University Tuition Fees

Carol Monaghan Excerpts

Monday 25th October 2021 Westminster Hall

[Tom Hunt (Ipswich) (Con)]

I beg to move,

That this House has considered e-petition 550344, relating to university tuition fees.

It is a pleasure, Ms McVey, to serve under your chairship for the first time. I thank the petitioner for putting together a petition on this important issue, and the 581,287 people—a very large number—who signed the petition, particularly the 764 from Ipswich. That number does not surprise me, because I have been contacted by many constituents over the past 22 months with concerns about how university education has been impacted by the pandemic and about having to pay full tuition fees, even though, so often, their education and university lifestyle have been disrupted.

The petition first calls for a reduction in tuition fees from £9,250 a year to £3,000. Secondly, it calls for live debates to be held frequently between Members of Parliament and students. Though in principle that sounds like quite a good idea, practically I am unsure how it would be arranged. If we were to have those sorts of debates between MPs and students, where would it stop? Would we have such debates for every interest group on every issue across the land? It is important to remember that we are a representative democracy and that, as Members of Parliament, we engage frequently with higher education students.

[Carol Monaghan (Glasgow North West) (SNP)]

It is also worth saying for the benefit of those watching the debate that there is the opportunity to visit Parliament and see debates take place. As the hon. Gentleman says, debates between MPs and students may be a little more difficult to organise, although not impossible, but it would be great to see student organisations come and meet MPs and see what goes on in Parliament and how they can influence it.

[Tom Hunt]

I could not agree more. I have the University of Suffolk in in my constituency, whose students have visited Parliament, and I was very happy to receive them. It provides a good opportunity for university students to engage with their elected representatives and understand how Parliament operates.

The £9,250 fee means that those leaving university have an average debt of £45,000. It is not a particularly pernicious form of debt, but it still has interest applied to it. That debt has to be paid over a number of years, often decades. In fact, it is thought that only 25% pay it back in full—the interest and the amount borrowed—while 75% do not. The concern about the level of fees is that it could put off young people from the most disadvantaged backgrounds from attending university. The Education Committee published a report not long ago on white working-class kids, and found that they were the least likely of any group to be represented in higher education, with only 12% of white boys eligible for free school meals ending up in university. I think the percentage was slightly higher for girls, at around 15% or 16%. That is a point that the Government need to consider.

Repayment does not kick in until someone is earning £28,000, but that can still be difficult for people who are trying to get by. As I saw when I was trying to get a mortgage, it is taken into account by mortgage providers. It does not impact a person’s credit rating, but it does impact their likely success in getting a mortgage. I have sat there and looked at my monthly outgoings and ingoings, and clearly, if a certain amount is going out over a long period, that does not make it any easier to get a mortgage.

There are two slightly separate issues here. There is the question whether, in the medium to long term, tuition fees should be decreased, but there is also the impact of the pandemic and the question whether or not there should be a partial or full reduction for young people who have been impacted by the pandemic over the last 22 months. It is important that we bear in mind how young people and their mental health have been impacted.

We know that university is not just about the academic side of things. It is also about the social side of things. For many young people, the experience of going to university is transformative in terms of their outlook, personal development and access to university societies and everything else. I was fortunate when I went to university. The first year enabled me to get used to living in a large city, away from my family. Of course, the first year is when students make friends, and they are often the people they live with in their second and third years. I feel great sympathy for young people who have had that opportunity taken away from them.

I have also on occasion been quite critical of some universities, lecturers and university unions that in my view have not always done everything they can to get back to proper, in-person teaching. My understanding is that, at the start of this term, only four out of the top 27 universities had actually gone back fully to in-person teaching. I question whether that is appropriate, and I also question whether now is the time to be talking about strikes, when university students have already had their education impacted so much. I appreciate that often it is a hybrid approach, whereby seminars and tuition are done in person while lectures are done online, but I also talk to many university students who would really appreciate in-person lectures because the virtual ones are no substitute for accessing lectures given by experienced academics. It is not quite the same level of tuition as they were getting before the pandemic. In fact, a Times survey of students who started university before the pandemic showed that 60% thought that their education had been either severely or moderately impacted during the pandemic. I think that many students share that view. I understand that some universities have made arrangements for partial reductions, but I am not sure how significant that is and, of course, the majority of universities have not done that.

