Government should act to combat student debt

As higher education caters for increasing numbers of students, the funding situation is becoming critical, writes Diana Green.

Higher education confronts government with a dilemma. As with the railways, years of declining public funds have left an infrastructure that is visibly crumbling as it tries to accommodate growing demand. Like the National Health Service, there is a tension between investing in medical research and leading-edge healthcare and the need to increase through-put for the growing numbers demanding treatment.

To date, universities have failed to convince the government of the seriousness of the situation, except in respect of the science base. Sadly, the general case for increasing investment in teaching and learning has been obscured by a successful campaign centred on the needs of those universities aspiring to be "world class". This has taken the government's eye off the more fundamental problem of how to reverse the progressive impoverishment of the student experience and achieve its target of widening participation to 50 per cent of those aged under 30.

The funding options review undertaken by Universities UK might help. It has identified a substantial and growing funding gap. The principle of students making some contribution has been widely accepted (although not by students) and the argument is largely about when and how. But the central message is that the funding gap can be bridged only by shifting the balance between public and private contributions. All options require an increase in public funding if the circle is to be squared.

The review has focused on funding from an institutional viewpoint. A parallel study has been commissioned to examine funding from the students' viewpoint. It will examine the impact of debt both on access and on the progression and achievement of registered students.

Student debt might be described as "the dog that has not yet barked". It is a complex and controversial issue, muddied by debates about top-up fees. What counts for the student is total indebtedness - the balance between expenditure and present income.

Average debt on graduation is rising: Barclays Bank estimated it at £5,286 in 1999, while a recent Department for Education and Employment study estimates that average debt will rise to £13,000 by 2003. Recent studies show that debt will be more or less of a problem for students depending on region, social class, age and ethnicity.

For a full-time undergraduate at a London university, accommodation costs wipe out nearly 90 per cent of the maximum student loan. Without access to a hardship fund or family support, a term-time job is essential.

As the DFEE study shows, lone-parent students owed on average £4,747 at the end of 1998-99 - double the average level of student debt. These debts accumulated because lone parents relied on student loans and were likely to supplement their income through commercial credit. Some 77 per cent of this group felt that financial difficulties had negatively affected their academic performance (compared with 60 per cent of all students) and they were far more likely to drop out for financial reasons.

Attitudes to debt (and credit) are similarly differentiated. The Mori Student Living Report last month found that although 36 per cent of those surveyed were "seriously worried" about the debts they were incurring, 46 per cent of these were from social groups C2DE.

There is a parallel differential effect on institutions, too. Those located in metropolitan areas that have successfully widened participation face a greater challenge in limiting dropout rates. It is these institutions, too, that are most exposed to another unplanned consequence of the change in student financing - the moral dilemma of excluding growing numbers of students not for academic failure but for inability to pay.

What can be done? Universities have responded by establishing student support systems, often in partnership with student unions. The range and scale of support has grown, especially financial advice and the administration needed to manage the growing number of means-tested student hardship schemes.

One Midlands university provides a range of schemes for low-income students including interest-free loans to those facing delays in receiving student loans. Several universities provide fee-waiver and/or bursary schemes for those not qualifying for the government-funded schemes.

Many universities have recognised students' need for access to paid (term-time) employment. My university employs students directly and provides a brokering service to local employers through a university job shop. Edinburgh and Sussex universities seek jobs with local employers delivering higher rates of pay to reduce the number of hours students need to work.

Napier University recognises that students' necessity for paid term-time employment should be supported through integration with academic work. A credit-bearing module has been established that requires students to provide evidence of higher-level learning gained as a result of their paid employment.

But all this is just tinkering. Further expansion cannot be delivered on the cheap. And we must start to tackle in a more creative and systematic way the wider implications of growing student debt.

Diana Green is vice-chancellor of Sheffield Hallam University, a member of the Universities UK funding options review group and chair of the steering group of the Universities UK student-debt study.