Drop-out and debt

7th July 1995 at 01:00
The system of student support that was supposed to make a university education available to any 18-year-old able to benefit from it is showing signs instead of becoming a real deterrent. Poverty, hunger, homelessness, dismal tales of graduate unemployment and the prospect of eventually starting working life deep in debt are driving increasing numbers of undergraduates to abandon their studies. There are signs too that others are being discouraged from even embarking on theirs (page 8).

The growth in undergraduates has been dramatic over the past 15 years, rising from the equivalent of one school-leaver in eight in 1979 to one in three now. Some, the CBI among them, would like to see this trend continue to keep pace with even higher and more steeply rising participation rates among our industrial competitors. In those countries student support arrangements tend to be even less generous and drop-out rates even higher: Germany, for instance, enrols a third more undergraduates than Britain but 50 to 60 per cent of them never complete the course compared with 13 per cent in the UK.

But this difference is now being eroded. According to the Committee of Vice-Chancellors and Principals, the numbers of students leaving courses for reasons other than exam failure is rising fast. The rate is already greater than the rate of growth in student numbers. On top of that, nobody knows how many cases of academic failure are attributable to students working to earn their keep rather than to pass their exams. One university in three now runs a job club or bureau for students in recognition of their need to supplement their income.

Even for the small minority of students who receive it, the full means-tested grant is no longer adequate. Frozen in 1991, the intention was that students would be able to supplement their grant, and the expected parental contribution, with a government loan that would gradually increase in size as the value of the grant element decayed. That, of course, assumed that parents were still able and willing to make the parental contribution called for in most cases; an assumption about dependency, stable and extended relationships and disposable incomes that simply does not pertain in many families.

The present loan system has proved what it always promised to be; a regressive disincentive to the worst-off to better themselves through education. The low interest and conditions of the loan may seem benign enough to the moderately pecunious mortgage-payer used to a regular salary cheque; the graduate does not have to start repaying the loan until he or she earns the equivalent of 85 per cent of the national average wage, though once they do they are expected to pay it off in 60 monthly fixed instalments. Viewed from the other end of a financial telescope it does not seem such an inviting proposition to 18-year- olds.

Wastage rates in the UK may be comparatively low. But it can be in no one's interest to increase the waste and disappointment these represent. It is no longer possible to turn back the clock, however. Since 1991, the numbers eligible for student support in higher education have increased by a third. That makes a return to the full means-tested grant an unpalatable prospect for any Government - or tax- payer - particularly if student support for continuing or further education is also to be contemplated to create a fairer ladder of opportunity.

Instead the Government, like Labour and the CVCP, must now, as part of its current review of higher education, look at a loan system that promises less consumer resistance; one in which repayments are extended less dauntingly over a longer period, more graduated according to income and collected through the income tax or National Insurance system.

But it is right that the review being carried out by the higher education minister Tim Boswell should also be asking other questions: what - or who - is university education for? Do we really need half our school-leavers to be graduates, as the CBI suggests, and if so in what disciplines? Or is it at the technician level that the crucial skills shortages exist and what part should universities play in meeting those? As Gillian Shephard put it this week: "While the objectives in the 1963 Robbins report remain broadly valid, there is now more emphasis on higher education's role in underpinning a modern competitive economy."

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