Almost half of graduates believe they will never repay student loan, new report reveals

A recent report by the Office for Students (OfS) entitled ‘Value for money: the student perspective’, has highlighted the problems regarding the education and confidence of young people on issues of student finance.

The study, produced by a consortium of students’ unions, assesses the opinions of 6,000 young people including school leavers, current students and recent graduates. The aims of the report were to better understand “student perceptions of value for money” in higher education, with nearly half of recent graduates revealing that they believe they will never be able to fully repay their student loan.

The study compares results from English and Scottish students, different types of education providers, course and students “from all backgrounds” to explore differences related to gender, ethnicity, socio-economic profile and nationality. The report then goes on to question what exactly tuition fees should cover, how well-informed students are about fees and loan repayments and how these problems can be better addressed.

The aims of the report are to better understand “student perceptions of value for money” in higher education

By comparing the results of school leavers, current students and recent graduates, the report has been able to assess the changing perceptions of student loans and value for money throughout their higher education careers. Where only 10% of school leavers believed they would be unable to repay their loans within 30 years, these numbers rose to 28% of current students and 42% of recent graduates feeling that they will never fully pay back their loans.

The Director of the Higher Education Policy Institute (HEPI), Nick Hillman, has been vocal on this issue. He believes that these figures reveal a lack of education and information amongst young people before starting university, as it is once they arrive at university that they begin to lose confidence in their ability to repay loans and be financially stable. He stated: “Most people say they go to university because they want to get a rewarding job, but this suggests their perceptions change once they have graduated.”

Last year, a report by the Institute of Fiscal Studies (IFS) showed that under the new system of tuition fees imposed in 2012, 77.4% of recent graduates will never fully repay their debts, a sharp rise from the 41.5% under the previous system.

Most people say they go to university because they want to get a rewarding job, but this suggests their perceptions change once they have graduated

— Nick Hillman

Other major findings show that only 38% of students believe their course offers good value for money, and just 54% found that their overall investment in higher education was justified. Factors that demonstrate effective value for money were revealed to be: quality of teaching, fair assessment, helpful feedback and learning resources. There is a clear wish for greater transparency about where and how their money is spent, as well as more information about additional costs such as on accommodation, society membership and books.

Chief Executive of the OfS, Nicola Dandridge, has commented: “Higher education providers should carefully consider the findings from this report and consider how they can improve transparency and clarity… and most of all how they can ensure that every student has a fulfilling experience of higher education.” Such views have been echoed by students’ unions across the country.

Middlesex Students’ Union Vice-President Joe Cox said that their survey showed students were: “concerned about, and not confident about, the value for money they are receiving”, as well as their ability to repay their loans later. He claimed: “It’s now time for providers to open up to students and the public about where the money goes in meaningful ways, allowing them to compare costs and hold Universities to account for waste.”