Most of the furore over the new higher education tuition fees has
considered the issue from the perspective of full time students, but construction
degree courses are widely offered on a part time, day-release basis. How will
the new fees affect these courses?
The new system
There has been understandable concern over the new tuition
fees for university courses which will come into effect in September 2012.
Students enrolling on degree courses will be liable to pay annual tuition fees
of up to £9000 per year. The mechanism which is to be used to recover the fees
is the student loan system, so students will not have to pay fees up front but
will effectively receive a loan to cover the fees. The Student Loans Company (a
government-owned organisation) pays the tuition fees directly to the University
on behalf of the student. After graduation, students only start making
repayments once they are earning £21,000 or more. At that point, they are
required to pay 9% annually of everything they earn over £21,000. Thus,
a student earning a salary of £25,000 will pay 9% of £4,000 (£360), which
equates to £30 per month.
That might sound reassuring, in the sense that new graduates
(particularly those earning relatively small salaries) are not burdened with
excessive repayments in the early years of their careers. Nevertheless, the
fact remains that most graduates will effectively have debts of around £27,000
just for tuition fees, and may have racked up further debts if they have
borrowed money to cover accommodation, food travel etc. (so-called maintenance
loans). Consequently, there have been many scare stories about young people
being saddled with £40,000 of debt at the age of 21. However, the student loan
is actually very different from a normal debt. As the money-saving expert, Martin Lewis, points out, it isn’t strictly a loan at all but
a “hybrid form of finance ..... half way between traditional borrowing and
taxation”. The key differences are as follows:
- Repayments are made automatically through the tax system
- Repayments are made only when earnings go above the threshold (£21,000)
- If earnings drop below the threshold, repayments stop, so if someone loses their job they do not have to continue paying.
- Repayments continue for a maximum of 30 years only, after which any remaining debt is wiped.
When the new tuition fees were first proposed, my
understanding was that a key principle of the system would be that everyone
going to university would have to take out a student loan. That way there would
be no advantage for people from wealthy families who are able to pay their fees
up-front and thus avoid the burden of debt after graduation. There was
certainly some debate about this, but it seems that system introduced does
allow up-front payment, and indeed many universities offer a discount for
payment in this way. I personally don’t agree with that in principle, but
that’s beside the point. What I am currently somewhat confused about is the
question of part time students who are sponsored by their employers.
Part time students
At the University of Westminster just over 50% of the 600
students on the various courses in the Construction Studies Undergraduate Programme are part time
students. These students attend University on one full day per week, and
complete their degree courses over a five year period. A significant number of
these students are sponsored by their employers, i.e. employers pay the students’
fees and allow them a day off work each week to attend university. There has
been a long tradition in the construction industry of ‘day-release’ education
whereby new entrants to the industry combine their studies with paid
employment. Although it is demanding, it is a fantastic way to learn, because
students are gaining valuable workplace experience alongside their studies and
can thus contextualise much of what they learn in the classroom. At Westminster
we have served the part time market for decades, and up until the recent
downturn in the industry we actually had significantly more part time students
than full time students on our construction courses.
So what is the likely impact of the new tuition fees on part
time student numbers? Well, the answer at the moment is that no one really
knows. Part time students will pay fees on a pro-rata basis to the same level
as full time students. This means that our part time students will be paying
between £4000 and £6000 a year (depending on the number of modules they are
studying), as compared with £8000 for full time students. One key difference
for part time students under the new system is that, for the first time, they
will be able to apply for a loan in the same way as full time students.
Potentially, this is could be positive move for prospective part time students
who don’t have employer sponsorship. But how are employers going to view the
new fee system? If employers are considering taking on trainees with a view to
sponsoring them through university courses, how will the new fees affect those
decisions? Some important questions spring to mind:
- Are employers actually aware of the implications of the new fees?
- Will they still be willing to pay tuition fees up front at the new levels?
- Will student employees be expected to apply for loans and pay their own fees?
- What is the government’s position in respect of employer-sponsored part time students?
I think it will be important for us as a University to engage
with employers to find out what they are thinking. Of course the current
economic climate means that construction employers are less likely to be taking
on new recruits, so this will make it even more difficult to establish a clear
picture.
Some people believe that in the next few years the
distinction between full time and part time students will become increasingly
blurred. Most students will need to be in employment alongside their studies
just to survive, so the concept of a full time course or a part time course
might simply disappear. Students may simply complete modules at a pace which
suits their circumstances, and accumulate credits towards their degree over
different periods of time. Universities will have to be proactive in making
their courses available through more flexible modes of delivery.
Personally, I think the part time, ‘day release’ tradition in
the construction industry has much to commend it, and it would be great shame
if it were to disappear. However, I can’t help thinking that the combination of
low levels of activity in the industry and much higher tuition fee levels will
have a significant impact.
I would be really interested to hear other people’s
views on this issue, particularly from construction industry employers, current
or prospective students, or university staff. Leave a comment below, or email
me directly on a.burke@westminster.ac.uk
