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Mon, 13 July 2020

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The Augar proposals on UK student finance fail lower and middle-earning graduates

The Augar proposals on UK student finance fail lower and middle-earning graduates
3 min read

Replace student fees with graduate contribution to a higher education fund and make degree courses free at the point of delivery, writes Justine Greening MP

After 14 years in Parliament, I’ve seen some reviews open the way for policy to move forward. But there are other times when they move things backwards.

In February 2018, Theresa May commissioned Dr Philip Augar to review the approach to financing post-18 education in England. I felt then that the system fixes we needed were clear and, to a large extent, already being developed within the Department for Education (DfE).

After the long wait for the Augar review to report, many of its recommendations were already policy proposals within the DfE. We didn’t need a lengthy review to recreate existing proposals or, worse still, take things backwards on social mobility. After 18 months of uncertainty for students and universities, it really wasn’t worth it.

So where did it go wrong and what should we do instead? Well for a start, the overriding aim of the review should have been driving social mobility. I understand first-hand the transformational impact universities have, and I passionately believe that no young person should be priced out of opportunity and social mobility.

Student finance does need reform, but not in the way laid out by Augar’s regressive review. Its recommendations include a reduction in headline tuition fees – a disproportionate cash boost to the better-off students, given they are more likely to go to university than any other group. Only Jeremy Corbyn’s Labour party has proposed a more regressive approach with its proposal to scrap fees entirely.

Augar’s proposals to decrease the graduate earnings threshold for paying back student loans and increase the payment term to 40 years couldn’t have been better targeted to penalise lower-earning graduates. His proposal to introduce an overall repayment cap also directly benefited the best-earning graduates. Augar’s new system would hike up lower and middle-earning graduates’ overall repayments by £12,000. Yet graduates who go on to earn the highest salaries would see their repayments reduced by £18,000. It’s unacceptable and unfair.

The suggestion to reintroduce maintenance grants was welcome, but it could have been done in 2017 had No 10 agreed to it when I proposed it as education secretary.

And what about the impact on universities? Augar’s proposals to reduce fees to £7,500 are unsustainable, especially for non-Russell Group universities that don’t have the luxury of large research grants and often have far fewer higher-price tag international students and postgraduates. Yet these universities are the engines of social mobility that can make the most difference to spreading opportunity. Many are involved with my Social Mobility Pledge campaign.

On top of that, it’s a double whammy for science, technology, engineering and maths (Stem) degrees already in short supply for employers. The fees reduction takes funding away from Stem degrees, which are already more expensive to run than arts courses, and then limits existing cross-subsidisation from lower-cost degrees, because they’ve had a cut too.

I want to see a much more radical, fairer reform that involves scrapping student fees and loans altogether, and having an earnings-based graduate contribution which could be based on the current graduate contribution but instead goes into a higher education fund, making degree courses free at the point of delivery.

An earnings-based approach would better ensure that those graduates who have benefited most contribute most back into the system, which is fairer. The fund could include an additional contribution from businesses, mirroring the logic of the apprenticeship levy.

Augar’s student fee reform recommendations miss the social mobility objective this review should have had at its core. Any government that truly understands why social mobility matters would never implement them.

Justine Greening is Independent MP for Putney and former secretary of state for education