More postgraduate funding questions

A few weeks on from the Chancellor’s Autumn Statement announcement on postgraduate funding, and some of the issues and necessary considerations are starting to crystallise. Writing in the THE, John Morgan summarises the emerging commentary, which raises questions over the government’s estimates of the number of students likely to take out the loans, as well as the estimates of the cost of loan write-offs.

There is particular concern that the loans will, as they are to be made available to cover course fees, be taken up by EU students as well. This will increase both the overall number of loans, and the number that will not be repaid in full. According to the Times Higher, “The IFS said in a 9 December briefing note that while the write-off rate on postgraduate loans could be between 0 and 3 per cent for domestic students, it would be as high as 12.6 per cent if EU students failed to repay”. As a solution, it notes that “the CentreForum thinktank had recommended that the government designate loans as being for maintenance, which would make EU students ineligible”.

However, the paper also highlights that demand could be limited by the loan repayment terms. Under current plans, postgraduate loans are to be repaid alongside undergraduate ones which, at the same rate of 9 per cent on earnings above £21,000, could mean graduates “face a marginal tax rate of 50 per cent” once income tax and National Insurance are included.

This could be an issue if the proposed system is to overcome the current financial barriers to postgraduate education, as outlined in new HEFCE research. The HEFCE annual Intentions After Graduation (IAG) survey found that just 56% of graduates that intended to take a postgraduate qualification actually did, with 65% of those put off siting course fees as a factor. Graduates from ethnic minorities or poorer backgrounds were disproportionately discouraged from applying. HEFCE have published a blog post that further explores the issues.

There are two further related items. Firstly NUS Wales have warned that Wales could face a “brain drain of the brightest and best postgraduate students” to English institutions unless the loans are matched by a similar fund from the Welsh government, the BBC reports. Secondly, HEFCE commissioned research, undertaken by KPMG, has been published that looks at the cost of postgraduate taught (PGT) provision. Amongst other conclusions it finds that the staff cost of PGT is over twice that of teaching at undergraduate level, and that specialist postgraduate institutions teach postgraduates at a lower cost than institutions providing both undergraduate and postgraduate courses. The full KPMG report can be viewed on the HEFCE website.