Last week the Higher Education Commission published a report setting out 16 recommendations following their inquiry into future risks to the financial sustainability of the sector. The Commission aimed to identify what is needed for ‘a thriving, buzzing centre of knowledge for England and the rest of the UK; building and expanding, producing valuable outputs, as well as receiving public investments’.
Our higher education sector plays a vital role in Britain – contributing huge amounts to our economic and societal well-being. It helps our businesses and organisations to compete in a dynamic and fast-changing world. At University Alliance we talk about our members being locally rooted and globally connected. This will become increasingly important. Alliance universities’ approach in particular has made them leaders in generating the industry links, job-ready graduates and a research-rich, entrepreneurial environment required to succeed – to drive innovation and growth and promote a flourishing society.
But as the Commission (which officially launches their report today) points out, the financial sustainability of our higher education sector – and everything it works and stands for – is under threat as a result of the limitations of the current student loan student and the public subsidy on those loans.
At present the student loan system focuses mainly on young undergraduates studying their first degree. This excludes a large proportion of people who could improve their career prospects by undertaking postgraduate courses or studying part-time. Businesses, schools, hospitals and more are all losing out from the vast potential for these people to become better qualified, to retrain in a different career and acquire high-level skills for the changing global economy. We have all seen how postgraduate and part-time numbers have plummeted since the £9000 fees were introduced in 2012. This is a great concern for the higher education sector
There is of course a strong case for public investment in higher education – it delivers a tremendous return on investment and plays a vital role in developing and growing global talent. This is key to the future success of the UK. But it is totally unsustainable that for every £1 given out in student loans, only 55p will ever get paid back. It’s a public spending black hole that desperately needs plugging especially with the imminent lifting of the student numbers cap in 2015-2016. While removing this cap is a great move towards creating opportunities for more people to access higher education, it will place even greater pressure on the higher education funding system.
These potential threats inspired University Alliance to develop an alternative to ensure smarter, sustainable funding for UK higher education and ensure strategic investment and preventing cuts to student places or underinvestment in high quality programmes.
Our higher education loan programme (HELP) proposal offers a possible solution to sustainable funding – a lifetime loan allocation so people can go back to study and retrain throughout their lives.
More importantly, it delivers a real financial solution for postgraduates who currently cannot access student loans. They are a vital pipeline to secure the future of our world-leading research base and to encourage the transfer of knowledge into innovation that helps our economy and society to thrive. We should be making it easier for them to continue their studies and expand their skills, to be our next generation of world-class researchers, scientists and engineers.
We agree with the Commission there is no silver bullet to solve the problems that the higher education system faces. But a smarter loan design like our HELP proposal would tackle two of those pressing issues: universal access for the first time to a life-time loan to sort out the postgraduate funding vacuum and major decline in part-time study and a more sustainable funding system where more loans are repaid, avoiding the likelihood of more than £330 billion being written off by 2044 as the Government estimates.