Memorandum submitted by The National Union
of Students (NUS)
1. INTRODUCTION
1.1 NUS is a voluntary membership organisation
comprising of a confederation of local student representative
organisations in colleges and universities throughout the United
Kingdom which have chosen to affiliate. The organisation has nearly
750 constituent members (CMs)—virtually every college and
university in the country.
1.2 NUS is one of the largest student organisations
in the world and provides research, representation, training and
expert advice for individual students and students' unions.
1.3 NUS welcomes the opportunity to contribute
to the Education and Skills Select Committee inquiry into the
future sustainability of higher education. The organisation has
chosen to focus on those questions, within the purposes, funding
and structure of higher education, which are most pertinent for
students in the UK.
UNIVERSITY FUNDING
2. Should the cap be raised?
2.1 The National Union of Students (NUS)
has long supported the principle that education is a public service
and that free education is a route to tackling inequality, poverty
and differential access to education opportunities and life chances.
2.2 With the introduction of variable fees
the debate on how education should be funded has moved on. It
is too early at this stage for ourselves or the DfES to come to
any definite conclusions about the system, which will of course
be reviewed in 2009.
2.3 In this paper we will set our concerns.
Many of our arguments remain the same, although our fears over
several of the emerging aspects of marketisation will also be
discussed. We have also consulted with our member students' unions
and their thoughts are incorporated in the response.
2.4 NUS believes students should not pay
for their education through tuition fees, either paid up front
or after graduation, and so as a result opposes the idea of raising
the present cap on tuition fees. Indeed, NUS argues that education
should be free at tertiary level, and that tuition fees should
be scrapped.
3. What would be the consequences of lifting
the cap?
3.1 Were the cap to be lifted, NUS believes
the consequences for students, for higher education and for society
in general would be grave. Student debt is already at unprecedented
levels and continues to rise. Not only is it manifestly unfair
to expect students to accumulate such debt—particularly
as debt continues to hit the poorest and most vulnerable students
hardest—it also has detrimental effects on wider society.
4. Debt is increasing
4.1 The exact level of graduate debt is
disputed. Surveys by banks and other financial institutions usually
place the graduate debt figure well above the figures provided
through official government reports, but all show a general trend
since the 1990s towards ever-higher levels of graduate debt at
a pace that far exceeds the rate of inflation.
4.2 For example, the Barclays Bank Graduate
Debt Survey showed that in 1994, the average graduate debt was
£2,212. By 2005, this had increased to £13,501.[2]
4.3 Even the most conservative estimates
of anticipated average graduate debt such as those recorded in
the DfES' Student Income and Expenditure Surveys show that debt
is surging. Debt levels in those surveys rose from £3,465
in 1998-99 to £7,900 in 2004-05—an increase of 127%.[3]
4.4 Whichever figure is correct, the increase
in tuition fees and introduction of the loans to pay for them,
coupled with the increase in loans for living costs means that
this figure will almost certainly continue to rise. The former
Education Secretary Charles Clarke estimated that students who
attend universities that charge the full top-up fees will graduate
with debts of £21,000.[4]
4.5 For some students, particularly those
on longer courses, debt can be even higher. According to research
by the British Medical Association (BMA), a fifth of medical students
owe more than £30,000 in their final year—and this
before top-up fees were introduced.[5]
4.6 Official figures confirm that such students
are burdened with higher debt: DfES research shows that medical
and dental students have the highest levels of debt of all full-time
students. In 2004-05 they anticipated having average graduate
debts of £12,946.[6]
For these students, therefore, increases in tuition fees will
have an even greater impact.
5. Debt affects the poorest disproportionately
5.1 Debt does not affect all of society
equally. Debt levels are, unsurprisingly, higher among those from
lower socio-economic backgrounds. The DfES' own research showed
that those students in the lowest groups predicted average debts
of £9,842 in 2004-05, compared to £7,733 among the middle
groups and £6,905 for those from the highest.[7]
5.2 As a consequence, many of these students
take up part-time work, either to reduce the amount of debt they
have to incur, or simply to make ends meet. Indeed, research from
Universities UK (UUK) shows that large proportions of students
are working, most of whom (83%) reporting that they do so to cover
basic essentials.[8]
5.3 In that survey, 30% of students said
they worked more than 20 hours a week,[9]
jeopardising the quality of their degree given that a student
working 16 hours per week has up to a 60% chance of getting a
poorer degree than a similar non-working student.[10]
5.4 This too affects poorest students the
most, as they are far more likely to have to work during term-time.
