Ryan Shorthouse and James Dobson are co-authors of Bright Blue’s new report, Going Part-Time.
Britain needs more graduates, because greater participation in Higher Education (HE) boosts individual and national prosperity.
There continues to be a strong lifetime salary premium for graduates, and having more highly skilled individuals in the UK workforce will enhance productivity and economic growth.
So it is welcome that the number of school leavers enrolling on full-time undergraduate HE courses continues to rise, despite the increase in tuition fees. But post-secondary school, full-time HE study is not, and should not be, the only route into university.
HE should be accessible to eligible individuals throughout their lives. In particular, part-time HE is crucial for those wanting to up-skill and re-skill later on in life.
Worryingly, there has been a significant decline in the number of part-time HE entrants in English universities in recent years.
Between 2010-11 and 2013-14, the number of UK and other EU part-time undergraduate entrants fell by 46 per cent while the number of part-time UK and other EU taught postgraduate entrants declined by 28 per cent.
Policymakers must now urgently find ways to reverse this alarmingly trend. To do this, we must understand in detail the barriers individuals face when trying to access part-time HE. That is the focus of Bright Blue’s new report, published today.
The good news is that there seems to be significant latent demand for part-time HE among the general public in England.
We found that 37 per cent of English adults aged 18 or above with no experience of HE have considered part-time HE at some point in the past five years but ultimately did not pursue it. We went on to poll a large sample of these ‘considerers’ to understand the barriers they faced.
Our report identifies three types of barriers: financial, practical and informational.
Financial barriers applied to considerers that were prevented from accessing part-time HE because they could not afford the tuition fees or the living costs associated with part-time study, or were not willing to pay the price.
Practical barriers applied to considerers that were prevented from accessing part-time HE because of the time or location of the course.
Informational barriers applied to considerers who did not have sufficient information about the potential benefits of part-time HE study or the financial support available for it.
Overall, 54 per cent of considerers reported a financial barrier as the main reason for not pursuing their interest in part-time HE further. This compares to 34 per cent who reported practical barriers and 7 per cent who reported informational barriers.
Specifically, the most frequently reported barrier was that they ‘could not afford it’, with almost a quarter of considerers citing this.
It is of little surprise that a majority of considerers reported financial barriers as most significant. This is because the financial support available to part-time HE students has reduced in recent years and remains inadequate.
The recession which began in 2008–09 has led to lower wages and employers cutting back on training and development budgets. In particular, since 2010-11 there have been reductions in the budgets of public sector organisations.
In 2012–13, some undergraduate part-time HE students did become eligible for government-backed tuition fee loans. This was a welcome move.
Nevertheless, the majority of part-time HE undergraduates did not meet the eligibility criteria for these loans, because they were either undertaking an equivalent or lower qualification, or a course that was not at the minimum ‘intensity’.
So, in recent times, the majority of part-time HE entrants have faced higher tuition fees with no government support and less employer support.
Bright Blue has designed two credible and innovative policies to mitigate the financial barriers considerers face so the decline in part-time HE can be reversed. When generating these ideas, we applied three key tests that needed to be met.
First, fiscal neutrality. Due to the Government’s focus on reducing public spending, any new policies must not cost the government any more money than is currently the case.
Second, progressivity. Those on the lowest incomes should pay less than those on the highest incomes.
Third, a fair funding settlement between the key beneficiaries of HE: government, individuals and employers.
Our first recommendation is that all eligible adults should be able to access a lifetime HE tuition fee loan account from government to pay for the tuition of any HE course – full-time or part-time – throughout their lives.
The size of the loan account should be determined by the government through consultation. Under new plans by the Government, some students who decide to take a full-time undergraduate, postgraduate and PhD degree can potentially draw down £44,000 in tuition fee student loans.
However, the amount in the loan account should also be low enough to trigger price competition and, in particular, downward pressure on undergraduate tuition fees in England.
Under forthcoming proposals, full-time and some part-time students will be able to access government-backed loans for undergraduate degrees, postgraduate degrees and PhDs.
In our system, all full-time and part-time students will be able to access government-backed loans for equivalent or lower qualifications, for an institutional credit, and when they are aged 30 or over.
Our system is much more progressive than the forthcoming elitist system which favours only academically excellent students.
In order to achieve fiscal neutrality, we need to ensure the government subsidy is no greater than it is now on the current student loans scheme. Toward this end, we suggest various measures on the repayment of loans.
Chiefly, the parameters for the repayment of the lifetime HE tuition fee loan account should be stricter (for example, the minimum salary threshold for repayment or the interest rate attached to tuition fee loans) for every new qualification obtained, or when the student is older.
It is important that this new repayment model is progressive. In other words, sufficient subsidies should remain in the loans scheme to ensure low lifetime earners do not pay as much as high lifetime earners.
This can be achieved in several ways. Our main proposal is that an alternative funding source – large graduate employers – should contribute to the subsidy on loans.
Our second recommendation is that employers of large amounts of graduates should pay a new ‘graduate levy’.
The rate of the levy is unspecified, as is size of the employer. We believe that the government should consult on this as it has done with the ‘apprenticeship levy’.
All funds raised from the graduate levy will be used to help subsidise the proposed lifetime HE tuition fee loan account.
The graduate levy will prevent some employers from gaining a ‘free-ride’ by recruiting employees who were funded by their previous employer to do a part-time HE course. It also ensures all large graduate employers contribute to the cost of a system which they are major beneficiaries of.
There should be a reduction in the amount some large graduate employers pay through this graduate levy if they are already funding some of their employees to undertake part-time HE study.
Employers may argue that they already contribute to the costs of HE through Corporation Tax. This is true.
But graduates also pay considerably for HE, above and beyond their student loan repayments, through the generally higher levels of personal tax they pay throughout their lifetimes.
Just as there is a strong argument for making graduates who benefit significantly from HE pay more through their student loan repayment profile than other graduates, so too is there a strong argument for making employers who benefit significantly from HE participation – specifically, those who recruit a considerably high proportion of graduates – pay more through this graduate levy than other employers.
The Government could dramatically improve life chances and raise national prosperity by adopting these two ideas and building a funding system for HE that supports all upskillers and reskillers.