5th August 2016 1:00
By Blue Tutors
This week has seen more changes to student finance that are likely to strongly influence the number of students taking up their university places and application numbers this autumn. First is the announcement that maintenance grants of up to £3,387 per year for university students from low-income families will no longer be available; instead, student maintenance loans will be increased to £8,200 (£10,702 in London). The government were criticised by the opposition for passing the change “undemocratically” via a small committee without a Commons vote or debate. The government argues that funds are still available and are simply repayable under the same terms as existing student debt and therefore the change, first announced in the 2015 Budget, should not affect the affordability of education.
The NUS and labour party, on the other hand, believe that increasing student debt is a blow to access, with minority groups such as BME and mature students among the most debt averse. University education has long been seen as the greatest enabler of social mobility; many argue the new policy, which will leave 500,000 students from less privileged backgrounds with greater debts than those able to finance their study through personal funds, will unfairly amplify existing inequality. The government responded that higher education needed to be funded in a more sustainable way and it is unfair to expect the taxpayer to subsidise living cost for those who are “likely to earn a lot more than them”.
Yet, the justification that student loans are an investment that “boosts employability and earnings” was called into question this week when a study released this week showed that any wage premium experienced by university graduates would be entirely eliminated by student debt repayment in the current model. The research, conducted by Intergenerational Foundation, showed that the promise of increased earnings used to justify tuition increases was misleading to the majority of students. Only those who studied dentistry or medicine, and a handful of Oxbridge graduates, still enjoyed a significant salary bump from university education which would compensate for the escalating cost. The increasing number of graduates is undermining the value of a university degree, meaning that despite graduate employment being at an all-time high, the quality of jobs and wages that most graduates experience are steadily being eroded. If the current trend continues, we can expect fewer young people willing to pay the price for an ever less valuable university education.