Examination of Witnesses (Questions 300-319)
WEDNESDAY 26 FEBRUARY 2003
MS MANDY
TELFORD, MR
CHRIS WEAVERS,
DR SOFIJA
OPACIC AND
MS LINDSEY
FIDLER
300. So the whole of the £3,000 would be
paid back at some point?
(Ms Fidler) The Cubie model is recommended, for a
set amount to be repaid by graduates after graduation.
301. For all of them?
(Ms Fidler) For all of them, but not differentiated.
302. Whatever the tuition fee, they would pay
the whole of it, whereas the proposal from the Government is not
they would not, at the moment?
(Ms Fidler) At the moment the Government is offering
means-tested support for some of the possible fee.
303. We are assuming at the level it currently
is, which is that 40% do not pay any tuition fee, and that an
additional percentage do not pay the full amount.
(Ms Telford) We would also like to see that money
paid back being ring-fenced and put back into the student support
system.
304. We are clear on that then. The next thing
I wanted to ask about was the student loan debt. One of the things
that we discussed when we did our previous inquiry was that one
of the problems that students have is that the student loan is
not sufficient to meet living costs. Therefore, a number of students
get into credit card loan debt and use that for whatever things
they need in order to live. Subsequently there is a habit, I understand,
of banks and the like saying to graduates "You have got all
these different loans; here's your credit card loan, here's your
student loan, roll it all into one at one rate and pay it back",
so they end up paying back more money at higher interest rates.
Would you like an increased student loan in order to do that?
If so, would you be prepared for there to be a slightly higher
rate of interest on it in order to pay for that, rather than having
the huge amount of credit card loan which a number of students
end up with?
(Ms Telford) We would like the Government to recognise
the real cost of living throughout the country. Especially in
London and the South East, the amount students get is nowhere
near what they need. We would like to see that made up of a mixture
of student loans and grants and be paid back, again, after graduation,
once they are earning sufficiently. We still would not support
any increase on the interest rate of student loan simply because
it would just hurt the poorest graduates the most.
305. So you want to increase Val's billion and
not pay any of that back?
(Mr Weavers) I believe there is an acceptance on the
part of the Government at the moment that included within the
Paper was a provision for reassessing the level of loan support,
and amongst the evidence they are going to look at to reassess
that was the information collected by the NUS annually. I believe,
from what was mentioned just now in terms of the £1 billion
figure, the £1 billion figure is the projected amount under
the new system rather than the current levels, so it would constitute
that billion under the proposed new system. It is adding to the
current level which is significantly below that at the moment.
306. I am not going to argue about the exact
figures, but the point is that you want more money, which would
help because it is at a lower rate of interest, but you do not
recognise that in order to do that it might be necessary for there
to be some interest rate on the student loan; the alternative
possibly being staying as we are and students paying higher rates
of interest for credit card debt.
(Ms Fidler) NUS say that if student loans were to
be means-tested on the student's own income and for the whole
of that loan to be means-tested, then it may be that students
would get more support through that loan, but it would not be
a commercial debt it would be the student loan debt. We would
like to see more student loan available to more students. We just
do not accept that a higher interest rate is appropriate as a
form of government support to support students in higher education,
because of the reasons Mandy gave.
Chairman: Champagne corks are going to
be popping all over suburbia.
Jonathan Shaw
307. Do you agree that debt by its nature is
cyclical? Students accrue debt at different parts of the year
than other parts. If so, do you think students should be given
the opportunity to have their loans paid to them on a monthly
basis rather than all upfront? If you take the notion that in
our society we provide those people with the least income—i.e.
Income Support—with their money on a weekly basis in order
to assist people to manage their income, students obviously have
a low income and, also, are those people who are likely to be
the least experienced at handling their personal finances. Is
that something you would welcome? I would not say that everyone
has got to do it, but a choice.
(Mr Weavers) Not only is there a cyclical nature but,
increasingly, it is easier on a monthly basis as institutions
and other organisations that students have to make payments to
become more flexible. For example hall fees, in many institutions,
are now payable on a weekly or monthly basis to make it more manageable.
We are certainly working with the student loan company at the
moment to introduce a lot more flexibility into the loan system.
Certainly that is on a rolling basis, as I understand it. They
are looking for a greater degree of flexibility this year, whereby
it will be able to be differentiated on an institutional basis
but, in the long term I think there is an aspiration both on our
parts and, indeed, on the student loan company to make it as flexible
as possible so that individual students will be able to choose
when and how they wanted their payments made. Certainly that would
be a very positive step forward in the management of that money
and, also, in allowing students to better manage their finances.
308. Whilst we accept the 18 principle, I think
it would be popular amongst parents.
(Mr Weavers) Almost certainly it will be because there
is always a minority of young people each year who have had no
experience of managing—while on the grand scale of things
not enormous amounts of money—more significant amounts of
money than they have ever had to deal with in the past.
