suggestions have greatly angered the National Union of Students (NUS).  Much of the condemnation comes not from the majority of the 24 recommendations made by the Task Force, but by those relating to limiting student support.

The four top priorities of the Task Force are as follows:

1. To help raise the numbers and quality of graduates in science, technology, engineering and maths;
2. To ensure all graduates have employability skills;
3. To provide the support required to maintain the quality of teaching and research in HE;
4. Government should encourage greater diversity.

This sounds great, but the third priority rests greatly on increasing student contributions through higher fees, removing interest rate subsidy on loans, and so on.

The report suggests that “an increase in fees appears inevitable”.  This is based on the current system of HE funding, which the NUS is keen to see overhauled.  With the Task Force looking for change and making recommendations on how to move forward, it’s a shame that the subject of fees looks less to changing the situation and more to raising the bar.  They argue that higher fees have not impacted upon participation, but who’s to say that won’t change?  Anyway, greater debts (along with higher interest rates) may not be sustainable given the number of graduates now entering the workforce.

Robert Peston has written a thoughtful piece on his blog, asking whether students should pay the bills of the older generation who received a free university education.  He says:

“So some may well argue that as and when a new government decides to make cuts or increase taxes – to fill the hole in the public finances created by the current generation – its first instinct should probably not be to penalise students. Shouldn’t the older generation bequeath them something other than debt?”
Robert Peston – Should Students Pay Our Bills?

The report also calls on the Government to “postpone its 50 per cent participation target for HE”, but that target has already come into question.  To make a truly successful go of raising fees and introducing even greater debt to students, wouldn’t participation rates have to decrease quite considerably from even today’s numbers?  If so, how would that not create a problem for encouraging wider participation?  And if not, how could such a large number of graduates be expected to succeed in paying back such hefty amounts (that get heftier with real rates of interest…) based on today’s “Turbulent Times”?

We’re regularly told that graduates can expect to earn a lot more than non-graduates over their lifetime, but this general point is too basic and doesn’t properly cover the range of people graduating.  Many people now leave university to find that the monetary boost in salary may not be as impressive as they’d perhaps thought.  A degree alone isn’t a golden ticket to a dream life.

The Task Force recommend that businesses and universities should strive to work together more closely, while universities should also work to collaborate more effectively with each other.  The report also suggests that businesses should be more willing to fund students in relevant degrees and provide greater support to ensure students develop the right skills for the workplace.  There are also calls for more funding and support to go to students before university, especially in maths and sciences.

However, these aspects have understandably been overlooked.  The CBI Task Force report is likely to bring more concern to prospective uni students and their parents.  Sinead Brennan, President of Reading’s SU, was unhappy with the impact this report could have.  Speaking on the latest NUS Policy Podcast, Brennan said, “They’re going to see things like this or, more importantly, their parents are going to see things like this and say ‘no way are you going to university’.  Not just widening participation, but on an individual basis there are going to be people out there that will see these headlines and perhaps might not go to university now because of it, which I think is such a shame.”

All this comes at a time when the Times Higher Education suggests that more public investment should be made, not less.

It’s not surprising that most students would rather be granted a free (or very, very cheap) uni education.  That’s what happened in past years.  So while those who benefited from a free education suggest new students pay more than they are already paying, what will those graduates be suggesting in decades to come?  Charge even more?  Return to free education?  Or will the look of UK Higher Education be so different that (if it still exists as the world-class institution it currently is) these questions may not even be relevant?

Whatever the case, let’s hope the future is a bright one…for the sake of everyone!

You want some further bedtime reading?  You got it!

BBC – Charge students more, say bosses
London Student – How Should Higher Education Be Funded?
Telegraph – Comment
Guardian – Wes Streeting comments
Guardian – University finance: The debate that isn’t

In amongst the usual reports of Mickey Mouse degrees (which I’ve covered in the past), student costs and debts are now also in the spotlight.

One survey, for the NUS, has revealed that some degree courses involve massive hidden costs.

Maths and Computer Science students have been found to spend the most ‘hidden’ money.  They spend, on average, £1,430 a year on books, trips, equipment, extra coursework/exam fees and so on.  Least hit are those studying a degree in Education, whose average yearly spend is said to be £432.48.

It’s no surprise that some outlay is needed to buy books and fund the odd trip, but would prospective students realise just how much money was involved in order to earmark for study-related purchases?

There is no way students can currently tell how much they need to spend on these extras.  This doesn’t help when many students are only just getting to grips with financial planning and may not have enough funds to cover the cost of these necessary purchases.

Better mechanism needs to be in place to ensure students are aware of various costs, so they don’t receive surprises further down the line.

Worse still, the NUS survey also found that, as students became more strapped for cash as time went on, half of all final year students needed paid employment or a different source of loans in order to cope.  All this at a time when study is so crucial, not just at that moment, but also for the future.  If a student cannot put their full attention to their degree, how can they get the most from it?  And how upsetting must that be when it’s costing a great deal to them in the first place?

Talking of this massive cost, another survey has revealed that student debts are rising fast.  So fast, that the average rise is over 10% higher on last year, with students reaching an average £6,626 debt during the year.

The Push Debt Survey found that by the end of a degree, the average student would have a debt of around £23,500.

This morning, Radio 4’s Today programme spoke to Nick Barr from LSE (who helped design the student loans system), and NUS President, Wes Streeting, to discuss the debt report.

Barr compared credit card debt with student loan debt, arguing that “£23,000 of credit card debt would give parents sleepless nights.  This shouldn’t.”

Streeting went on to say that in the forthcoming tuition fees review:

“[Barr] and others may well be arguing for a higher rate of interest for some or all students on their student loans.  There is a push at the moment…for commercial rates of interest or real rates of interest on student loans and I’m glad he fully supports the current system at present.”

Barr brushed aside this comment, saying that nobody in their right mind would suggest credit card levels of interest.

Two things on my mind:

1. Commercial/real rates of interest may not be as scary as credit card rates, but they’re a scary enough prospect.  With the tuition fees review, they have the potential to be as scary as personal loan interest rates.  And if rates do increase to reflect something higher than inflation, I imagine the loans may start to be taken into account as a true source of debt.  At least in the current system, student debts are generally kept to one side.  If this changes, loan applications such as taking out a mortgage could become even more difficult for new graduates.
2. Massive student debts may or may not give parents sleepless nights.  But isn’t this about the people who actually HAVE the debt!?

Nick Barr later said on Radio 5 Live, “this debate about student debt is very largely a red herring.”

I totally disagree.  Yes, people still go to uni. Yes, applications are still rife. Yes, National Student Survey results are mainly positive. But…

No, that doesn’t mean fees are way forward.  Especially if the fees could soon increase.

If the cap on student fees is raised or, worse, completely removed, it will cause more debt woes.  Let’s get behind a different method of funding Higher Education!

—

After this bad news, there is a bit of light relief.  I laughed at the news that one in five students will find love after meeting someone at university.  Aww, bless!

I met the love of my life in a year out before uni.  But you know what?  Most of my year out was spent hanging around…a university.  And I took a liking to one of the students there.  So, in a way, I still found love after meeting someone at university.  It just wasn’t at the uni I attended!