I have some concerns about whether decreasing tuition fees from £9,250 to £3,000 would be the right thing to do in the long term. As I said earlier in my speech, 75% end up not paying back their debts in full. Currently the Government lend £17 billion in loans. In March 2021, I believe that the outstanding amount was £141 billion, which is a significant amount of money. If we decrease the £9,250 to £3,000, who would fund that? Would it be the taxpayer? Ultimately, I think that is what we would be looking at: more taxpayer subsidy for university education.

--- Later in debate ---

[Carol Monaghan (Glasgow North West) (SNP)]

It is a pleasure to serve under your chairmanship, Ms McVey. I pay tribute to the petitioners, who have done so well in bringing this petition to the House for debate. I thank the hon. Member for Ipswich (Tom Hunt) for leading it off.

I want to start by saying that in Scotland, of course, education remains free. That makes a massive difference when looking at graduate debt because the average debt on graduation in Scotland is around £12,000, compared with anything between £43,000 and £50,000 in England, depending on where the data comes from.

The hon. Member for York Central (Rachael Maskell) asked an important question: what is education about? Is it for personal benefit or for the common good? That is ultimately what the debate should be concentrating on. In schools, we educate children not just for their own benefit but for societal benefit. Are we simply providing young people who embark on tertiary education—who will go on to contribute economically and societally to our nations—with a service for which they should pay, or is it about more than that? As legislators, we need to be clear.

Post Brexit, the UK’s economic success will rely on a well-educated population. We know that there are skills shortages in many areas, including science, engineering and healthcare, to name but a few. But it is not just at graduate level. It is also at technician level and at apprenticeship level—it is at many different levels. Therefore I do not think we do young people a great service—this has been mentioned by a number of hon. Members—by encouraging as many of them as possible into higher education when it might not be the best pathway for them.

I have mentioned already that in England the typical graduate will start with a debt of anything between £43,000 and £50,000—depending on what source is used—because of tuition fees and, of course, the student loans that they take out. For some, that will be impossible to repay, as has been mentioned by the hon. Member for Ipswich. That was also recognised by the Office for National Statistics, which said that student maintenance loans should be treated as a deficit in the Government’s accounts. That ONS announcement ended the fiscal illusion that kept student debt off the Government’s books. We already know that England has the highest tuition fees in the industrialised world, and the ONS has confirmed what many of us have been saying for a long time—this is not saving public money in the long run.

The Government remind us regularly of how economically astute they are, but we can see that, with student loans to pay for high levels of tuition fees, they are simply shifting fiscal responsibilities on to a Government 30 years in the future. But the real issue for our young people is that the short-term fiscal gains for this Government are won off the back of our young people. Continuing to charge fees of more than £9,000 a year in England is morally wrong. And we know that three quarters of student loans will be written off eventually. The Government need to start looking to Scotland’s lead and slash student fees or, better still, abolish them completely. Of course, with the student loans come spiralling interest rates. That has to be taken seriously as well. We have to look at what, realistically, we are asking young people to pay back.

The hon. Member for Slough (Mr Dhesi) highlighted the difficulties for his young people—they make his the youngest constituency in the UK—in the graduate job market. Many of us and many young people will be asking, “Is the debt really worth it for graduate jobs that might be paying £18,000 or £19,000 a year?”

Often, we talk about apprenticeships and college places. The problem is that there is still not parity of esteem. We hear Ministers advocating college and apprenticeships for young people, but I wonder how many of them are advocating that for their own children, because many parents continue to see apprenticeships as second best. We need to change that; we need to look at countries such as Germany in that regard. When Ministers and parents all consider that university is the gold standard of post-school education, it is no surprise that young people see their place at university as a measure of success, but are we really doing young people any favours by providing unlimited access to courses that may not lead to great employment and will almost certainly lead to debt? In Germany, technical education is considered to be of equal value; for youngsters and their parents, there is no stigma about skills-based courses. That is what we need to get to.

Last week in the Select Committee on Science and Technology, in a session looking at science funding, the Nobel laureate Sir Paul Nurse said that

“we have rushed too much to send everybody to universities”.

We need to think carefully about how we change that.

Often in these debates, hon. Members cite the number of young people going to university as the measure of success, but the metric that we should be using is the number of young people going on to positive destinations. We in Scotland are leading the UK, with 93% of our young people in training, education or employment. The hon. Member for Ipswich mentioned different pathways for our young people, and we need to look at that more.

