In this month's duel, David Willetts and Katie Morley go head-to-headby David Willetts, Katie Morley / March 20, 2018 / Leave a comment
David Willetts: Yes
There is a new political fashion—“Eduscepticism.” The edusceptics dismiss higher education in a way they would not dare dismiss any other educational stage. In the past, the sceptics argued against raising the school leaving age to 16 saying it was a waste of time. The sceptics today are just as wrong. The evidence is overwhelming—going to university is good for you—and good for the rest of us.
Because we are again arguing about how to pay for university there is a focus on economic gains for individuals. Graduates enjoy higher employment rates and higher pay. The average graduate under 30 earns £25,000 as against £19,000 for a non-graduate.
But the economic benefits go much wider. Universities boost city economics—towns and cities from Chester to Exeter are reaping the benefits from having a growing university. Evidence from the United States shows that, in towns with lots of graduates, non-graduates earn more as well and the Exchequer gains from the increased tax. The OECD even uses the proportion of the workforce who are graduates as one of their indicators of an economy’s long-term growth rate.
There are non-economic gains too—better health, improved life expectancy, less depression and obesity. And society reaps wider benefits with higher tolerance, lower crime and a greater propensity to vote.
The edusceptics say this is due to “prior selection”—university students being luckier and more able. But, where possible, researchers compare people who are similar such as identical twins, or people in systems that allocate places by lottery. And isn’t it arrogant to say graduates are like this anyway? Far better to recognise that three years away from home during these formative years changes you. I argue in my book that they change you just as much as the first three years: you do actually learn stuff. Moreover it’s the only stage of education where people from tough areas out-perform others. If only other stages of education could achieve the same.
Universities have their faults and can let people down. But one survey of graduates found 96 per cent of them would still do it if they had their time again.
Katie Morley: No
In 2012, when the £9,000-a-year fees were introduced, 53 per cent of students thought university was “good” or “very good” value. But in 2017 the figure slumped to its lowest level of 35 per cent, according to the Higher Education Policy Institute.The idea that university degrees are poor value for money is far from a passing idea. It is an uncomfortable reality for the thousands of young people being herded into mediocre courses costing tens of thousands of pounds—when fees and living expenses are added up, as much as £50,000. Why do they go? There’s no better alternative—just ask the students.
Furthering people’s education is obviously positive, but it comes at a phenomenal cost to young people, for whom a lifetime of debt is now considered normal.
There is a growing feeling among prospective, current and former students that the system is a rip-off. They face relentless repayments of well over £150-£200 a month at a time when they are saving for a house or starting a family.
They are paying for our universities to offer poor value, time-wasting degrees to graduates who will not stand out from the crowd in the jobs market because one in two people now has one.
According to a study by the Institute for Fiscal Studies, graduate earnings for men at more than one in 10 universities and colleges are lower than for non-graduates. These low-earning graduates might not repay much of the loan themselves, but you can be sure that the taxpayer will end up footing the bill if they don’t.
There are many people for whom going to university will be financially worthwhile. But it would be better—and cheaper—for everyone if we stopped pretending that these £50,000 Mickey Mouse degrees are benefitting anyone apart from universities.
First, on funding—if you graduate and end up in a low-paid job you don’t repay. You only pay back at 9 per cent on earnings above £21,000, and that will soon rise to £25,000, so someone earning £30,000 a year will pay less than £40 per month. The obligation to pay at that rate is not a “debt” like an overdraft or mortgage. It is more like an obligation to pay income tax.
More than 80 per cent of students say they are satisfied with their university. Most graduates say that if they had their time again they would still go, though quite a few say they would do a different subject. That arises from England’s real educational scandal—early specialisation that requires 16-year-olds to narrow their range of study.
Even if none of this adds up to the lurid picture of young people burdened by debt, it would be bad news for our economy if graduates were doing as badly as you claim. But at every stage in the growth of the number of students we have been warned that too many are going with no educational benefit. Kingsley Amis started it in the 1950s when he denounced the surge of grammar school boys. But those graduates go out into the world and earn more than if they had not gone. Earnings for all young people have underperformed since the financial crash but graduates do better than non-graduates. And that is not just on earnings but other measures such as health and wellbeing.
There are universities, just like schools and colleges, that need to raise their game. But to denounce “Mickey Mouse” degrees is misleading if by that you mean vocational courses. Oxford and Cambridge suppressed the creation of new universities for 600 years and as a result we have been left with the idea that a “real” university must be “a place where nothing useful is taught.” But more than half of students are doing vocational or business courses that range from nursing to business studies for a specific sector—hence Birmingham’s highly competitive Golf Studies.
