Ministers consider loan changes and minimum entry bar in England

Government’s ‘interim response’ to Augar review puts off big decisions but signals drive to lower costs of system

January 21, 2021

The Westminster government is to consider changes to student loan repayments and the introduction of student number controls using an entry tariff threshold, according to a short “interim response” to the Augar review of post-18 education.

The response, running to just 13 pages, puts off major decisions to be resolved in the “final conclusion” to the Augar review at the next comprehensive spending review, which would come in autumn 2021 at the earliest.

But it spells out that government concern about the rising costs of the student loans system that funds higher education – pushed higher by the coronavirus pandemic’s impact on jobs and loan repayments – could lead to major changes for English universities.

The response, which signals a continuation in the freeze of the tuition fee cap at £9,250, does not address the Augar review’s key recommendation on higher education – that tuition fees should be lowered to £7,500.

Meanwhile, the government’s Skills for Jobs White Paper, also published on 21 January, offers a few further details on the lifelong skills guarantee previously announced by the prime minister. A lifelong loan entitlement “will be useable for modules at higher technical and degree levels (levels 4 to 6) regardless of whether they are provided in colleges or universities, as well as for full years of study”, says the White Paper.

And in a letter from the education secretary, Gavin Williamson, to the Office for Students, the government has said that performing arts, creative arts, media studies and archaeology should see their previous high-cost subject funding cut by 50 per cent and potentially removed entirely, while London weighting funding for institutions and students should be scrapped.

The Augar review, set up by Theresa May as prime minister in October 2017 before reporting in May 2019, became a vehicle for the government to achieve a “rebalancing” away from higher education to further education.

The key paragraph in the government’s Augar response says: “The government’s focus on the response to the coronavirus pandemic means that now is not the right time to conclude the review in full.

“However, we remain committed to introducing further reforms that will ensure a just and financially sustainable student finance system, drive up the quality of higher education provision and promote accessibility for students.

“This will include consideration of elements mentioned in the Augar report, including student finance terms and conditions, minimum entry requirements to higher education institutions, the treatment of foundation years and other matters. We plan to consult on further reforms to the higher education system in spring 2021, before setting out a full response to the report and final conclusion to the review of post-18 education and funding alongside the next comprehensive spending review.”

The Augar review floated the idea of capping student numbers in universities by restricting access to student loans via a tariff threshold. Under such a proposal, students would need to exceed a minimum bar on A level, BTEC or equivalent qualifications to secure loan funding to study at a higher education institution.

Treasury concern about the rising costs of the system appears to have brought that idea back on to the agenda, while it has also been advanced by some worried about the funding of “low value” provision in universities.

The government response also says: “It is important that the student finance funding systems remain sustainable and that those who benefit from their higher education should make a fair contribution. We intend to freeze the maximum tuition fee cap to deliver better value for students and to keep the cost of higher education under control. This will initially be for one year and further changes to the student finance system will be considered ahead of the next comprehensive spending review.”

Julia Buckingham, president of Universities UK, said enforcing minimum entry requirements “would be a regressive move, preventing students from disadvantaged backgrounds whose prior educational experiences have adversely affected their grades from attending university and ignoring the evidence that many of these students excel at university”.

“A university degree remains a good choice for many, and a growing number of jobs in business and public services require graduate-level skills; the economy and society cannot afford a reduction in the number of graduates,” said Professor Buckingham, vice-chancellor of Brunel University London.

Professor Buckingham said it was “encouraging to see the government’s commitment to making lifelong learning opportunities more accessible to all” but argued that maintaining funding for foundation years was “essential in supporting disadvantaged students”.

Jo Grady, general secretary of the University and College Union, said the Westminster government was “wasting an opportunity to make a real difference for students and institutions”.

“We need a different approach to HE funding that provides long-term security, doesn’t leave institutions exposed to major market shocks and puts the interests of students and staff first…It’s not good enough to kick the issue into the long grass until the…spending review,” she said.

On changes to the teaching grant in 2021-22, Mr Williamson’s letter to the OfS says: “The OfS should reprioritise funding towards the provision of high-cost, high-value subjects that support the NHS and wider healthcare policy, high-cost STEM subjects and/or specific labour market needs.”

That means a reduction of 50 per cent in funding for price group C1 subjects – performing arts, creative arts, media studies and archaeology – the letter explains.

“We would then potentially seek further reductions in future years,” it adds.

“The OfS should remove weightings for London providers from across the T-Grant, including the students attending courses in London supplement, and weightings within the student premiums” to invest in “other priorities such as high-cost subject funding, which is offered to providers in all regions of England, supporting the levelling-up agenda”, the letter continues.

Other grant changes include £5 million funding for institutions to provide additional support for student hardship in the pandemic and an increase in funding for specialist providers, “particularly those who are world leading and specialise in the performing and creative arts”, of between £10 million and £53 million.

The small amount of remaining capital funding for teaching will in future be delivered “through a strategically targeted bidding process”.

“The OfS should target funds at specific projects and activities aligned with the high-quality, skills-based education agenda,” Mr Williamson’s letter says.

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