The hon. Member for Poplar and Limehouse (Apsana Begum) talked about encouraging those from disadvantaged backgrounds and how we can support them to enter the job market. There are lots of things we can do, but we should make university attainable for them by restoring the tradition of free higher education, as we have done in Scotland. We have done more than that: we have maintained education maintenance allowance for those in schools or further education, and bursaries for young people from disadvantaged backgrounds in higher education. This package works: Scottish 18-year-olds from the most disadvantaged backgrounds are 67% more likely to apply to higher education institutions than they were 15 years ago. As others have said, Scottish students graduate with the lowest debt in the UK. We firmly believe that access to university should be based on the ability to learn, not the ability to pay.

We have a problem if we only educate graduates, because we need a full range of different skills. I quite often use the term “tertiary education” because the lines between further and higher education are far more blurred in Scotland, with many other further education colleges delivering degree courses. We also have movement between further education and higher education. For example, a youngster might do part of their training at an FE institution and then enter a third-year university course. We need to look at how we allow access to such courses.

Paying for education is a duty not only of Government, but of business and society, including the taxpayer. We need to ensure that we have a well educated population that can provide economic growth in different businesses and sectors. We have a duty to fund the education of our young people—whether that be further education, apprenticeship education, or higher education—to benefit society and fuel that growth.

The hon. Member for York Central mentioned the Budget and the spending review. That is important because when we are looking at university funding, budgets count and science funding counts, and this Government have pledged £22 billion for research funding. We want to see some movement on that over the next few weeks. It would be good to see a strong statement in the Budget on that funding. We also need clarity on participation in Horizon Europe, which we still do not have. Until we get this sorted, we are putting our research sector at a disadvantage.

Finally, I congratulate the petitioners on bringing the debate to the House. I know it is difficult just now, because we are living with covid, but in the coming few years, it would be good to see some university students observing these debates.

--- Later in debate ---

[Matt Western]

The current vogue term is outcomes. I often ask, “What was the key outcome of Keith Richards going to art school?” I do not think he actually finished the course, so it was not a terrific outcome. Outcomes can be measured in all sorts of ways, but my fear is that the Government—I am not sure whether the hon. Gentleman supports them—are looking to monetise that and equate it with some sort of financial value for what is being produced. However, as we have heard, we cannot equate that with a monetary figure. I know of many people who were on super-low incomes in their first couple of years post-university but who turned out to be fine entrepreneurs and set up their own businesses. How would we measure that?

[Carol Monaghan]

I like the word outcomes; I think it is a good way of describing the position we get to. However, I do not distinguish between those from a disadvantaged background and those from a more privileged or affluent background. We will have parity of esteem when the same number of youngsters from different backgrounds are going to the same types of places—so, whatever percentage going to university from that lot, and whatever percentage going to college from this lot. The problem is that those from a more affluent background are more likely to go to university, even though it might not be the most appropriate place for them.

[Matt Western]

The hon. Lady is absolutely right. Going to university is seen as a rite of passage for quite a few people. It is seen as the obvious next stage of their education. That is fine, to an extent, but what we as a society should be doing is giving encouragement and opportunity to the many who do not aspire to or imagine that they could go to university. I felt that myself back in the day, wondering what was and was not possible for me. I never imagined that that was something I could consider. I am sure that a lot of young people must feel that too, and we have to change that. Other societies do, as we have heard.

We should be much more ambitious about the sort of education system we want. I look at nations such as South Korea, that have a higher proportion going into higher education than the UK. I believe that we can achieve that by changing how we approach our schooling and how we give that opportunity to students, both through civic universities and through programmes such as Uni Connect, which sadly has had its budget cut by a third, but which was doing a terrific job in reaching those hard-to-reach young people who did not think that university was necessarily for them. Those sorts of programmes, along with foundation courses and foundation years, could do so much to help students coming through further education and realising that, maybe, the next step should be higher education. We need to invest more in those sorts of things.

While I understand the many concerns of the thousands of students up and down the country, and sympathise with their calls for a higher education system that is suitably funded while delivering on students’ expectations, I believe that the answer lies in a multi-step approach. First, as I have alluded to, I am committed to abolishing the fee regime in its current guise. That means that debates regarding repayment rates, characterised by Martin Lewis as regressive and a “breach of natural justice”, would be consigned to history. Graduates would no longer be burdened with as much as £57,000 in graduate debt and would start their working lives free from the stress and financial pressures of repayment.

