Graduate contributions vital to future of UK higher education

17 May 2010

An increase in graduate contributions is the only viable and fair way to secure the future of the UK’s world class higher education system and the universities’ vital role in educating a workforce for the global economy, says the Russell Group of Universities in its second submission to Lord Browne’s review on higher education funding and student finance.

The submission is published today in the wake of the Russell Group’s report Staying on top: The challenge of sustaining world-class higher education in the UK.  It demonstrates an urgent need to secure additional investment if the UK’s leading universities are to continue delivering outstanding education and research, and to remain internationally competitive.

The submission considers a wide range of options for securing appropriate funding levels for higher education.  Support from charities, business, endowments, philanthropy and other sources is crucial, but it will not be sufficient to meet the severe challenges facing universities.

While the state, employers and graduates all benefit hugely from research-intensive universities, the taxpayer still foots the lion's share of the bill.  Increasing the contribution made by graduates is the fairest as well as the most effective option because it reflects the financial and wider benefits of a university education to the individual.

Commenting on the submission, Director General of the Russell Group, Dr Wendy Piatt said: “There is an urgent need to secure additional investment in our universities if they are to remain the world-leading institutions that they are today, and to sustain their vital contribution to this country’s economic success and prosperity.

“All of the beneficiaries of higher education need to share in meeting this challenge, and while every source of income needs to be explored, this submission shows that an increase in graduate contributions is the fairest and only viable option for addressing the funding shortfall.”

“The Government must not, however, rely on graduate contributions for the long-term sustainability of our universities; any increase must be accompanied by a commitment to maintain public investment in higher education otherwise we will be no nearer to solving this pressing problem.”

The Russell Group’s submission presents several ways of overcoming concerns about increasing graduate contributions.

• Evidence shows that fees have not deterred young people from applying to university; participation in higher education from all socio-economic groups has actually increased since the introduction of variable fees in 2006. However, any increase in graduate contributions should be accompanied by measures to address concerns about fair access and widening participation.
• The principle that our universities remain ‘free at the point of entry’ – that variable fees are not repaid until graduates are earning – is critical.  Increased graduate contributions will provide additional resources for innovative access initiatives and bursaries while ensuring no students have to pay up-front.
• The costs of student support can be made more affordable to the taxpayer by removing over-generous and regressive subsidies to student loans, whilst retaining support for those who need it most.
• The submission also shows that, in a tight fiscal environment with limits on public borrowing, there are a number of viable options to secure investment from the private sector to support graduate contributions.
• Finally, Russell Group universities are committed to seeking the most effective ways of ensuring that students have access to clear and transparent information, so they can make informed choices in a diverse higher education system.

Dr Piatt continued, “Many details remain to be resolved, but we have shown that graduate contributions can support widening participation and fair access, and that over-generous and regressive public subsidies can be addressed to yield a more sustainable system for the taxpayer.  By giving serious consideration to mechanisms for leveraging private investment in the student support system, this submission shows that unsustainable public borrowing can also be limited.

“The most effective and efficient way of protecting the quality of UK higher education would be to allow institutions to exercise discretion over the level of graduate contributions they require, but any move to a fully differentiated market through removing the cap on fees should be incremental.

“We have an outstanding higher education system in the UK; one which is the envy of the rest of the world. We need now to secure a funding system that can protect access for all with the ability and the wish to benefit from our universities, regardless of family background, while providing the resources needed to maintain this outstanding quality for subsequent generations. The future of one of this country’s greatest assets depends on it.

“We recognise the challenges facing the new coalition government but it must not shy away from addressing this urgent problem, and recognising the vital contribution made by our universities to the nation’s cultural and economic wellbeing, not to mention our standing in the world.”

Russell Group second submission to Browne Review 12 May 2010

Download Staying on top: The challenge of sustaining world-class higher education in the UK