This morning, Onward research responds to the Government’s Augar Review on post-18 education funding. We argue that it has the right analysis but comes to the wrong conclusions.
New Onward analysis released ahead of the review yesterday underlined warnings made by the Education Secretary, Damian Hinds, that “poor value degrees are letting down thousands of students and costing the taxpayer millions”.
In fact, we revealed yesterday that male students are much more likely to suffer financially from going to university than women. 42 per cent of male students are studying courses that will not deliver high enough earnings to pay back their student loan, meaning it is not economically worthwhile for the taxpayer to subsidise those courses.
Nearly one fifth – 18.6 per cent – of male students are enrolled on courses that deliver lower graduate earnings than work or technical education. Male students doing Creative Arts, Communications, English, Agriculture, Psychology, Philosophy and Languages degrees are more likely to earn less after three years at university than if they had spent three years in employment or doing a technical course. At some universities, male students doing these degrees can expect to earn less than the national living wage, on average, five years after their graduation.
- Male students studying Creative Arts from Bolton University earn an average of £14,400 five years after graduation. This is less than half the average male earnings (29,400 five years after graduation) from the same course group at Loughborough University and lower than the full-time national living wage.
- Male students studying Languages at Oxford Brookes earn an average of £22,100 five years after graduation, compared to £36,900 from Durham.
- Male students enrolled on Mass Communications & Documentation degrees at Liverpool Hope University earn just £16,400 after five years, compared to £29,300 at Sheffield.
Previous Onward research has found that between 18 and 25 per cent of graduates are studying degrees which fail to deliver a lifetime earnings premium that justifies the cost of a student loan, and 40 per cent of students are on courses that have average earnings of less than £25,000 five years after they graduate.
However, we believe the Augar Review’s proposals to improve value for money, including an across the board cut in university tuition fees from £9,000 to £7,500, are the wrong approach. Like Jeremy Corbyn’s proposals, they would only help future graduates and create unfairness because it would do nothing for current students or recent graduates.
An across-the-board cut in the headline cost would make some very valuable courses unviable, while leaving some courses in place which would be poor value even at the lower rate. Currently, 9 per cent student loan repayments mean that graduates pay marginal tax rates of up to 51 per cent, a higher rate than for some of the very highest earners.
Instead of the proposals put forward by the Augar review, we call for the next Prime Minister to use the tax system to help young people with a series of reforms to deliver better value for young people and the taxpayer:
- Introduce a graduate tax cut of 50p in every pound to halve the loan repayments of 2 million graduates. This has the advantage over reducing fees or changing future repayment terms as it would apply to anyone repaying their loan, past, present or future, while putting cash back in the pockets of young people.
- Crack down on low value courses by making the charging of high tuition fees conditional on courses delivering a certain level of earnings or introducing a grade floor for low value courses to redirect students into routes with a higher return.
- Invest some of the savings from cutting out low value courses into an expanded technical education system, especially higher level technical qualifications and apprenticeships, which deliver higher earnings premia than many university degrees.
Neil O’Brien MP, said:
“The Augar Review has done the right analysis but come to the wrong conclusions. We need to slash the cost of university in half but do so in a way that is fair and also helps current students and recent graduates. We need to root out courses which are offering a false promise to students and leaving them with huge debts and low earnings. We must end the scandal of young graduates facing higher marginal tax rates than millionaires. And we need to further build up technical education as a real alternative to low value university courses.”
Gillian Keegan MP, said:
“It is essential we do more to grow technical education to offer young people a viable and prestigious alternative to full-time university courses. For too long we have assumed that university is right for everyone but, as the only MP to have completed a degree apprenticeship, I know just how powerful technical education can be. Whoever takes on the leadership of the Conservative Party next, I hope they embrace technical education as one of the best ways to help people achieve their potential.”
The Daily Telegraph, Going to university pays off faster for women than for men, new analysis finds
The Times, Graduates too poor to pay debt five years on
Onward’s previous research is available at www.ukonward.com/aquestionofdegree
For media enquiries please contact Will Tanner at [email protected]