Photo by Ben Duchac on Unsplash
Photo by Ben Duchac on Unsplash

The Augar Report: why it does not benefit students

The independent report on post-18 education commissioned by businessman Phillip Augar has been released, which seeks to provide recommendations on improving education and training opportunities for lifelong learning, as well as rebalancing resources between further and higher education. The report suggests that the cost of tuition fees should be lowered to £7500 from £9250, and that repayments should continue for 40 years instead of 30 years after graduation. The report also stated that the maintenance grant, which was scrapped in 2015, should be reinstated for the poorest students to the value of £3000 so that their overall debt is massively reduced. While Theresa May has stated that she is in full support of the Augar Report, she is to resign on the 7thJune 2019 so it will be up to the new prime minister to decide.

On the surface, the Augar Report appears to be in support of university students, who currently pay £9250 per year if they are a British national, as their fees would be reduced to £7500. If maintenance grants are reinstated and the interest rate remains at the rate of inflation, rather than inflation plus 3% added on, then the Augar Report seems like a good deal for students.

There is, however, a catch. University students would be making repayments for 40 years rather than 30, resulting in many students paying off their fees till students are in their 60s, before it is written off by the state. According to Augar’s estimates, the reforms would result in wealthier students being able to pay off their loans before the 40-year period at a lower rate than poorer students, who will have to pay for longer throughout their lifetimes, particularly as their loans are affected by inflation. According to the analysis by the Financial Times, wealthier students would pay around £50,000 in their lifetime if they were to pay before the 40-year duration, whereas lowerand middle-income students would pay around £75,000 with inflation and interest. Thus, the repayments system would be regressive and benefit students who studied subjects such as Law and STEM subjects, putting arts and humanities subjects at a disadvantage.  Students would also start repaying when they earn £23,000 rather than the current level of £25,000, meaning that the cost per month would be raised from £0 to £15 for students who start on low incomes.

While the Augar Report argues for maintenance grants to be reinstated to alleviate the pressure on students from low-income backgrounds, it is highly unlikely that a loan of £3000 will result in fewer students from low-income backgrounds dropping out. Cutting tuition fees and giving a grant misses the point entirely. Many students from under-privileged backgrounds will still be forced to work multiple jobs around their degrees and are less likely to be able to access prestigious jobs as they lack the support or soft-skills required to get ahead. Therefore, while Augar argues that the maintenance grant will cancel out the disadvantages that students from under-privileged backgrounds face, the opposite is true, suggesting that reviewing the university system is about more than where money is allocated. An upheaval of the current system is required as Augar’s reforms only scratch the surface of the bigger underlying problem.

In fact, Augar’s report is only a new formula for funding, rather than a much-needed upheaval for further and higher education. Further education has been starved of funding and resources in recent years, particularly as all students are required to remain in education or training until the age of 18. The long-awaited report, which was pledged by Theresa May in the Conservative Party conference in 2017, is effectively all talk and no trousers, as it fails to address the injustices in the university system, particularly for poorer students who do not get out as much as they put in. While further education colleges would, in theory, see benefits of around £3bn per year in order to improve apprenticeships and vocational training, there is a risk that the bias would continue towards higher education in the job market, bringing little social and economic benefits to those who pursue a vocation, even if loans were available to all adults regardless of their age and job background. Matt Waddup, the head of policy at the University and College Union, has argued that the Auger Report seeks to “rob Peter to pay Paul” leading to cuts in university income which will impact the quality of teaching in Britain’s universities which will then reduce competitiveness of British universities abroad. Cuts to funding for universities and investment into further education does not rebalance funding but reinforces the idea that higher education is no more than a market from which money can be taken out at whim, leaving students and teaching staff at a loss, and research and development struggling.

While the marketisation of university education has resulted in issues such as grade inflation, higher numbers of unconditional offers and inflated vice-chancellors’ salaries, it is widely agreed that students should make some contribution towards their education, seeing as they are the primary beneficiaries. However, although there are positive externalities of consumption in education for all of society, through better jobs and opportunities that last for generations, the unjust nature of the Augar review must be addressed. The vision of strikes amongst university lecturers and the eye-watering bills that EU and foreign students receive are fresh in the minds of every university student, suggesting that not plugging the gap that universities will face will have an impact on the number of staff, the quality of teaching and resources available, and the research opportunities for academics. Furthermore, the panel for the Augar Report declared that the UK tax-payer should subsidise courses that “cost more to deliver”. The demonization of the higher education sector amongst politicians since 2010 suggests that a government subsidy is unlikely to be given, thus hurting students and damaging opportunities.

A proposed change that is likely to slip under the radar, yet have a substantial benefit for new students, is renaming the student loans system to a “student contribution system” which is a practical description of the system as contributions are paid like an additional tax, rather than a loan. Calling the contributions that students pay a loan has led to many students overpaying their student loan and losing thousands of pounds as they fear that they will be hit by heavier charges. More worryingly, the old name deters many students from low-income backgrounds from attending university as they worry that they will be unable to pay off their loans after graduation due to the lack of clarity at college regarding the system. Thus, explicit mention of the contribution that parents are expected to make up depending on their income will further create transparency in the system, particularly as the parental contribution is based on income and is often rather sketchy. Creating transparency of the reality of the system would create greater clarity in terms of what parents are expected to contribute and how they should plan for it, as well as encouraging many students from low-income backgrounds to attend university through greater knowledge of the system.

While the long-awaited Augar Report proposes beneficial changes such as lowering tuition fees, reducing interest payments on fees and re-introducing maintenance grants for students from less-privileged backgrounds, there is a clear catch, resulting in poorer students paying more than before and universities left severely underfunded as a result. The regressive effect of the new proposed system does little to address the inequalities in the current university system, nor does it tackle the disparities in the funding. This could reduce the competitiveness of UK universities as they hand over autonomy to the government in exchange for funding that they previously had. It is undeniable that the Augar Report, while filled with good ideas in isolation, is a wolf in sheep’s clothing overall and would reinforce inequalities in social mobility in the UK. The British university system is in need of an upheaval, and the Augar Report is the foulest way to do it.

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