In a UNITE/Mori survey, 51% of C2DE students compared to 35% of
AB students reported they worked during term-time. They also worked
longer, on average 14.3 hours per week, compared to just 12.2
hours for AB students, and for less money £5.94 per hour
on average for C2DE students compared to £7.21 per hour for
AB students.
5.5 NUS welcomes the increase in maintenance
grants for the poorest students, and the requirement for universities
and colleges to provide bursaries to such students, but we remain
extremely concerned that much of this money is being used for
high-profile schemes which benefit richer students.
5.6 One such instance can be seen at the
University of Gloucestershire, which is offering a 20% discount
on their tuition fees where these are paid at the beginning of
a course, worth around £900 for students on courses charging
the full £3,000 fee.[11]
This is essentially a massive subsidy to the richest students,
being paid for by those who cannot afford to pay their fees upfront
and must take out loans.
5.7 Other schemes which offer large bursaries
to students with high A level marks without any reference to their
family income are similarly taking from the poor to, potentially,
give to the rich.
5.8 NUS believes the Office for Fair Access
(OFFA) should be required to prevent such misuses of money intended
for widening participation groups, and given the powers to enforce
this where necessary.
5.9 Debt also disproportionately affects
female students, due to the gender pay gap. Under the new system,
a female graduate with two children, earning £36,000 and
with a student loan debt of £26,000 will take 19 and half
years to pay back what she owes. A man on the same salary would
take 15 years.[12]
6. Debt is a deterrent
6.1 Research shows that reluctance to take
on huge debts is a prominent factor determining access to higher
education, particularly amongst those from poorer backgrounds.
For example, UUK Student Debt Project shows that the groups the
Government is trying to attract into HE are likely to be the most
debt averse and the most concerned about the costs of HE (ie low-income
groups, lone parents, students from certain minority ethnic groups).[13]
In this research, 84% of sixth formers and college students believed
student debt deterred entry into HE and 88% of those questioned
from the lower income groups believed that more people would go
to university if grants were available. These findings were repeated
in NUS" Funding the Future research.[14]
6.2 The 3.7% drop in UCAS applications for
2006 entry compared to 2005 confirms that, at the least, many
2005 entrants sought to avoid the enormous increase in fee levels,
and NUS believe this may be the start of a decline in applications
for future years.
6.3 The severity of the situation is in
part being masked by an increase in the absolute number of young
people in the wider population. The Higher Education Initial Participation
Rate (HEIPR), measuring participation by young people in HE, shows
a decline in participation of 0.3% in 2004-05 compared to the
figure in 2003-04, which in turn had been 1.1% lower than in 2002-03[15]—and
this before the introduction of top-up fees.
6.4 The number of 18-20-year-olds in the
wider population is forecast to increase by 11% between 2002-03
and 2010-11, and the Higher Education Policy Institute projects
that due to such increases in that age group and in others, 87,000
more students should enter the system. This may help to ensure
UCAS applications do not decline in absolute numbers, which will
be of some political comfort to those who advocate variable fees.
However, in order for the HEIPR to remain static or increase,
the number of applications must markedly increase, or else the
HEIPR will continue to drop, very likely at the expense of those
groups who are already underrepresented. NUS firmly believes that
an increase in fee levels would only have a yet more detrimental
effect.
6.5 Although the increase in non-repayable
support is welcome, and though NUS fully supports the Government's
target of increased participation in HE, its parallel policies
to increase tuition fees is wiping out the incentives to access.
7. The value of a degree is declining
7.1 There is evidence that this graduate
premium is in decline. Indeed, research by economists at the University
of Cardiff has shown that for some types of student on some types
of course (eg white, male students on arts courses) the graduate
premium may even be less than the cost of a degree, once fees
and living costs are included.[16]
7.2 NUS believes the benefits of higher
education are far more than merely financial, and graduates receive
a range of benefits beyond higher wages. However if the cap were
to be lifted, and this increase justified by reference to the
graduate premium, some prospective students may start to make
the judgement that the benefit of higher education will not in
fact outweigh the cost.
7.3 In any case, if university graduates
have higher wages then they should pay more in income tax and
National Insurance. And, if the taxation system is not as progressive
as it ought to be then this is where public policy should focus
rather than placing greater financial burdens on students and
graduates. Charging tuition fees in the first place, let alone
raising them, is merely a pernicious form of double taxation.
8. Student debt will make demographic problems
worse
8.1 A report on young people's finances
by Reform suggests that by 2012 young graduates will face a tax
burden of 48% due to the costs of higher education and compulsory
pension scheme payments.[17]
8.2 The generation which has introduced
tuition fees and top-up fees, and that is currently arguing to
lift the cap, is the generation which benefited from free higher
education, and will have contributed less proportionately to their
pension schemes, and found it easier to purchase a house and afford
to start a family.
