Funding review: ‘radical change needed’ to deliver fair system

Students unlikely to be won over by tweaks to current funding arrangements, says sector leader

February 19, 2018
Theresa May speaking at podium
Source: Reuters

A review of post-18 education is unlikely to quell anger over student finance in England, experts have predicted.

In her speech launching the review on 19 February, prime minister Theresa May said that she shared some of the concerns about undergraduate funding arrangements and that the review would “examine how we can give people from disadvantaged backgrounds an equal chance to succeed”.

The options it could consider could include lowering tuition fees, reintroducing maintenance grants, changing the interest rate on student loans, or adjusting the length of time graduates are expected to make repayments for. But Ms May ruled out abolishing fees.

Patrick McGhee, assistant vice-chancellor of the University of Bolton, said that radical changes to the funding system would be needed to win students’ support.

“It is difficult to believe that students opposed to fees will be won over by a new set of what will probably be rather complex arrangements, only at best slightly less burdensome but less familiar than the current ones,” he said.

The electoral gains to the Conservatives from the review were likely to be minimal, added Professor McGhee, a former vice-chancellor of the University of East London.

“Jeremy Corbyn and the Labour Party can simply sit on the sidelines repeating the manifesto mantra of ‘we will abolish fees’ [because] every proposal that is leaked from the review, or put to it by a pundit, will inevitably fall short of that simple attractive model,” he said.

Nick Hillman, director of the Higher Education Policy Institute, said that “serious sums of money” would be required to cut tuition fees to £6,000 – one option that has been suggested – or to reintroduce maintenance grants.

With the Conservatives in a minority government, it was also uncertain whether the government would be able to push through any changes in legislation recommended by the review, he added.

The review will be led by the government, supported by an independent chair, financial services expert Philip Augar, and a panel. It is expected to conclude in early 2019, but will publish an interim report in the meantime.

David Green, vice-chancellor of the University of Worcester, said that the review was driven by the need to address the “perception of unfairness” on tuition fees, principally caused by the 6.1 per cent interest rate. “It appears deeply unfair for graduates to pay a real interest rate of 3 per cent [above the retail price index inflation measure] and creates the perception that an unfair system is there to disadvantage the young and help the old,” Professor Green said.

However, Professor Green, an economist, said that concentrating on the “fairness” of student loans dodged a more difficult question.

“This attempt to run a highly progressive income tax system through student loans is complete rubbish and really dangerous as it segregates the system into those with loans and those without them,” he said.

Noting that the highest rate of income tax under Margaret Thatcher was 60 per cent, Professor Green added: “High earners should be paying higher tax rates, and we shouldn’t confuse this with the student loan system.”

Members of the review panel include Baroness Wolf of Dulwich, Sir Roy Griffiths professor of public sector management at King’s College London, and Edward Peck, vice-chancellor of Nottingham Trent University. It also includes Sir Ivor Crewe, master of University College, Oxford; Bev Robinson, principal of Blackpool and The Fylde College, and Jacqueline De Rojas, president of techUK.

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