What do government changes to education mean for universities?

The response gives clarity on some areas that have been uncertain for higher education since 2019, including fee levels and repayment terms. However, there are still unanswered questions on who will be able enter higher education in the future and what restrictions there will be on courses.

In 2019, we outlined ‘five tests’ for the review to make real improvements to higher education. We’ve revisited these now against the government’s response.    

A new national state scholarship scheme will support disadvantaged students with their costs of living, which is positive. However, there is mixed news for lower-earning graduates. Lower interest rates on student loans will reduce the amount of debt, but they will start to pay back sooner and more in total. This is because of the lower repayment threshold and the repayment period being extended.

How willing disadvantaged students are to go to university will depend on how they see these changes. It also depends on if they will use the lifelong loan entitlement, which will provide access to loans for four years of post-18 study to use over a lifetime.

Areas under consultation in the government’s response have the potential to harm access to higher education. Minimum eligibility requirements, if there is no alternative path later in life, will stop those who come from groups who don’t normally go to university from accessing higher education. Caps to student numbers in some courses could impact the most disadvantaged people in our society. Possible changes to funding for foundation years could affect how likely disadvantaged and under-represented groups are to go to university, and how successful they are when they get there.

The UK needs a skills base with the breadth and depth to respond to future unexpected challenges. Higher level skills are crucial as the UK’s economy recovers from the pandemic, with 43% of employers surveyed by the CBI expecting an increased need for higher level skills, and only 4% expecting a decrease.

Giving people better access to financial support could help remove barriers to studying higher technical qualifications and this is a welcome move. The clear commitment to the lifelong loan entitlement could help sweep away barriers to retrain and upskill.

However, possible minimum eligibility requirements could make the shortage of skills in some areas, such as education and computer science, worse. Capping student numbers on some courses could limit the overall growth of higher-level skills, penalise students and employers alike, and be a short-sighted move.

Adequate funding is essential to keep the quality of higher education. We need well-funded universities to enhance student services, maintain facilities and provide a world-leading teaching experience. 

Freezing the fee cap at £9,250 until 2024–25 will add significant pressure on universities to do more with less. Since 2012–13, there has been only one inflationary increase to the fee cap. The £900 million of new investment is positive but it does not make up for the £2.2 billion in income universities lose from a freeze in the fee cap over 2022–23 to 2024–25. The fee cap has been frozen for eleven out of twelve years, and by 2024–25 will only be worth £6,600 in 2012–13 prices.  

A continuing fall in income per student will take its toll on university finances and the student experience. There is a strong commitment from the sector to deliver high value and high quality courses, as well as ongoing Office for Students consultations to regulate outcomes, so the proposal to introduce caps on student numbers in courses with ‘poor outcomes’ seems an unnecessary step.    

The positive impact of universities is felt right across the UK, including regions in England. Figures show universities support jobs, including 32,000 jobs in the North East and 85,000 jobs in the South West. Universities contribute billions to local economies, including £8.6 billion in the West Midlands to £9.4 billion in the East of England. And universities have a crucial role to play to achieve the government’s levelling up ambitions, and achieving net zero.  

The government’s response does not help universities maximise their contribution to local communities. For example, a fees freeze will severely limit how much a university can afford to invest locally to achieve net zero. Introducing minimum eligibility requirements or capping student numbers on some courses could damage  some parts of England. However, there is great potential in the lifelong loan entitlement to support upskilling to meet local workforce needs, if the eligibility criteria is wide enough.

The government’s response keeps the fundamental features of the current system. It’s a system that has been very successful in making sure all those who are qualified can go to university if they want to. The government’s commitment to the lifelong loan entitlement, if put in place in the right way, will be the single biggest policy change to give students more flexibility over when they study and how they enter higher education from different pathways.

The success of the entitlement will depend on how appealing it will be to potential students, and how well it works with other government policies, including policies across the devolved administrations. There would be no use in having a lifelong loan entitlement that you can’t use because you can’t study the course you want to. And what would caps on student numbers for some courses in England mean for the movement of students between the UK’s nations?   

People will weigh up the costs and benefits when making decisions on what they study. The post-18 review highlighted that misperceptions of student debt are pervasive and how the student finance system is explained should be improved and updated. The government’s response is silent on this, which is a missed opportunity.

While the government’s response to the post-18 review has given certainty to fee levels and repayment terms, after two and a half years since the review, there are still unanswered questions. 

We will need to wait longer to see whether the outcomes of this response allow our post-18 system to grow its positive impact on individuals, the economy and the whole of our society.