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How should we judge the Augar proposals when they appear?

  • 18 March 2019

HEPI is not a lobby group nor a mission group but an independent charity. We do not, generally, respond to official consultations. But we make rare exceptions to this rule.

So we responded to:

We also made an exception for the Review of Post-18 Education and Funding, colloquially known as the Augar review.

As the Augar review comes to a close, it seems a good moment to revisit, in a brief way, the 10 points we made in our response. These set the framework for how we – and many others – are likely to judge the review’s final recommendations.

The most important two points in the list below – on part-time funding and student numbers – are the first and last.

  1. Better support for part-time learners: The bit of the higher education sector that works least well, relative to the original expectations when the current funding system was put in place, is support for part-time learners. The number of part-time students has more than halved in recent years. In our response, we noted the different characteristics of part-time students as well as the strong case for reinvigorating direct public funding and for doing more to encourage flexible part-time study.
  2. A rejection of differential fees: There has been some speculation that the Augar review could recommend the introduction of differential tuition fees – possibly different fees for different subjects. Since our response, we have published a detailed paper on how means-tested tuition fees work in other countries. But while they can be made to work, our original response to the review noted the many reasons why differential fees are problematic, which remain true. These include: neither institutions nor students have backed the idea; there is no consensus in favour of any specific model of differential fees even among those who have called for greater price differentiation; differential fees can be difficult to administer as well as at risk of excessive political interference.
  3. The reintroduction of maintenance grants: New Labour’s abolition of maintenance grants in the late 1990s was deemed an error that was reversed in 2004. Even though the latest abolition of grants, implemented in 2016, has not produced a steep fall in applications, it continues to be exceedingly hard to find any good reasons why the poorest students should emerge with the biggest debts. Moreover, the recent announcement on reclassifying student loans in the public spending figures (arguably) means grants can be reintroduced at a lower cost in terms of the public finances than previously thought.
  4. Ensuring a fair mixed funding model, including defensible interest and repayment terms: Our response included evidence showing most students support a mixed funding model, whereby graduates and the generality of taxpayers share the costs of higher education, but that most students also believe they should not have to pay more than half of the total sum. We also noted the increase in the repayment threshold from £21,000 to £25,000 extends the period of student loan repayment for some graduates and increases the amount that will never be repaid, all at considerable cost using resources that might have been better spent on other interventions. In addition, we noted the strong calls for a reconsideration of the interest rate applied to student loans (3% above RPI during study and up to 3% above RPI after study, depending on income) as well as the general opacity of such features. However, we noted that many proposed reforms would be expensive and regressive, helping better off graduates most, and we recommended considering cheaper options alongside ideas like abolishing the real interest rate – such as discontinuing the practice of applying a real interest rate to loans during the period of study but retaining it for those in the labour market or shifting from the discredited RPI measure of inflation to a better one (such as CPI).
  5. Improving the transparency of tuition fees: Students do not generally know where their fees go and, according to four successive waves of the annual HEPI / Advance HE Student Academic Experience Survey, three-quarters of them would like more information on this. Our response supported this call because a poor understanding of the finances of higher education institutions inevitably leads to less good quality discussion about future policy options. Since responding to the Augar review, we have published a report Where do fees really go? Following the pound, which includes practical examples of how institutions can show where they spend their fees, to the benefit of students, policymakers and the media.
  6. Improving understanding among applicants: Research published in 2017 by HEPI and Unite Students proves younger people show considerable misunderstanding about higher education, including among sixth-formers who are destined to attend. The issues on which there is a lack of understanding include the academic life of students, the cost of living for students and how institutions are likely to respond to instances of mental ill-health among students. We argued that such poor understanding could only be fixed through a concerted and collective effort from schools, universities and government about what higher education is like and how it differs to other forms of education. The Government’s recent statements on improving transitions to higher education are therefore welcome.
  7. Delivering effective outreach: Our response to the call for evidence from the Post-18 Review noted that, despite recent progress, there continue to be huge differences in the higher education participation rates of people from different parts of society. We noted that, in this context, the continued high spending on bursaries rather than other interventions with better returns seems unjustified. Since then, the Office for Students have announced that it will no longer expect institutions to spend a specific proportion of their higher fee income on access but also that it is looking for faster progress. Moreover, we have published – in conjunction with the mentoring charity Brightside – a manifesto with 35 ideas for making faster progress on both fair access to the most selective institutions and widening participation overall. Less well-funded universities or back-door minimum entry standards, like minimum A-Level grades for new students, are likely to mean progress stalls or we go backwards on improving access to higher education.
  8. Ensuring that changes to the accounting treatment of student loans do not lead to perverse policy decisions: Our response noted the expected impending decision to account for student loans in a different way, so that the portion of student loans that is expected to remain unpaid would start to count as current public spending. This change has since been confirmed. It is right that politicians follow the rules set by the accounting sector. But it is also important to note that the decision to put a flakey estimate of the cost of future unpaid loans in the public spending figures is not being counterbalanced by figures for the extra tax revenues or additional economic growth that could occur as a result of educating more people to a higher level. It would be a tragedy if an accounting change led policymakers to undervalue the advantages of having a higher proportion of the workforce educated to a higher level.
  9. Improving Level 4 and Level 5 provision: Our response noted the supply of technician-level skills, such as sub-degree Level 4 and 5 provision, has declined sharply in recent years, hampering the UK. The shortage of such skills is a distinctive difference between the UK and many of our competitors and could be an even bigger challenge if Brexit were to mean fewer skilled migrants from abroad. We have since published further work on this issue. Rumours of a ban on higher education institutions delivering standalone Level 4 and Level 5 qualifications are concerning, when a better alternative is likely to be a more integrated tertiary sector rather than a more divided or segregated one.
  10. Avoiding new student number controls: History shows the best way to ensure under-represented groups have a better chance of entering higher education is to have more places. The alternative is a zero-sum game that those with the sharpest elbows will always tend to win. Experience abroad also shows reductions in high tuition fees tend to be combined with tighter control over student numbers. Re-imposing student number caps would seem particularly unwise at the moment, given the coming big increase in the number of 18-year olds.

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