The government unveiled multiple large shake-ups to the higher education sector this week, including a change to the repayment period for student loan debt and adding a minimum A level requirement for access to student loans.
Until this week, student debts for UK graduates were written off after 30 years, which for most meant that they were student debt-free by their mid-fifties. This has now been increased to 40 years.
This pushes the time at which the debt will be wiped for the average graduate into their mid-sixties, meaning many now see the debt as a life-long “graduate tax”. The move is widely seen as an attempt to reduce the burden of higher education on the taxpayer.
The Department for Education said “Without action, only 23 per cent of borrowers who enter full-time higher education next year are forecast to repay their loans in full, with the rest picked up by the taxpayer. This has to change – and our reforms will mean 52 per cent of borrowers will repay their loans in full”.
They added that taxpayers, most of whom have not been to university themselves, are currently coughing up 44p of every pound of student loan given to undergraduates.
Also announced was a consultation on minimum A level standards that must be achieved for students to access student loans. This standard being considered is at least two E grades at A level, and that the student must have passed maths and english GCSE.
Commentators, including the Guardian and the Evening Standard, have decried the introduction of minimum qualifications for student loan entitlement as “an attack on social mobility” and “working class learners”.
The repayment threshold will also be lowered, for students signing up for new loans, from £27,000 to £25,000.
These follow the announcement near the beginning of February that the earning threshold for repayment of student loans will be frozen, rather than increasing to account for inflation (see Felix 1791). This will apply to students who already have a student loan. The aforementioned lowering of the repayment threshold is expected only to apply to new students.
The changes come as the government responds to the Augar review, an independent panel review on post-18 education and funding. Colloquially named after the lead author, Dr Philip Augar, the 216 page review looks thoroughly at the benefits and costs of higher education to the individual and the economy, and draws conclusions in multiple areas.
In many ways the government can be seen to have accepted the Augar review . It concluded that the government should “[freeze] the repayment threshold”, so that “more graduates... repay their loans in full over their lifetimes”.
The report also said that “generous and undirected” funding has led to an over-supply of unnecessary courses at “great cost to the taxpayer”. The introduction of minimum A level requirements is a clear attempt to address this.
In its response, the government announced that tuition fees would be again frozen at £9,250, described as “a blow” to universities. This amounts to a deviation from the recommendations of the Augar report, which suggested lowering the cap to £7,500.