Fair funding for all

By Andrew Lomas / @AndrewLomas

Higher education funding has been under pressure recently; the real terms reduction in the Higher Education Funding Council for England grant for institutions across England has caused much gnashing of teeth and wailing, both from the NUS and my own union the UCU – let alone the assorted Vice Chancellors and profusion of groups representing the sector. As someone who teaches at one of the affected universities, you could perhaps expect my response to all this to be along similar lines; maybe I could squeeze into a Spiderman outfit à la Father’s for Justice and handcuff myself to Peter Mandelson until he changed his mind?

The difficulty of finding superhero costumes at late notice aside, though, I’m a realist. Putting it starkly, the Government is borrowing a huge amount of money each month to keep the economy going; much of this deficit is structural (i.e. not related to the contraction in the tax base), so I couldn’t in good conscience call for my sector to be exempted from the pain that the rest of the public sector will experience over the coming years.

The question is, then how do we make life easier for universities whilst not burdening the Exchequer? What if there was a way of making more money available for Universities by extending student loans and grants to part-time students, widening the participation rate and reinforcing the government’s lifelong learning agenda, at no net cost to the taxpayer?

Million+ have recently published a report, Fair Funding For All, that achieves all of these goals. Ending the unfair difference in funding arrangements (currently part-time students have to pay fees upfront and do not have access to the student loans and grants available to full time students) between part-time and full-time students is a desirable social aim in and of itself, given that a large number of part-time students would otherwise not participate in HE. Add into the mix the fact that the 3.4 million unskilled jobs currently in the economy will dwindle to 600,000 by 2020 and there becomes a strong economic imperative to making HE more accessible. In short, making student loans and grants available to all undergraduate students is a stark way of demonstrating that economic efficiency and social justice, the hallmarks of New Labour, can still be married together neatly, even in an era of austerity.

And so we come to costs and paying for all of this. Million+ estimate that making loans and grants available to part-time students would cost £158m: at about 1% of the current budget deficit, this is small change. But I did say that this wouldn’t cost the taxpayer anything so I’ll stick to my word.

Instead, this £158m could be covered by increasing the interest on Student Loans by 0.5%. The benefit to universities would be an extra £91m a year from the extra tuition fee income they would receive, whilst we simultaneously entrench the principle that HE is free at the point of use by scrapping the requirement for part-time students to pay tuition fees upfront.

Above and beyond this, there is the additional option of extending the graduate repayment period to 35 years from 25 years (in international terms a short period) and charging up to a maximum real rate of 2% on student loans. Taken together, these measures would make available an additional £1.09bn of funds for investment in a sector that is absolutely critical to the long term future of the British economy.

I don’t know if Ed Milliband is a regular reader of my writing (if not, he doesn’t know what he’s missing) but Fair Funding for All is affordable, achieves desirable social and economic goals, and frees up extra money for a key sector of the economy. Surely, then, it’s worthy of inclusion in the manifesto?