8.3 This is clearly unfair and in part a
result of higher earners in that generation being regarded by
politicians as unwilling to pay higher taxes. The implications
for the UK are wider than merely equity between the generations
however.
8.4 A report by the Chartered Institute
of Personnel and Development (CIPD), the cost of study is already
impacting on the finances of recent graduates. According to the
report, just over half of 2005 graduates (51%) feel that the cost
of education will have a major impact on their chances of purchasing
a property, and around 30% do not save for a pension because of
debt.[18]
8.5 In Australia, which has a system similar
to that in England, the introduction of fees and income-contingent
loans has contributed to an increase in the proportion of young
people living in the parental home after graduation. The median
age of first homebuyers has also risen.[19]
8.6 Evidence also suggests than Australians
are also delaying having their first child, and choosing to have
fewer children in recent years. The median age of Australian mothers
at the birth of their first child rose from 24 in 1975 to 29 in
2000.
8.7 Not all of this movement can be ascribed
to higher education fees. Nevertheless, as the population ages,
the current structure of the social security system becomes more
and more difficult to sustain. Placing a higher burden of tuition
fees on young graduates will hardly serve to improve this situation.
9. Impact on the sector
9.1 Whilst the level of fees, and the resulting
increase in graduate debt is of great concern to NUS, the Higher
Education Act introduced another damaging principle to student
finance: marketisation.
9.2 The market in HE has in most cases arisen
in the provision of bursaries, rather than in fee charging. One
of the criticisms levelled at the current system by those who
would advocate some or all universities being able to charge more
than the current £3,000 is that the cap was set too low,
and as a result no market in fees appeared as the greater majority
of institutions chose to charge the full amount. Richard Sykes,
Rector of Imperial College, has said that he believes,
"... the big mistake was the £3,000
because it didn't create a market. Everybody charges £3,000.
I insisted on £5,000 because it would have created a market:
some would have charged nothing, some would have charged £1,000,
some would have charged £5,000."[20]
9.3 It is impossible to know for certain
whether or not he is correct in this assertion (though NUS rather
doubts any institution would have provided their courses for free)
but it might be reasonably expected that an increase in the cap
would result in a greater variation in fee levels.
9.4 Such a situation would, we believe,
have several detrimental consequences for students and for the
sector as a whole.
9.5 If the cap is lifted, those institutions
already rich would get richer as they could charge higher amounts
and still expect to attract students. This has already happened
to a very small degree, with a handful of the newest universities
having charged slightly less than the full £3,000 perhaps
in anticipation of a drop in applications had they not.
9.6 Bursaries provide a further illustration
of this principle. Many richer institutions offer a relatively
small number of large, high profile bursaries, in contrast to
those poorer institutions with higher numbers of widening participation
students who provide a greater quantity of smaller bursaries,
and in many cases receive much lower incomes from fees as a consequence.
9.7 Marketisation means that the financial
divide between the poorest institutions and the richest will only
increase, which will damage students, the sector and wider society.
9.8 There are also other difficulties that
arise from the introduction of a market. In pushing for higher
fees, institutions may have opened a Pandora's box. Students who
pay more will expect more from their institutions. This is in
some respects to be welcomed: too many institutions take their
students for granted. However, the increase in consumerism will
be detrimental to the relationship between institution and student
and result in a more litigious environment where institutions
will be spending large sums defending themselves against students
who believe the quality of their education does not match the
price they have paid.
9.9 This in some ways highlights the fundamental
problem of introducing such a market to higher education. HE is
unlike purchasing a car or a washing machine, as the return on
the investment is rather more abstract than a material possession.
It is very difficult to define what quality in HE means or how
it can be measured,[21]
and therefore is very difficult for a student to know precisely
whether their institution is providing an education worth £1,000
or £10,000—but this is the choice that proponents of
fees would ask them to make.
9.10 In an attempt to reduce some of this
risk, institutions have begun to introduce student contracts,
placing many responsibilities on students whilst usually avoiding
stipulating an equal number of responsibilities on the part of
the institution.[22]
This is neither fair nor in the interest of fostering trust between
student and institution.
9.11 In any case, poorer students cannot
make those choices freely. For example, the more expensive a course
the more likely a poorer student will choose to stay in the parental
home to save money. This inevitably reduces range of courses they
can undertake, especially the more rural their situation. In 1995-96,
before fixed tuition fees were first introduced, 12% of full-time
students lived in the parental home during term. In 2004-05 this
rose to 20% of students.[23]
Whilst the relative merits of living at or away from home are
not for debate here, it should not be the case that the choice
is made on financial grounds.
