State-backed master’s loans: is an ‘own goal’ looming?

Sector figures say postgraduate funding plan for England could fuel inflation in tuition fees as well as credentials

May 7, 2015

Source: Rex

Didn’t see it coming: an end to postgraduate certificates might be on the cards

Academics have expressed concern that a government-backed master’s loan scheme could lead to fee inflation and unintended changes to other postgraduate qualifications.

The number of integrated master’s offered by institutions could increase, for example, as students try to avoid huge repayments on undergraduate and postgraduate debt that must be repaid concurrently.

It could also be the death of postgraduate certificates and diplomas, a conference has heard.

In the Autumn Statement, chancellor George Osborne announced a system that will offer loans of up to £10,000 to postgraduates under the age of 30.

At an event held by the Society for Research into Higher Education, Paul Wakeling, a senior lecturer in the department of education at the University of York, and Tony Strike, director of strategy, planning and change at the University of Sheffield, outlined some potential consequences of the scheme, which will be introduced in 2016-17.

Dr Wakeling said that after years with no public funding for postgraduate study, he felt more positive than negative about the scheme, but he expressed concern that it could lead to higher fees and “credential inflation”.

“We know that the cost [to teach] a postgraduate programme…is about £10,000 for most subjects,” he said, adding that the median fee rate is “quite a bit lower than that”. “One of the things that will happen is that the fees will go up,” he said at the event on 24 April.

When the cap on undergraduate fees was lifted to £9,000, universities “shot to the top”, he added.

Another consequence could be that a master’s becomes a “de rigueur” qualification, he said. “[So] you have got to do it to get the type of job that you used to be able to get with an undergraduate degree, so it feeds credential inflation,” he said.

“Having people with more postgraduate qualifications is probably a good thing for society, but that [loans]…may have these unintended consequences is regrettable,” he added.

Meanwhile, Dr Strike suggested that institutions could change their postgraduate offerings as a result of the policy. “We will see the death of postgraduate certificates and diplomas as footholds in postgraduate study,” he said.

He added that it was likely that universities would launch a “whole host” of integrated master’s in what he said would be a “complete own goal in terms of unintended consequences”.

By taking a master’s year as part of an undergraduate course, students could avoid having to take out a second loan. Under the current proposals, which are now subject to consultation, undergraduate and postgraduate loans must be paid back at the same time, making the repayment rate 18 per cent on earnings over £21,000. Extending an undergraduate loan to cover an integrated master’s year would reduce this to just 9 per cent.

An increase in these courses would be “completely counter” to Europe’s Bologna Process aim of standardising the study required at different degree levels, he warned.

Dr Strike also added that evidence suggested that those from disadvantaged backgrounds, who are typically unable to self-fund a master’s, are more “debt averse” and may not take up the loans.

He added that this phenomenon is well known at undergraduate level and is why the Office for Fair Access and undergraduate financial support schemes exist.

Cross-border blowback: devolved academies fear enrolment losses from England-only loans

Universities in devolved parts of the UK are afraid that they will experience a substantial drop in enrolment as a result of planned loans for master’s courses being available to students at English institutions only.

The loans of up to £10,000 a year would be available to English-domiciled or European Union students, but only for programmes at English universities, since higher education is a devolved matter.

A separate proposal for loans for postgraduate research study will consider whether the funding should be “portable” for study in other areas of the UK.

Colin Riordan, the vice-chancellor of Cardiff University, said that the policy on master’s loans would deter English postgraduates from studying in Wales.

“As the only Russell Group university in Wales, we attract a large number of students from across the border, for both postgraduate taught and postgraduate research programmes,” Professor Riordan said.

“If they were able to access loans that were available only at English universities, that would be bound to affect us negatively.”

According to Higher Education Statistics Agency data, English students represented 17 per cent of all postgraduates in Wales in 2013-14, compared with 13.4 per cent in Scotland and 8.1 per cent in Northern Ireland.

Alastair Sim, the director of Universities Scotland, said that the loans should not be allowed to diminish the “high demand” among English students for postgraduate courses north of the border.

“Encouraging cross-border student flows is important to universities and learners because they allow any UK student to access specialist knowledge and skills concentrated in one part of the UK, and they enrich the learning experience for all students,” Mr Sim said.

Professor Riordan said he was hopeful that measures to mitigate the impact on universities would be introduced by Welsh ministers.

The Holyrood government already offers loans to some Scottish-domiciled postgraduates, which can be used to enrol at English universities only in a limited number of cases, such as when a programme is not available in Scotland.

Chris Havergal

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