Disadvantaged students in England could receive grants worth £3,000 a year to encourage them to remain in education after leaving school, according to proposals from a government-commissioned report backed by Theresa May.
The report into post-age 18 education and funding would, if accepted by a future government, see a shift in funding from universities to further education (FE) and vocational training. Universities would lose income for “low value” courses while their graduates would be making higher student loan repayments until the brink of their retirement.
At the launch of the report, May is to say: “My view is very clear: removing maintenance grants from the least well-off students has not worked, and I believe it is time to bring them back.”
May’s remarks are an admission that the decision by David Cameron to scrap student maintenance grants in 2015 was a mistake, with the then chancellor George Osborne calling the support for students from poor backgrounds “unaffordable”.
The report, headed by Philip Augar, was commissioned by May to look at high student debt and tuition fees following a pledge she gave to the Conservative party conference in 2017. But the report’s publication was delayed multiple times, overshadowed by the Brexit negotiations and technical issues.
Among the report’s proposals are:
• cutting undergraduate tuition fees to £7,500
• extending student loan repayments from 30 to 40 years
• a single, lifelong learning loan allowance for all adults
• maintenance loans for students taking sub-degree qualifications
• rebranding student loans as “student contributions”
• funding boost for FE colleges and vocational training
Angela Rayner, Labour’s shadow education secretary, said: “The report alone does nothing to address the burning injustices facing our education system.
“With no formal government response, no extra funding and no guarantee that the recommendations will be implemented by her successor, the Augar review epitomises May’s legacy as prime minister and this shambolic Tory government; all talk, empty promises and very little action.”
Shakira Martin, president of the National Union of Students (NUS), said: “This announcement is too little too late, given that Theresa May’s legacy in higher education will always be the deportation of thousands of our international student friends and colleagues.”
The report calls for greater government intervention in the funding and types of courses offered by universities, while its proposal for undergraduate tuition fees in England to be cut from £9,250 to £7,500 a year would likely mean reduced income for humanities and social science departments.
The panel declared that “some students are charged too much for their degrees and the substantial taxpayer subsidy could be better directed …. to courses which cost more to deliver and offer better value to students and taxpayers.”
The report also recommended that the government could impose number controls and a minimum entry threshold for degree courses with poor student retention and graduate employment records.
University leaders were quick to push back against the funding proposals, with some fearing that it would also affect universities in Scotland and Wales.
“On the face of it, the fee-level recommendations may look good for students, but unless the government gives a cast-iron guarantee on full replacement funding, it could prove to be a wolf in sheep’s clothing,” said Alistair Jarvis, chief executive of the Universities UK lobby group.
“Cutting fees without replacement funding would be a political choice which hurts students, limits opportunity, damages universities, decreases the number of highly-skilled employees that business needs, and reduces our international competitiveness at a time when modern Britain needs it most.”
While students would leave university with lower overall debt, the proposals would see graduates making higher total repayments for longer than under the current structure, with the student loan period being extended from 30 to 40 years and coupled with a lower starting threshold for repayments.
The extended repayment period would see most graduates paying off their student loans until they reached their 60s, rather than having the remainder of their student debt wiped in their early 50s as now.
There was surprise that the panel made few recommendations on changes to the high rates of interest charged on student loans.
Andrew McGettigan, an independent expert who specialises in the student finance system, said: “The government would do well to ignore this and lower interest rates to inflation only – it’s the key contributor to misunderstandings over the student loan system.”
But the big winners under the report would be the further education and vocational training sectors, which would see additional funding of around £3bn a year and a one-off £1bn capital funding boost for a national network of FE colleges.
Damian Hinds, the education secretary for England, said: “This report acknowledges fully the key truth that our further education colleges also play a vital role in performing these functions.
“Too often we have had in our country a bias towards higher education, but we need to recognise equally the opportunities in both.”
Describing further education as “the Cinderella sector,” Augar said: “Our work revealed that post-18 education in England is a story of both care and neglect, depending on whether students are amongst the 50% of young people who participate in higher education or the rest.
“The panel believes that this disparity simply has to be addressed. Doing so is a matter of fairness and equity and is likely to bring considerable social and economic benefits to individuals, employers and the country at large.”
Chris Husbands, the vice-chancellor of Sheffield Hallam University, welcomed the encouragement for part-time and flexible study but said he feared that much of it would not survive the current political instability.
“My big worry is that this report is going to get cherry-picked by politicians and we will end up with something that doesn’t work,” Husbands said.