9.12 There are other potential problems
for students if fees are raised. Richer institutions that wish
to charge exorbitant fees justify criticisms about the impact
on access by arguing that such fees would allow them to provide
higher bursaries to poorer students. However, this could disenfranchise
those students: as soon as they become reliant on the largesse
of their institution to pay their fees and ensure their access,
it becomes more difficult for students to raise complaints about
quality or service.
10. Impact on part-time students
10.1 The situation for part-time students
is in some ways a lesson to those who would apply greater variability
to full-time tuition fees. Part-time fees are unregulated, and
though limited grant funding is available this is often inadequate
to meet the level of fee charged. The Government has also recently
increased the level of grant funding available to enable universities
to charge more.
10.2 Raising the level to which full-time
fees can be charged would only serve to increase pressure on part-time
fees to be raised to match, and unless grant funding follows this
will place part-time study further beyond some of the students
for whom part-time study is the only viable option.
10.3 Many part-time students also suffer from
the lack of adequate childcare support, and higher fees would
be a further barrier to their study.
11. Conclusion
11.1 Higher variable fees would be bad for
students, for higher education and ultimately for society in general.
11.2 The poorest students, when they are
not deterred from higher education in the first place by the prospect
of debt, are more likely to have to work during term time, often
for longer hours than is advisable. They do this to make ends
meet and to reduce their debt levels, but risk jeopardising their
chances of a receiving a good degree mark.
11.3 Rising debt levels across all groups
of students mean graduates save for pensions less, start families
later and are less able to get onto the housing ladder. Consequently,
the demographic problems of an ageing population are made worse,
to the detriment of all citizens, and we risk making the young
of today resentful of the comparatively wealthy older generations.
11.4 Variable fees mean that poorer students
will choose subjects and institutions based on cost rather than
suitability, whereas richer students can make that choice freely.
11.5 Increasing fees for full-time students
will have an inflationary impact on part-time fees, with the worst
impact on the widening participation groups who most benefit from
such study.
11.6 NUS wants a free, fair and funded higher
education system. This will mean more money is required, especially
if we are to match international competitors; the United States
of America spends 2.4% of its GDP on higher education, whilst
Britain spends just 1.1%, and the OECD average is 1.4%.23 But
individual students simply cannot meet this gap in funding and
it is unimaginative and unsustainable to expect that they should.
11.7 Public money is of course limited. The
debate is often phrased in terms of Government having to make
a choice between greater funding for Higher Education and greater
funding for early years education. NUS rejects that such a choice
has to be made: what Government should be doing is making a choice
between greater funding of education and other areas, or in raising
taxes on those who can afford to pay them.
January 2007
2 Barclays Graduate Debt Survey 2005. Back
3
Student Income and Expenditure Survey 2004/05-RR725, DfES,
2006. Back
4
Breakfast with Frost, 20th Jan 2003. Back
5
Survey of Medical Students" Finances, BMA, 2005. Back
6
Student Income and Expenditure Survey 2004/05-RR725, DfES,
2006. Back
7
Student Income and Expenditure Survey 2004/05-RR725, DfES,
2006. Back
8
"HE Students' Attitudes to Debt and Term-Time Working",
UUK, 2005. Back
9
"HE Students' Attitudes to Debt and Term-Time Working",
UUK, 2005. Back
10
"HE Students' Attitudes to Debt and Term-Time Working",
UUK, 2005. Back
11
University of Gloucestershire: http://www.glos.ac.uk/shareddata/dms/AAE66F70BCD42A039BF348C89358120D.pdf Back
12
House of Commons Library Research, December 2003. Back
13
Callender et al, Student Debt Project, UUK, 2003. Back
14
Watson and Church, Funding their Future: the attitudes of
year 10 pupils to HE, NUS, 2003. Back
15
Participation Rates In Higher Education: Academic Years 1999-2000
to 2004-05, DfES SFR 14/2006. Back
16
O'Leary and Stone, The Changing Wage Return to an Undergraduate
Education, 2005. Back
17
Bosanquet et al, Class of 2006-a lifebelt for the IPOD generation,
Reform, 2006. Back
18
Graduates in the workplace-does a degree add value?, CIPD,
2006. Back
19
The social and economic impact of student debt, Council
of Australian Postgraduate Associations, 2003. Back
20
Reform, 2006-www.reform.co.uk/filestore/pdf/Research%20Qulaity%20-%20Sir%20Richard%20Sykes.pdf Back
21
Brown, "Information about quality", Higher Education
Digest, 2006. Back
22
"Students told: turn up or face expulsion", Guardian,
September 2006. Back
23
Ramsden, Patterns of higher education institutions in the UK:
sixth report, UUK, 2006. Back
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