We have only to look at what is happening on campuses across the country and the immense mental health pressures faced by so many young people, due not only to the pandemic, but to the issue of graduate employment opportunity and having that debt hanging over them. Those of us who have ever been in serious debt at any stage of our lives know that it is an awful place to be. Those of us who have ever been in serious debt at any stage of our lives know that it is an awful place to be. The hon. Member for Ipswich described the prospect of having the debt hanging over him and the difficulty it posed when getting a mortgage or other loans. It can make life incredibly difficult, so it is far easier not to consider it. The Government need to rethink their approach to the availability of maintenance grants. That might finally tilt the balance in favour of the thousands of working-class men and women on free school meals, who have been denied the belief that they can progress to higher education due to a burdensome funding model.

I want a culture change to complement a fee system change, such as adequate student mental health provision and funding, and tackling those rogue student landlords in private student accommodation who give the sector a bad name. There is much to address to improve the lives of our students. I want more teachers and lecturers on full-time secure employment contracts, to reverse the drift towards casualisation that we have witnessed in the past decade.

Following the events of the past 18 months, it is critical that the Government work collaboratively with the sector to address the many issues it faces. Through the co-operation of the National Union of Students, individual student unions, the University and College Union and the institutions themselves, so much positive work has been done on our campuses to get through the worst difficulties of the pandemic. We have seen some interesting initiatives, such as the Welsh Government’s support for institutions to improve ventilation in lecture theatres. Those sorts of ways that the Government can help have the effect of shoring up the entire student experience.

I believe the petition is a great call for change. While replacing the student funding model will naturally bring about an improvement in the student experience, it can be fully revolutionised only through a plethora of other initiatives that directly seek to ease the burdens on students. If any generation deserved to have their call for change heard, it is this generation. No wonder almost 600,000 students signed the petition. I add my congratulations to the petitioners on achieving this debate, and I thank the House authorities for allowing it to proceed. I look forward to working with the sector, the students and all stakeholders in the coming months, to address some of the cries for change. I very much see this debate as the first step in that process.

[The Minister for Further and Higher Education (Michelle Donelan)]

I thank my hon. Friend the Member for Ipswich (Tom Hunt) for opening the debate, which I am very pleased to participate in. The petition, as we have heard, considers a wide range of topics, from tuition fee levels, representation of students in Parliament and accommodation costs to the impact of covid-19 on the prospects of future graduate careers.

My hon. Friend the Member for Ipswich passionately spoke about the importance of the Government’s skills agenda and investment in alternative and vocational options, as well as higher education, which I will come back to. It has been a privilege to work so closely with the higher education sector; it has enabled me to see at first hand the extraordinary way in which students have dealt with the challenges they have faced over the last 20 months. Many Members spoke about those challenges, from the restrictions placed on face-to-face teaching to being in lockdown away from family. All that is on top of students’ fears and concerns for their own health and that of their family and friends, which will be familiar to us all.

I want to put on the record that the resilience that students displayed has been nothing short of extraordinary. Being their voice in Government during this difficult time has been a privilege. I want to sincerely thank staff across the higher education sector, who have faced unprecedented challenges and have shown that they are resilient, resourceful and innovative while maintaining the delivery of teaching and learning at the quality expected by the Government and the Office for Students. I have visited numerous universities and have spoken with many staff over the past 20 months, and I have heard incredible stories of how staff worked to move content online and adapt their teaching almost overnight. To staff and students, I say a heartfelt thank you.

However, I am not here just to thank the sector. Members will be aware that I pledged at the very start of the pandemic to prioritise getting students the support that they need, and students and staff have been given unprecedented financial support as a result. I thank all Members who supported those important interventions. We made an additional £85 million of student hardship funding available for higher education providers to distribute to students in the academic year 2020-21, in addition to the sizeable £256 million of student premium funding already available for providers to draw on to support students experiencing hardship, or to provide mental health support. We also worked with the Office for Students to create a new mental health support platform with £3 million of funding.

Last week, I announced that the maximum under-graduate loans for living costs will be increased by a forecasted inflation of 2.3% for loans issued in the 2022-23 academic year. The same increase will apply to the maximum disabled students’ allowance, to the grants for students with child and adult dependants who are also attending full-time undergraduate courses, and to the non-means-tested loans that the Government provide for students undertaking masters and doctoral degree courses. Such statistics are easy to overlook when they are fired off in debates, but those with students in their constituencies, as we all have, will know the very human and personal stories that make those financial interventions so important.

