A ‘million plus’ challenges for Higher Education

Education Policy Lunchbox this afternoon hosted Pam Tatlow, Chief Exectutive of ‘Million+‘, a university think tank. During a wide-ranging discussion, Pam outlined the recent activities of Million+ and touched upon the challenges which lie ahead for higher education into the future. Million+ is concerned particularly with the ‘post-1992’ group of universities, often called ‘new’ or ‘modern’ universities (former polytechnics which were granted university status at this time).

The most interesting aspect of discussion concerned undergraduate tuition fees. Figures outlined by Pam, from the independent Office for Budget Responsibility (established by the Government), show that under Government plans to raise tuition fees from the 2012/13 academic year, Government will need to borrow £13 billion more by 2015/16 than it does at present in order to fund universities and students. At present, 15% of students will have their loans written off after 25 years (under the post-2006 student loans system) – the maximum amount of time available to pay the loans, after which they are cancelled by the state. This is projected to cost taxpayers 27p in the pound in the future. The Department for Business, Innovation and Skills has estimated the average charge for university courses as £7,500 from 2012/13. Taking this figure, Million+ estimates that 35% of graduates will not repay their loans after 30 years (under the new system students have longer to pay this back). This will cost the taxpayer 31p in the pound. If modelling is based on fees being charged at the maximum rate of £9,000 per annum, Million+ estimate that 55% of students will not repay their loans after 30 years, costing taxpayers 41p in every pound into the future.

Million+ produced a document in late 2010, modelling whether a graduate tax would work as a means to fund higher education, and considering whether such a tax would be more or less ‘progressive’ than the Government’s plans to raise the cap on tuition fees to a maximum of £9,000. The think tank found that a graduate tax of 2% on graduate earnings over £15,000, for a period of 20-25 years would be sufficient to fund universities at a sustainable level. Pam Tatlow was of the view that this tax was more progressive, as the more students earned, the more they would pay, reflecting the true market-value of their qualification, not what a university deems it is worth and can charge to cover their own costs.

The Government is due to release a Higher Education White Paper in late February or early-March, which will make clearer the motivation behind the increase in fees – given that analysis suggests that this model will in fact cost the Treasury more than alternative proposals. Pam suggested that market-creation, opening up higher education to private providers, could be a major impetus, as was increasing students’ control of their own education, as consumers, and that further information could be provided within the Paper. The British Ecological Society will be responding to this when released.

Education Policy Lunchbox is a series of monthly seminars organised by the British Ecological Society, the Biochemical Society and the Society for Experimental Biology. The network was created as a spin-off from Policy Lunchbox, a BES – Biochemical Society partnership which focuses on issues in science policy.