Augar’s progressiveness will require careful scrutiny

In the 18 months since the announcement of the government’s review of post-18 education and funding in England, led by Philip Augar, there has been plenty of healthy debate about what a good outcome should look like.

Organisations from within the sector and beyond have all set out their stalls, and there has been a steady leak of proposals from the government to periodically reignite the conversation.

Proposals have ranged from a higher education system in which tuition fees are based on the average earnings for the subject and institution in question to a system in which fees are abolished entirely.

And, as so often in politics, almost every organisation has tagged its proposals as “progressive”, even when they directly conflict with proposals from others also carrying this label.

While some of this may just be a matter of perspective, more significantly it reflects a misunderstanding of the system and the evidence about the distributional consequences of the options on the table.

Much of this misunderstanding comes from considering proposals and their target populations in isolation. For example, some consider only the impact on graduate debt, while disregarding how much will be eventually paid. Others consider the distributional impact within the higher education system, but ignore the wider population, including those studying in further education. Still others expect the higher education system to close the education gaps that emerged so much earlier in young people’s lives.

Regarding student loans, prominent proposals include the removal of real interest rates charged on loan debt and a reduction in the fee level. It might be assumed that these changes are progressive, but such an assumption would be mistaken. Only wealthier graduates begin paying off the outstanding student debt from higher fees or interest rates before it is written off, so it is only those wealthy graduates who will benefit.

Even the reintroduction of maintenance grants is not unambiguously progressive. While targeted at those from more disadvantaged backgrounds, the bottom 60 per cent of graduate earners will see no benefit at all because they would never have paid off the part of the loan that would be converted to a grant. The top 10 per cent of earners would realise almost all the gains from such a change.

Additionally, it is not clear that the removal of grants in 2016-17 has made disadvantaged young people less likely to access higher education.

What may be even more concerning is the knock-on effect of these proposals in a review that is seeking to be largely cost-neutral. As all these proposals reduce graduate contributions, it is possible that the government will adapt the remaining loan terms to recoup the difference from graduates in other ways.

Examples would be to reduce the income threshold at which repayment begins, increase the amount paid off each month, or increase the number of years before the outstanding debt gets written off. Yet all these “solutions” would increase the contributions from middle- or low-earning graduates with little or no impact on high earners.

It therefore seems that many prominent “progressive” proposals are actually anything but – and may lead the government down a path of having to recoup costs in even more regressive ways.

However, even here we risk falling into the trap that so many others have fallen into, by ignoring the bigger picture. First, progressiveness is not the only outcome the review should seek to achieve, and the government will need to balance the progressiveness of the system with one that ensures financial sustainability for universities.

More pertinently, equity within the graduate population is not the only consideration here. What about those young people who have not directly benefited from higher education but will contribute through their taxes regardless? What about those who have taken post-18 qualifications in further education, often funded at lower rates?

To ensure that this bigger picture is considered, the Education Policy Institute, in its new report on post-18 funding, is calling on the government to publish a full distributional analysis of the Augar review’s proposals. This should include both the graduate population and those taking non-academic pathways in the further education sector.

The government should ultimately be looking to provide answers, rather than provoke further questions. Failure to set out the consequences of its plans will mean that debates on their progressiveness risk becoming even more insoluble.

David Robinson is director of post-16 and skills at the Education Policy Institute and co-author its report Post-18 Education and Funding: Options for the Government Review, published today.