The government should create a new national system of two-year, sub-degree level programmes which can be taught in colleges, according to a report by Baroness Wolf.

A report published today by the Education Policy Institute argues that the current system  is plagued by “economic inefficiencies”, with too many students studying three-year degrees at university, and many never paying off their student loans.

Instead, Baroness Wolf of Dulwich, a cross-bench peer and the Sir Roy Griffiths professor of public sector management at King’s College, London, argues that a new programme of two-year level 4 and 5 programmes is needed. The “sub-degree tertiary awards” should be offered by college and universities, the report argues.

“The contrast between the high take-up of loans for degrees, and the failure of advanced learning loans for FE-based learning, is in large part a result of there being no established national system of awards at levels 4 and 5,” the report states. “This is bad for individuals and for the country, and perpetuates the deep injustices of our current system, as well as its economic inefficiencies.”

The number of HNCs, HNDs and foundation degrees on offer has “declined rapidly in England in recent years in both higher and further education institutions”, the report adds.

Three-year degrees ‘not enough’

However many university graduates are working in “non-graduate jobs”, it states, adding: “For many people, a degree is not associated with earnings that are well above the non-graduate average.”

“The cost of loans to students would be much reduced by making two year rather than three year tertiary awards. This would also reduce the cost to the taxpayer considerably, probably saving £6,000 in student loan subsidies for an average-earning student, and more than £10,000 for low earners,” the report concludes.

David Hughes, chief executive of the Association of Colleges, said: “It is not enough to invest in full-time, three-year bachelor’s degrees if we are to meet the skills needs of our country.”

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