Fears government-backed postgraduate loans will leave students out

Students at University of London. Photograph: UEL

With many postgraduate courses demanding four-figure fees upfront or asking students to prove they have the money before they can start, study beyond degree level is today beyond the reach of even the relatively affluent, let alone society’s poorest.

Which is why current undergraduate students – traditionally no friends of the Conservative party – are having to deal with the creepy feeling that they really like the sound of something the chancellor George Osborne has proposed.

In the Autumn Statement last year, Osborne said he was going to make available for post-graduate study government loans comparable to those available to undergraduates. He said that the current system “deters bright students from poorer backgrounds” from postgraduate study.

A consultation to find out what universities and colleges think of the plans has recently closed, with full details of the scheme to be announced soon. It is anticipated the loans will be in place for courses starting in the 2016-17 academic year.

Student loans are at present only available for people taking undergraduate degrees who haven’t studied in higher education before.

Under thirties left out

Osborne’s proposal was to extend a similar scheme to postgraduate study. But there are some important caveats: students will only be able to borrow up to £10,000, and the loans will only be available to those aged under 30.

This age limit is a serious concern for Sinead McCarthy, head of the Student Money Advice Team at the University of East London (UEL), who is otherwise largely enthusiastic. “If the age limit wasn’t there,” she says, “it would be the most positive thing that has happened in a long time.”

While McCarthy believes the loans will widen access to postgraduate education, she points out that “age is also one of the access issues” faced by universities. People out of their twenties, more likely to be parents, form an under-represented group among postgraduate students, along with people from ethnic minorities and those on lower incomes. UEL champions the access of such groups to higher education.

McCarthy is also critical of the £10,000 limit, which will not cover the full expense of taking a postgraduate degree without being able to work.

Even if you worked part time, this would still be a tall order. Calculations for the London Living Wage estimate that a ‘low-cost but acceptable’ standard of living for a single adult without children would br £282.30 per week in the capital, around £14,500 per year. That’s without paying fees – or looking after children.

“And it’s still a loan, obviously,” cautions McCarthy. Repayment terms have not yet been fully published, though an interest rate of nine per cent per annum is rumoured. Neither is it clear whether the loans will only be for fees, or whether any money left over will be made available to students for maintenance costs.

Increase competition

One reason Osborne may be in favour of postgraduate loans is that they could increase competition between institutions (thereby raising quality, in the view of some). Undergraduate fees are now so astronomical and will be paid off over such a long time that there’s little benefit in choosing a course charging £6,000 per year against one charging £9,000.

Paying off student debt only means there will be a couple of years before you retire in which your tax rate is slightly lower. But if you’re thinking about how large a lump-sum you might be able to scrape together over a few months, or how much commercial debt you’re willing to live with, then price becomes an important factor.

Sarah, who lives in Homerton, attends a postgraduate course she is not entirely happy with but was prevented from going elsewhere due to lack of funds. Unwilling to borrow money, she started a course at a university outside London that charged lower fees and accepted them in instalments. She applied successfully for a place on a different course at UCL, only to end up unable to produce £10,000 for an up-front fee. She is now working as best she can to mould the course at the first university to meet her needs, and juggling this with part-time work.

“I’ve had such a bizarre range of jobs,” she laughs, ranging from office admin to nannying and tutoring to being a cook. It can be interesting, but it gets in the way: “I haven’t enjoyed having to work at the same time as studying,” she rues.

It’s not just the hours spent away from the books, but a pervasive psychological strain. “It seems to be a constant process of thinking ‘oh my god, where’s the next bit of funding going to come from?’” says Sarah.

Graduate loans, if and when they happen, will make postgraduate education look a great deal more sensible and serious. But if the policy is truly about building a better system and one that allows more people to reap the benefits of postgraduate education, it must take seriously the question of whom it leaves out.