Willetts: grade threshold for loans risks ‘two-tier’ system

Restricting access to student loans in England by prior attainment or graduate outcomes risks creating a “two-tier” higher education system in which the rich can “buy” places but the poor miss out, a former universities minister has warned.

Writing in Times Higher Education, David Willetts, who was universities minister between 2010 and 2014, says that, if students with low grades were barred from accessing student finance, “the children of wealthier parents could still go to university even if their grades were very low”.

This is because their parents would be able to pay their university fees up front. Families from poorer backgrounds are unlikely to have this option, and would in effect be barred from entering higher education.

Restricting access to student loans by prior attainment – potentially setting the threshold at DDD A-level grades or equivalent – is expected to be among the recommendations of the review of post-18 education in England.

But, Lord Willetts adds, this “would be a big barrier to mature students and pretty much destroy the rationale of the Open University unless the policy only applied below a maximum age – in which case it would seem tough on younger people”.

THE has reported that proposed exemptions for students from disadvantaged backgrounds with lower grades are said to have been under consideration by the review panel, led by Philip Augar, in response to concerns about the impact of a threshold on social mobility.

The idea of restricting access to loans to students on courses that can demonstrate good graduate earnings in the government’s Longitudinal Education Outcomes dataset has also been seen as an option that could be considered by policymakers.

But Lord Willetts, who ordered the creation of LEO data when he was in government, warns that this would be “a misuse of the data and a major policy error”.

He emphasises that the dataset was originally designed to determine how much universities would be required to contribute towards their students’ loan write-offs, under a never-adopted proposal of the Browne review of higher education under which the cap on tuition fees would have been removed.

But further research had revealed the shortcomings in the data – for example, how it undervalues graduates who work in areas with lower average salaries, or in professions such as nursing or teaching.

Lord Willetts argues that a better option would be to lower the loan repayment threshold so graduates start repaying when they earn £21,000, not £25,000, and extend the repayment period, to “make the system both financially sustainable and more politically acceptable without having to constrain the autonomy of universities”.

chris.havergal@timeshighereducation.com