Hopes rise for ‘something big’ on postgraduate funding

A thinktank has released modelling based on a popular proposal for a state-backed loan scheme

October 30, 2014

Further details of a “workable and affordable” model for a state-backed postgraduate loan scheme have been unveiled as leading sector figures suggest that the government could be about to back similar support for such students.

With the chancellor George Osborne known to be preparing an announcement on postgraduate funding in his Autumn Statement, the Institute for Public Policy Research has released modelling on a popular proposal for a loan scheme.

The centre-left thinktank says that a loan of £10,000 could be provided to taught postgraduate students at a subsidy cost of £44 million a year, according to its report, titled Reaching Higher: Reforming Student Loans to Broaden Access to Postgraduate Study.

That is less than the £50 million scheduled to be announced in postgraduate support on 3 December – money left over from the recasting of the undergraduate National Scholarship Programme – with Treasury insiders hinting that it may take the form of a loan scheme, rather than simply bursaries.

Under the IPPR’s model, which stems from an idea first put forward by economist Tim Leunig, now a policy adviser at the Department for Education, and later by the National Union of Students, postgraduates would repay 9 per cent of their income between £15,000 and £21,000 over 30 years. The thinktank says that the proposal is “eminently affordable”, with the Treasury writing off just 6.9 per cent of loans (£230 per person on average).

That is far lower than the 40 to 45 per cent of undergraduate loans currently being written off, which amounts to a loan subsidy of £4.2 billion, the IPPR says.

The scheme would also require direct financial support for postgraduate courses to total £103 million a year; current recurrent spending on taught postgraduate courses totals about £130 million.

It would also add just over £1 billion to the national debt in the short term, the IPPR says.

“Given that 93 per cent of this money will be recouped in graduate repayments, we believe this is an investment worth making,” says Rick Muir, the report’s author.

Several universities are already testing small-scale loan schemes funded by a £25 million pilot scheme provided by the Higher Education Funding Council for England.

Madeleine Atkins, its chief executive, has said that she is “hopeful” that Mr Osborne will announce further postgraduate support in his speech in December, while Greg Clark, the universities minister, has also hinted at a major announcement at that point.

But Professor Atkins said that she expected details of postgraduate funding to be released no later than December because “universities need to get out and market that scheme to make sure they have students coming through”.

“If we are going to have a [postgraduate] scheme in 2015-16, we really need to get on with it,” she told Times Higher Education.

Nick Hillman, director of the Higher Education Policy Institute, said Mr Osborne may be considering “something big” on postgraduate funding, particularly if it supported the sciences, social mobility and economic growth.

“Every time someone has gone to him with a serious higher education problem, such as protecting research funding or uncapping student numbers, he has responded very positively,” said Mr Hillman.

“However, we have not yet worked out how he will pay for last year’s big policy [lifting the cap on student numbers], so it would need to be an almost zero charge scheme,” he added.


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Reader's comments (1)

There seems to be growing support for Alan Milburn’s view that a Government-backed postgraduate loans system is essential to help those from disadvantaged backgrounds to undertake further study. We would urge caution on this view. At the University of Sheffield we have collaborated with 5 other universities on one of the HEFCE Postgraduate Support Scheme projects. The pilot provided targeted financial support to test demand from under-represented groups. We found that there is overwhelming demand from eligible applicants for an appropriately promoted PGT scholarship scheme using widening participation criteria. Given most postgraduate taught students can and do pay, a state backed income dependent loan scheme for postgraduates would only displace private resources and employer sponsorship and prevent commercial lending solutions. Rather than the extension of loans from the SLC to postgraduates, the evidence from our study suggests that institutional and benefactor funding for a postgraduate scholarship scheme should be provided, alongside matched state funding and the provision of guidelines on widening participation criteria. Rather than spending taxpayer money on defaults on state lending, the government role might be to support those with the talent and ambition but not the means to pursue their academic studies. Universities, employers and benefactors have a shared interested in matching state scholarship funding. We argue this solution will have a greater societal impact in ensuring fair access to the professions. An interim briefing on the results of our study can be found at: http://www.sheffield.ac.uk/polopoly_fs/1.412725!/file/PSS_Interim_Report.pdf‘ Dr Tony Strike, The University of Sheffield.

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