309. They blow the lot.
(Mr Weavers) Yes. Sometimes, in a stereo-typical way,
in the first couple of weeks but, also, managing large sums of
money over a period of 12 months is very difficult, having just
left home. Anything that can be done to help that process would
certainly be positive.
(Ms Fidler) We would also like to see more budget
management sessions within the induction period and on-going within
institutions. Anecdotally from our welfare services, there are
a number of problems, not just around students blowing their money,
as you put it, but also mature students or lone parents, for example,
that are coming off weekly or fortnightly benefit and then trying
to manage family finances through funding they get once every
three months. I think we would all find it difficult to budget
if we got our salaries every three months. So there are issues
around ensuring that students are aware exactly how much money
they have to budget on throughout their academic year, and how
that income might fluctuate. Also, the on-going skills and support
that students will need there. We feel there needs to be a core
role, really, for budget management sessions at the beginning
of each academic year.
310. So might an attractive package be for access,
monthly payments or maybe a shorter period of time, and then the
increase in support that we are going to come on to talk about
in terms of the postcode premium and then, taking the payment
of fees, post-end and putting those into maintenance grants? Those
three things together but the same pot of money. Do you think
that is a better package than they have got at the moment?
(Ms Fidler) We do accept back-end, post-end, payments
and an increased maintenance grant, yes, along with increased
resources to widen participation.
Mr Jackson
311. I want to ask what is, really, a philosophical
question. Why do you think it is a good thing that 18-year-olds
should be independent?
(Ms Telford) Essentially, in any other part of society—in
many parts it is 16—you are an adult, you can legally do
everything and the majority of them are leaving home. It just
makes sense at 18 for them to become adults.
312. Do you think it is good for them to be
independent?
(Ms Telford) Yes.
313. Would you apply the analogy to the case
of universities? Do you not think there is actually a case for
universities to be independent of state funding?
(Ms Telford) I do not think I can apply 18-year-olds
to universities at all. If universities were to become independent
of state funding then we would just see the system that we have
in America, where we know that Imperial wants to charge £15,000,
and it would not stop there.
314. You seem to assume there are some benefits,
which seem to be moral benefits, for young people to be treated
as independent adults. You do not think there is any analogy at
all to institutions and whether institutions do not morally benefit
from being more independent of the state. Do you think it is right
that universities should be dependent on state funding and on
the state as institutions? Do you think it is morally good for
them?
(Mr Weavers) I think it is morally good for society.
We have to recognise that as well as universities being self-serving
organisations that have a benefit maybe to the business community,
they also have a benefit to society in the forms of the income
generation and societal development within certain regions; the
benefit of the education of students to become professionals in
a whole variety of careers including the public sector, and the
benefits to the research that takes place in higher education
for society. There is a very important role of the Government
in directing the way those resources are applied there for society's
good. It is right and proper that there should be.
315. So you think universities should be treated
as instrumental means to ends, whereas there is no analogy with
people who should be treated as ends in themselves?
(Mr Weavers) The balance of finances in the university
recognises that there is money from the Government at the moment,
there are contributions directly from students and there are contributions
from business and other organisations through the research activities,
plus the substantial amounts of property that some universities
own also generates a form of income, and endowments. There is
a comfortable mix there, from the point of view of some universities.
Moves to cut the link between government and the higher education
sector, we believe, would substantially damage the role of higher
education in society but would not necessarily benefit the other
roles the higher education sector plays in this country
Mr Jackson: I will not pursue the point,
but it does seem to me that something we ought to bear in mind
in all these discussions is that universities grew up in the Western
World as voluntary institutions, and that that has, I think, had
a great deal to do with their success as institutions; the advancement
of knowledge and the transmission of knowledge. It worries me
that they should be regarded entirely as institutions designed
to serve the purposes of students, the purposes of business, or
whatever. There is a sense in which they should be regard as institutions
which deserve to be treated as independent autonomous institutions.
Mr Chaytor
316. If we can move on to questions of access.
You have supported the 50% target, but in your submission you
draw the distinction between increasing and widening access. Can
you clarify what you mean by that?
(Ms Telford) I think it is important that access is
widened to all in society. There is no point in increasing the
numbers of students from 18 to 30 by 50% if they come from the
same social classes of those who have already, historically and
traditionally, have gone to university. I think what the widening
access agenda must do is, in a sense, widen it out to those who,
at the moment, have not got the chance or have never even thought
of going to university.
317. Should there be a target specifically for
widening access?
(Ms Telford) Yes.
318. What kind of target should there be?
(Ms Telford) We understood the target to be 50% to
widen access.
319. But 50% of what? At the moment the target
is 50% of 18 to 30-year-olds, which is increasing access. You
are arguing there should be a widening access target. What could
that be?
(Ms Telford) Fifty per cent of 18 to 30-year-olds
going to university, we think, should be the widening access;
it should not just be those students—
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