Ministers ‘might as well bite bullet’ on retrospective loan hike

Whether ministers “bite the bullet” by retrospectively increasing student loan costs for existing borrowers is a key issue to be addressed with a consultation on English sector reforms looming.

Although the Department for Education appears to have aimed for a full-scale White Paper on a package of higher education policy changes, sources suggested that it had run out of time to secure the cross-government agreement needed to launch such a plan for legislation before Christmas and was instead likely to publish a consultation, expected soon.

Some think the Treasury could simply announce a planned move on the student loan repayment threshold – seeking to lower it from £27,295 a year to an expected level of £22,000 – without consultation. Others suggest that the DfE has repeatedly told the Treasury that there must be consultation.

The consultation was expected to cover the DfE’s aim to introduce a minimum entry requirement to qualify for student loans to study at higher education institutions, potentially asking for views on whether to set that bar using GCSE English and mathematics grades, or tariff scores in A-level and equivalent exams.

And the consultation was expected to seek views on the details of the government’s planned lifelong loan entitlement.

Some think that the DfE could also include in a consultation the idea of using student number controls as a policy instrument to bear down on what it terms “low value” courses.

On loan changes, the government faces a choice on whether to lower the repayment threshold for future students only, or also do so retrospectively for all those who have taken out loans since fees were trebled to £9,000 in 2012. A retrospective hike would anger existing students and graduates hit by such a change.

“Any change to the threshold will be unpopular,” said Nick Hillman, director of the Higher Education Policy Institute and a former adviser to Lord Willetts in his time as Conservative universities minister. “This means that implementing a threshold change for new students only might not be worth the political pain. The extra revenue would take years to arrive and be much smaller than if the change were made for all post-2012 graduates.

“So if you are going to do it, you might as well bite the bullet or – to mix my metaphors – go the whole hog.”

Earlier this year, Hepi published analysis suggesting that dropping the repayment threshold to £19,390, the level at which loans had to start being repaid before £9,000 fees were introduced in 2012, could cut the public cost of loans by almost £4 billion for one cohort.

“My view is that education spending should not be cut in a crisis but tweaking the repayment threshold is better than other options for saving money would be, such as cutting [student] places,” Mr Hillman added.

Meanwhile, on a minimum entry requirement, DfE figures show that 30 per cent of pupils with special educational needs gained five GCSEs at grade 4 or above, including English and maths, in 2019-20, compared with 74.6 per cent of pupils without.

Simone Aspis, campaigns and policy coordinator at the Alliance for Inclusive Education, said there was “deep concern” about what a minimum entry requirement “might mean for disabled students” and those with “dyslexia, learning difficulties, dyscalculia or autism”, who are “less likely to get GCSE maths and English because the nature of their impairment puts them at a disadvantage”.

An entry bar could mean that, in terms of accessing higher education and many professions, “the door would be shut” for them, she warned.

john.morgan@timeshighereducation.com