Student loans: godsend for rich

September 7, 2001

The Labour government has got almost everything wrong in the changes it has made to higher education and failed to put right the previous government's mistakes, according to one of the government's most experienced policy analysts.

Fees, maintenance loans, Scottish policy and centralisation of controls have not improved the efficiency or equity of the sector.

Howard Glennerster, professor of social administration at the London School of Economics' Centre for Analysis of Social Exclusion, presented his analysis of the Labour government's achievements in education since election in 1997 at the British Association's Annual Festival in Glasgow on Tuesday.

He praised much of the work with schools but argued: "The very things they got right about schools they got wrong with higher education."

Professor Glennerster said economists had been advocating student loans since 1962. He agreed with the Dearing committee's recommendation that graduates make a 25 per cent contribution once they were working.

But he said the implementation was "misconceived and only raised a tiny amount of cash".

Maintenance loans were too low for students in high-cost areas and the nil interest rate increased the public spend and offered rich parents an interest-free loan.

Introducing fees went back on the principle that undergraduate education was free at the point of use, making it unpopular and forcing the government to set a low-fee level to be applied in full only to a minority.

The £1,000 flat rate meant institutions could not reflect different teaching costs or compete on quality or cost, he said.

The Scottish scheme was more sensible, but a repayment threshold double that in England meant even less relief to public spending, Professor Glennerster said. He argued that increase of centralised quality control concerned with process and not outcome gave no incentives to good teaching institutions compared with bad ones.

Professor Glennerster said the government's target of 50 per cent participation would be difficult to meet. He pointed out that participation in post-school education had been static since 1993.

He gave the government marks for "trying to do things of which economists would approve". But he said marks should be taken off for the "number and complexity of these initiatives". He counted 36 education policy initiatives between 1997 and 2000.


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