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What to make of the new doctoral loans?

Martina Tortis

Martina Tortis

Former Policy Analyst
Universities UK
Medical students

It is a well-known fact that a healthy pipeline of research talent is the fuel of the UK’s continued research excellence, and an important driver of innovation and organisational performance in the wider economy and society (as well as remaining a good investment for the students themselves). And it is good to see this recognised and acted upon by government in last Wednesday’s Budget Red book – especially at a time when the UK badly needs to address its productivity gap with other advanced nations, but has seen its chances of doing so dampened by lower productivity growth prospects.

In the 2016 budget, government gave PhD students, and the universities that train them, a big vote of confidence by confirming the introduction of doctoral loans of up to £25,000 (with a 9% repayment rate, or combined 9% for masters and doctoral loans where applicable) from 2018-19. Many details of the loan design still need to be worked out (and will be soon, through a ‘technical consultation’ which UUK will engage with), but what has been announced so far makes us optimistic about how the scheme is shaping up.

The scheme is additional – but how to make it complementary?

In our response to the May 2015 BIS consultation on PG funding (which we discuss here), we welcomed this initiative as a complement to existing PGR support. However, we also stressed that core support from the UK funding councils and research councils, should remain protected, and the sector needed concrete reassurance that the loan scheme would not displace existing grant funding over time.  Wednesday’s Budget has provided such reassurance, as the policy costings confirm this represents an additional investment by government.

Now that the scheme’s additionall​y has been put down in black and white, the focus should be on ensuring this works well within the existing support mechanisms, and gives institutions enough flexibility to use it in the way that is best for their specific research strengths, objectives and mix of PGR support (including internal sources such as fee waivers, departmental bursaries).

PhD recruitment and funding decisions are often made at the faculty/departmental level, so having that flexibility to choose which students to support through complementary sources, and how, is fundamental for robust quality assurance as well as for sustainable financial planning.

Juggling incentives, safeguards, flexibility and sustainability

It’s also positive that the scheme supports all applicants not receiving a research council living allowance (ie the so-called stipend) who secure a PhD place through institutions’ own recruitment processes. This strikes a good balance between making the system widely accessible, while ensuring loans are targeted on the basis of both merit and need. If confirmed, this design could enable the scheme to address the specific financial barriers faced by different types of prospective/current students, including:

  • Those forced to miss out on PhD programmes altogether for financial reasons (risk and/or lack of own funding). Many of these candidates have no recourse to savings and/or the fiercely competitive RC-funded stipends

  • Those who are just months away from the finishing line, but whose completion is put at risk by a modest funding shortfall (eg for the write-up period).

If the scheme can successfully reach these two groups, then it has a good chance to  both help increase participation in doctoral training (particularly from underrepresented groups), and improve outcomes for existing students. It will also be important for the scheme to cover all subjects and both part and full-students, to have real impact on outcomes.

We want to see a loan scheme that works for students, the public purse and institutions alike – but to get there, it will be essential for government to get the buy-in of the sector into the design of the scheme, and be mindful of the unique nature of the PhD training experience and the different financial challenges and strategic considerations confronting universities in this area of delivery.

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