Augar review: winners and losers from post-18 panel’s proposals

Anna McKie explores what the recommendations mean for universities, students, graduates and taxpayers

June 3, 2019
Sign with multiple directions

Russell Group and pre-92 universities
The reduction in tuition fees to £7,500 would supposedly be offset by increased teaching grant for high-cost subjects and subjects that have greater “social and economic value” – typically those that offer a higher income after graduation. Graduates of older, more prestigious universities typically enjoy higher earnings, and these institutions teach a lot of high-cost subjects in science, technology, engineering and mathematics. However, the Russell Group has concerns about the top-up funding. It warns that if compensation for the cut in fees is not guaranteed, students will suffer as funding for their teaching, equipment and support services is diminished.

Post-92 universities
While there are exceptions, many courses associated with a smaller graduate premium are found within the post-92 sector. For universities already struggling financially, particularly those that teach mainly classroom-based subjects to home students, a reduction in tuition fee income is likely to add to their woes. “Some providers might choose or need to diversify provision to adjust their market position,” according to the review. However, the review also recommends increasing the amount of teaching grant funding that follows disadvantaged students, and post-92 institutions typically take a greater share of these learners. These universities might also be affected by the proposal to remove student finance support for foundation year courses.

School-leavers
Students would take out loans for tuition fees of £7,500 a year, rather than £9,250. The most disadvantaged students would be entitled to maintenance grants worth at least £3,000 a year, with the balance between this and loan funding and parental support determined by a student’s family wealth. The maximum amount of maintenance support available would be set in line with the minimum wage for 21- to 24-year-olds on the basis of 37.5 hours a week and 30 weeks a year – currently about £8,700, and slightly lower than the maximum maintenance loan currently available. Students would no longer accrue interest beyond inflation on their student loan while in study.

Graduates
The loan repayment salary threshold – currently £25,000 – would be reduced to the level of median non-graduate earnings, currently £23,000; however, as the recommendations would not be implemented until 2020-21, it would likely stay at £25,000 and then rise with average earnings. The loan repayment period would be extended from 30 to 40 years, meaning that low and middle earners would repay more of their debt over their lifetime. The highest earners would continue to pay the most, but less than now because of lower fees, the removal of in-study interest and the introduction of a cap on repayments at 1.2 times the initial loan amount in real terms.

Mature students
People would be able to access their student funding allowance to reskill later in life and to support module-level “learning in smaller chunks”. This would allow mature students to fit their study around work and other commitments and for qualifications to be built up over time. “Equivalent or lower qualifications” rules that restrict funding access for returning students would be scaled back, while interim qualifications within degrees would allow students to pause study or transfer courses or institutions more easily. More teaching grant would be put towards access and participation efforts for part-time and mature students.

The Treasury
Increasing the repayment period by 10 years and lowering the repayment threshold would allow the government to claw back a larger portion of what it has loaned out. Currently, 70 per cent of borrowers will not repay their loan in full within the 30-year payment period, and 45 per cent of the value of loans will be written off. Under the proposed system, 70 per cent of the value of loans would be repaid, but the reintroduction of maintenance and teaching grants would mean that the total public contribution would remain at about 50 per cent.

anna.mckie@timeshighereducation.com

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Print headline: Bottom line: The winners and losers from post-18 panel’s proposals

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