The first point raised in the petition is the important and complex issue that we have heard about regarding the rate of tuition fees. The petition asks for the maximum cap to be reduced drastically from £9,250 to £3,000. I understand the importance of, and the motivation behind, that view. Like those supporting the petition, the Government want a fair system that offers value for money; is sustainable; and provides enough funding to support high-quality teaching that leads to good outcomes, meets the skills needs of our country and maintains the world-class reputation of our higher education providers. Tuition fee levels play an important part in all those goals, but when we boil it down we cannot get around the fact that tuition fees must be at a sufficient level to achieve those aims. That leads me to the most obvious point: the funding implications of reducing tuition fees by so much.

Higher education providers in England gain, on average, approximately half their income from student fees. Therefore, reducing fees by more than two thirds to £3,000 for domestic students would create an estimated funding loss of a staggering £6.5 billion per year. Total funding for university courses would cover less than 40% of their cost of delivery in that scenario. Positive motivations aside, the consequences would therefore be disastrous for the higher education sector. We would force many providers out of the market overnight, and remaining courses would not have the funds required to deliver the high-quality tuition and experience that students deserve.

The only other option would be to force the taxpayer to pay the difference. To me, that prospect seems incredibly unfair, given that graduates will go on to earn, on average, £100,000 to £130,000 extra during their working lives than non-graduates—a point that my hon. Friend the Member for Ipswich made. That brings me to my next concern: many of those who would benefit would be the higher earners, and it is likely to make university harder to access and to excel at for the lowest earners. Rarely do I agree with the hon. Member for Warwick and Leamington (Matt Western), but I do on that point.

Our student loans system, on which the vast majority of students rely, is rightly based on the principle that those who gain the most will make the greatest contribution. That is why the size of an individual graduate’s loan repayments depends on their earnings—if they earn a lot, they pay more; if they earn less, they pay less. In many cases, people do not finish paying off the debt. A reduction in the amount that graduates need to pay back through a tuition fee cut would therefore benefit higher earners by thousands of pounds, while lower earners would see little to no change on their repayments. In fact, the very lowest earners would see no financial benefit from this at all.

Worse still, those thousands of pounds, now in the pockets of already high earners, would have come at the expense of universities, who would no longer be able to give such generous financial support and bursaries to students. People who know me well will know that I fought tooth and nail for better access and support for disadvantaged students, so the idea that we would do anything that would take away from their ability to go to university if they desire to do so is completely contrary to my views and those of the Government.

I also remind the hon. Member for Poplar and Limehouse (Apsana Begum) that, actually, we have record numbers of disadvantaged students who have gone to university this year, and we had record numbers of disadvantaged students going to university last year. In fact, a disadvantaged student in 2020 was 80% more likely to go to university than they were 10 years ago. That staggering statistic shows that the impact of tuition fees is certainly not the one being painted by Opposition Members.

As I mentioned, I think we all have very similar motivations for being here today. My focus, when looking ahead, is on how we can get the best value for students and support the most disadvantaged while maintaining the highest quality and standards that we are internationally renowned for. Although a cut in tuition fees would not help, it is also clear that raising fees would be equally wrong, so last week I was pleased to confirm that tuition fees will be frozen for the fifth year in a row. Compared with a situation where tuition fees had risen in line with inflation each year, that freeze means that a student on a three-year degree course has saved over £3,400—a real-terms reduction that I am sure supporters of the petition would welcome.

[Carol Monaghan]

May I ask the Minister when we are likely to see the recommendations of the Augar review implemented, including significantly reducing the student fees that are being paid?

[Michelle Donelan]

We are considering the remaining recommendations made by the independent panel chaired by Philip Augar, including on fees, funding and student finance, and we plan to set out our full conclusion on that shortly. I urge colleagues not to refer constantly to media speculation, because we have not yet made an announcement, but it will be coming shortly.

Following on from that, as part of our consideration of the recommendations made by Augar, I and my ministerial colleagues are still in the process of building a post-18 education system that massively improves the value and quality of learning and equips learners with the skills they need to get those high-wage, high-skills job opportunities. The way we drive up quality in our higher education system is not by diverting money from universities to high earners, but by investing in a system that focuses on high-value skills. That is the way to promote genuine social mobility. We have already delivered on several of the recommendations made by Augar in our first response to that, including investment in the further education estate, increasing funding to 16 to 19-year-olds, a commitment to introduce a lifelong earning entitlement and the Prime Minister’s lifetime skills guarantee.