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Postgraduate loans: a case of too much education?

“Education, education, education”, the mantra that helped to sweep Tony Blair to power in 1997, remains almost as salient today as it did 17 years ago. This idea, that education is the key to both greater prosperity and greater social mobility, has transcended successive governments and has been prominent in British politics for almost half a century. The systematic expansion of higher education has been a significant part of the UK’s dogmatic commitment to endowing ever more young people with higher level academic qualifications. Now George Osborne has embarked on an expansion of this policy, by offering loans of up to £10,000 for postgraduate students undertaking teaching-based, rather than research-focused, degrees.

On the face of it, this seems to be both a fair and politically expedient move. Given the de facto requirement of postgraduate study for an increasing number of jobs, the inability of many poorer students to obtain funding is becoming a substantive barrier to social mobility. Prospective postgraduates have so far found the task of securing loans from the two graduate loans providers, Barclays and The Co-operative, to be an onerous one. Last year for example, fewer than half of all applicants for a government-supported career development loan had their applications approved. The loan scheme proposed by the Chancellor may have some success in addressing this problem. Income-contingent loans operating in a similar fashion to undergraduate loans will enable bright students of all backgrounds to pursue further study.

But can we be sure that providing a loan facility for prospective postgraduates will in fact achieve its ostensible purpose of strengthening the ladders of social mobility? The average cost of a postgraduate degree was £5,680 last year. Factor in living costs and it remains the case that a significant number of potential students will remain incapable of covering the cost of studying for a master’s degree. For students who are unable to access other forms of support, such as scholarships, fee-waivers, or indeed the helping hand of a generous parent, the better, more expensive postgraduate degrees will remain a distant possibility. The benefits of the new loan scheme may accrue to more affluent students, and the problem is likely to be exacerbated by institutions raising tuition fees in response to increased demand. This phenomenon has already been witnessed in the US, where universities have largely captured the benefit of increased financial aid for themselves. The end result is that efforts to promote the affordability of higher education have been somewhat undermined.

The expansion of postgraduate education will not necessarily lead to a better educated and more productive workforce either: superior qualifications on paper should not be conflated with better practical skills. There is concern that postgraduate study will simply become the norm in much the same way that progression to undergraduate study has become the norm for the average school leaver. Nearly 50% go on to university at present, with that proportion increasing virtually year-on-year since the 1960s.

A degree, for many individuals, does not prepare them with the skills that are required in the workplace. Too many bachelor’s degrees have nullified their worth and compromised academic standards, with a significant proportion of graduates still unable to distinguish themselves from their competitors in employment markets. There is a considerable risk that a similar situation will arise with regard to postgraduate degrees; the benchmark for a professional career will simply be raised from a bachelor’s to a master’s degree, with little discernible effect on the skills and productivity of employees.

Offered a loan, many more graduates will undoubtedly leap at the chance to continue their studies for an extra year. Their reasons for doing so may well be spurious in numerous cases, however, with students pursuing postgraduate study because they are yet to decide on a career path, or because they wish to avoid paying off their accumulated student debt for another year. £40,000 in borrowed money will quickly become £50,000, but for students the idea of delaying repayment will hold considerable appeal.

Introduce a postgraduate loan facility, therefore, and you will expand postgraduate education, inevitably leading to a dilution of quality. The focus should be on improving access for poorer students, instead of simply expanding access for everybody. For the brightest students passionate about pursuing further study, the government evidently needs to ensure that it facilitates their engagement with postgraduate study, regardless of their circumstances. But rather than introduce a new loan facility, the government, in collaboration with universities, should review and expand the existing provision of scholarships and fee-waivers, so that more of the best students have access to funding. More needs to be done in order to ensure that there are adequate funding opportunities for less affluent students. Broadening the postgraduate loan system, however, is not the answer.

 

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