The announcement
On Thursday last week (24th February) the government finally published their long-awaited response to the Augar Review. The review, officially known as the ‘Post-18 review of education and funding: independent panel report,’ was first commissioned by Theresa May in February 2018 and chaired by Sir Philip Augar. The report was published in May 2019 and the Department for Education published an interim response in January 2021. At the Spending Review in October 2021, the government’s response was promised to be just ‘weeks’ away before being finally announced last week.
The key policy changes announced include:
- The student loan interest rate will be set at RPI+0% for new borrowers starting courses from 2023/24.
- The tuition fee cap will be frozen at £9,250 for a further two years – up to and including 2024/25.
- The repayment threshold – the point at which graduates start repaying their student loan – for new borrowers starting courses from September 2023 will be set at £25,000 until 2026-27.
- The student loan repayment term will also be extended to 40 years for new borrowers from September 2023.
In addition, the government have announced two consultations. The first is on higher education reform which will consider policies such as student number controls, minimum eligibility requirements, and foundation years. Whilst some of the most hostile response to the government announcement has been about the proposed introduction of minimum levels of English and Maths grades at GCSE or A-Level to secure a government- backed student loan, it is notable and perhaps indicative of the complexity and controversy of such a policy that it has been merged into a wider long-term consultation. Meanwhile, whilst Augar had encouraged the government to scrap foundation years, they have been retained for now pending the findings of the consultation.
Along with student finance reform, the government launched a consultation on lifelong learning entitlements, a key pillar of the government’s plan to ‘level up’ further and higher education and boost education opportunities for those who didn’t go to university straight from school or college. Under the lifelong learning entitlement plans, individuals will get a loan entitlement to the equivalent of 4 years of post-18 education to use over their lifetime. It will be available for both modular and full-time study at higher technical and degree levels (levels 4 to 6), regardless of whether they are provided in colleges or universities. The government’s consultation will explore how the lifelong loans will work in practice including around modularity, flexible learning and quality provision, and provides a chance for education providers, individuals and everyone in between to have their say on how the scheme should work.
Separately, the government have confirmed that a policy of post-qualification admissions will not be pursued following a consultation which concluded last year. Whilst some providers had expressed an interest in reforming the system, especially after the chaotic covid exam years, the Department for Education perhaps felt the complexity and controversy of the changes meant now is not the time given everything else going on.
The reaction
The releases and comment pieces from Secretary of State Nadhim Zahawi and Minister for Further and Higher Education Michelle Donelan focussed on ‘driving up quality’ and a ‘fairer deal for students.’ Both have been keen to deliver these deeper reforms in education with Zahawi looking to make his mark on the Department through higher education before his expected focus on Schools with the upcoming Schools White Paper.
On the Conservative backbenches there was fairly consistent support for the proposals. Bishop Auckland’s Dehenna Davison had expressed concern around the impact on young graduates already paying back the loan but quickly fell back into line after reassurances the changes would only affect those taking out new loans. Andrew Bowie took a similar approach whilst former Universities minister Chris Skidmore issued a more cautionary approach arguing the government should not lose sight of a focus on quality outcomes for students leaving university, and should seek to avoid pitching itself against students ‘who have faced incredible hardship.’
As expected, both Labour and many of the Unions were strongly critical of the plans with Shadow Education Secretary Bridget Phillipson arguing the Conservative’s plan was ‘failing’ universities and students. Meanwhile the UCU union said the proposed introduction of minimum entry requirements for student loan access would ‘shut down access to higher education,’ a view echoed by public figures such as poet Benjamin Zephaniah and businessman Theo Paphitis over the weekend. Similarly, the Assocation of School and College Leaders (ASCL) said the proposals ‘sounds like removing a ladder up rather than levelling up,’ severely damaging the education prospects of disadvantaged students.
Perhaps most striking is the response from MoneySavingExpert’s Martin Lewis. Outspoken on the issue of student loans and known to have a direct line to the Treasury, he highlighted a WonkHE piece from the team at London Economics which revealed most of the ‘savings’ from the student finance reforms are actually from an ‘arcane’ accounting change as opposed to the payment adjustments. Meanwhile Paul Johnson director of the Institute for Fiscal Studies criticised the student finance changes saying ‘they are… highly regressive, hitting low earners and benefiting high earners. They might end up cutting access to higher education. In some dimensions, they look plain delusional.’
So, were the proposals worth the wait? Whilst it is clear the student finance system needs fixing and more needs to be done to improve access and equity in higher education, few are convinced that the package of measures announced last week will alone deliver the change desired. The announcement is likely to have focused minds on all sides back on tackling structural issues in further and higher education, as other issues like freedom of speech appear set to fall by the wayside. Yet the plans announced last week leave the government with a mountain of work to do against a packed legislative agenda and a tough levelling-up policy programme.