It is wrong to assume that such subjects have no place in the university when they are actually part of mass higher education. We got to mass secondary education in the 20th century and, like most other western countries are travelling to mass higher education in the 21st. That extension of more education to more people is a widespread, irreversible and desirable trend.
My point is not that there is no educational benefit in going to university, but too often the benefit is less than the cost to individuals and taxpayers.
Vocational courses—nursing, medicine, law—are of course highly valuable and are not what I mean by “Mickey Mouse” courses.
More worrying are courses taught at low-ranking universities, in softer subjects like social studies (just 27 per cent of social studies students think their course is good value for money). These courses are why we are all overpaying for universities.
The view that student loans are “fluffy and friendly” debt because they work more like income tax than payday loans is wrong. I graduated in 2010 and at the age of 29 I see a significant amount deducted from my pay. When I took a student loan, I was told it would not affect my ability to do things like get a mortgage. Well, it turns out it does. Banks assess how much you can afford to borrow based on your net income. For the vast majority of students the new system will impede their ability to buy a home, afford to have children, and save for a pension, for their entire working lives.
We also need more honesty about the impact that graduates’ reduced spending and saving power is likely to have on our economy over the coming decades.
Meanwhile we have a ridiculous situation in which cash-strapped students are funding grossly inflated banker-style salaries for Vice-Chancellors.
Students, whose funding arrangements leave them with an average of £8 a week to live off, will be incensed reading about Glynis Breakwell, the Vice-Chancellor of Bath University with a pay package of £468,000. She has been at the centre of an entirely justified media storm.
Coincidentally, Vice-Chancellors of some of the poorest-performing universities are among the highest paid, further cementing the idea that so-called Mickey Mouse courses are a rip off. How anyone can think this structure does not need addressing to give students better value for money I fail to see.
There is more to university than the design of the student loan system, but I do just need to get the facts straight. Under Labour, graduates paid back at 9 per cent on earnings above £15,000. The Coalition raised that to £21,000. Graduates will pay more and for longer but the monthly payments are less. One reason we did that is that mortgage lenders told us they understood that the student loan was not conventional debt so they treat payments as a fixed outgoing and that is what we wanted to bring down. The prime minister has now announced that the threshold is going up to £25,000. That means a graduate earning £30,000 a year will pay back less than £40 per month, modest compared with the other barriers sadly stopping young people getting on the housing ladder.
The pay of Vice-Chancellors arouses much emotion—it is an example of the changing character of the university. A medium-sized university now has a budget of over £300m. A handful operate at more than £1bn a year. They are the most important economic players in many towns and cities and their biggest exporter too. Higher education is a global industry and universities in the US and Asia come recruiting academics with salary offers much greater than what we pay here.
I understand why people are ambivalent about these changes, but the rise of the university is a key feature of modern knowledge-based economies. But universities have deep roots. They stand for the growth and transmission of knowledge and critical thinking. At their best they offer research excellence, access for students from a wide range of backgrounds and teaching excellence—values not captured in conventional rankings. They are far from perfect. But we seem to be moving from ill-informed reverence to ill-informed hostility. They cannot be exempt from relentless scrutiny but neither the graduate repayment system nor Vice-Chancellor’s pay nor young people choosing to do social studies are reasons to trash them.
The growing hostility towards our university system is entirely just, and the recently-announced government review could not have come soon enough.
Change is needed to turn an expensive mass-market degree factory into a model where every student gets a valuable qualification at a reasonable cost. In recent decades fees have risen from £0 to £9,250 a year and help for the poorest students has been scrapped. And as if this weren’t enough, some fees have funded huge 25 per cent pay rises for university bosses.
A lack of careers guidance in schools means students don’t have the confidence to say no to going to university. Many would be financially far better-off learning a trade.
The way student loans have been pushed on to millions of financially-naive young people is one of the biggest financial scandals of our time. They are at the mercy of the government, which can change their repayment terms at any time, something that would never be allowed if they had been provided by a private, regulated company.
Large debts are crippling people’s ability to save. For example, a repayment of a £45,000 loan over 30 years would, if invested in a pension at 5 per cent a year, grow to £194,500—five times the size of the average person’s pension pot.
Can it really be right that we are denying graduates this financial security in later life by forcing them to pay for the failures of the system? Universities represent fabulous value for the people at the helm of these institutions, who are allowed to lap up tuition fees to boost their bloated salaries.
On their watch, students and their families are being financially ravaged for the sake of degrees many of which—although it remains an unpopular thing to say—will turn out to be a waste of time.