Some universities will go bust

[GinForBreakfast]

Reported in the Times today. It must be so worrying for students joining or returning in September/October.

My question is around the regulator, who knows where the issues are. What should they be telling students and when? It seems cruel, especially to young people, to withhold information. It has financial implications as well - people moving, paying deposits etc.

what banks?

Very good context @tadjennyp

While a "lower ranked" university may not be producing the highest number of future millionaires, the difference they make to their graduates could be still valuable. If you are proposing to take away some education opportunities you better be damn sure you're not disadvantaging people already disadvantaged.

https://wonkhe.com/wonk-corner/the-golden-age-of-universities-is-over-says-new-ofs-chair/#:~:text=On%20the%20front%20page%20of,age%20of%20universities%20is%20over”.

WonkHE’s take on yesterday’s ST article. Unsurprisingly rather less detached from objective reality, or indeed simple factual accuracy, than what now passes for journalism at the ST.

Very pertinent observation @GinForBreakfast and something that the English Social Mobility Index published by HEPI clearly demonstrates.

@boys3 There is good evidence I thought that top unis provide better social mobility. I’m sure ifs looked at this. It’s not clear a 2:2 from a low ranking uni helps much. Or a 2:1 from some. As in all cases, what else dc has to offer matters. Maybe more than degree at times. I think it’s been well recorded that aiming high pays better dividends for social mobility. Aiming low less so as often students don’t move into a better job.

Also who on earth expects dc to be millionaires? That’s a mile away from paying off the loan. Having said that, some people will be. However they pay tax and if entrepreneurs, employ people. That’s good for the economy and probably unis.

I’ve always wondered why students don’t get grad jobs. We always have a sizeable percentage who don’t. It seems they cannot utilize their degrees to get paid work so they pay next to nothing back anything of the loan. I don’t see this as beneficially the millions of tax payers who haven’t been to uni. What do they get out of this scenario? I tend to be mystified as to what they studied and what they wanted out of it. What was the motivation and why bother if there’s no monetary gain above not going? Why not do something else?

Also HEPI - only 3 in the top 10 are post 92. The rest are plate glass or RG. The post 92 are all former polys! None are colleges of HE prior to 92 or colleges of education. They almost certainly do take deprived local dc but we don’t know if these dc should have done better with their A levels or was it culturally acceptable to stay close to family? Surprisingly the uni of Bedfordshire is near the bottom for social mobility. Maybe a good train into London helps! 8 of the top 15 are in London. Interestingly Leicester sits just above Oxford and lower than Cambridge. I don’t think Chris Hillman has understood why some unis top this list. It’s not about Oxbridge, it’s about culture.

@TizerorFizz

I’ve always wondered why students don’t get grad jobs. We always have a sizeable percentage who don’t. It seems they cannot utilize their degrees to get paid work so they pay next to nothing back anything of the loan. I don’t see this as beneficially the millions of tax payers who haven’t been to uni. What do they get out of this scenario? I tend to be mystified as to what they studied and what they wanted out of it. What was the motivation and why bother if there’s no monetary gain above not going? Why not do something else?

The main fact is that there are far more graduates than there are graduate jobs, thanks to Blair's 50%, so a proportion of graduates will inevitably not get graduate jobs.

I think since Blair, there's a kind of societal expectation that you leave school and go to Uni if you can. A kind of rite of passage. Some want to go to Uni for the social life, independence, sports, etc., and aren't too bothered about getting a good degree, so will do just enough to get a 2:2 so they can tick the "I've got a degree" box.

For a few decades now (again made worse by Blair) too many parents look down on the "trades" and don't want their precious child getting their hands dirty, and now all school leavers have to go onto "further education", there's a stigma that some colleges of FE are for the bottom tiers, with the "better" students going to sixth forms and then to Uni, whilst "Chantelle" who didn't get any GCSE passes goes to college to learn nail varnishing!

I think there are encouraging signs of the tide turning, and more realisation that people can have decent well earning jobs doing manual skills, trades, etc., and we've got to hope that the new government will really push alternative options rather than Unis, such as apprenticeships, improving colleges, improving adult education options so people can retrain once leaving education, etc.

I totally agree that pursuing an apprenticeship or a trade is an excellent alternative for many students. My worry is that the burden of debt is dissuading very bright students who come from poorer backgrounds. My brightest A Level student is one such; a PP kid who doesn't want to go to uni because he is scared of the debt. He could easily do very well at a decent ranking university but is much less likely to take a place than a less intelligent student from a much better-off family with all the attendant advantages. That is a concern for anyone interested in social mobility. Hoping that there is a decent degree apprenticeship he could do.

@taxguru Blair did not expand uni provision. We need to get away from this. The post 92 unis were a conservative idea based on the Robbins Report in 1963. Cameron lifted the cap on uni placements in 2013/24. Blair did very little in terms of policy. Just encouragement. Maybe don’t believe all the anti Blair hype. We do though have a workforce that’s heading toward 50.% degree holders as non degree holders retire.

Part time degree participants have fallen off a cliff. I agree that variety, as long as it’s high quality learning, is better than the degrees and sometimes poor FE offerings. We need the middle sector to be much much stronger. As it was in the days of the polys.

I think very bright disadvantaged students should be given bursaries like in the past to attend university. This was the case when less people went to university. I would prefer less people to go overall and to use the money to fund bright disadvantaged students.
So many disadvantaged students are having to work long hours now to support their degree or are commuting from home that they are not having the traditional university experience.
Families are also becoming more sceptical as to the value of a degree because we can already see lots of disadvantaged young people not getting graduate jobs who are now also saddled with £46,000 of debt. So they can't get a good job and they have the debt.

@Runemum They do get bursaries. DN got one. £2000 extra so she was better off than the JAM dc at her uni. Yes, there’s the grad tax but this really should be a driver towards excellence. If you never earn more than £30,000 you really pay diddly squat in tax and you won’t ever pay it off! It’s not a bank loan.

I’ve always wondered why students don’t get grad jobs. We always have a sizeable percentage who don’t

<sigh> this chestnut AGAIN? They overwhelmingly DO get grad jobs. 85% within 15 months of graduating. The rest not may take a bit longer (generally those from lower SE backgrounds, or disabled or black - all of whom find it more difficult because of structural inequalities completely unrelated to the uni they graduated from), but they do mostly get grad jobs eventually.

Of the few that don't, well let's see, one married the future King of England which I'm sure isn't a grad job. A few are probably trust fund kids spending several years getting wasted in Ibiza. A few will have had babies and not have rejoined the workplace. Some may be approaching retirement and not have any inclination to seek a grad job.

@taxguru as Fizz says that 50% is a lot more nuanced. Never about 50% of school leavers going to Uni, a % the UK has never got anywhere near. Not about just going to university but about higher education. Not about degrees but again higher education. The latter is provided by a much wider range of organisations than just universities, and there are more higher education qualifications than just degrees.

all that said societal expectation about going to Uni after sixth form may well be nearer the truth in London, where indeed just on 50% do go - but with a fairly significant female - male difference.

They do get bursaries. DN got one.

You do understand bursaries are specific to the uni yes? Just because your dn got one, doesn't mean anyone in the same position at another uni would also get one.

@titchy They absolutely do not! Sigh!!! You have a greatly inflated opinion of some degrees. 15% is still huge. It’s still a vast amount for tax payers to find. 15% of £285 billion owed is over £42 billion! Yes £42 billion. What exactly have we got for it? Honestly we cannot afford this attitude towards spending money for no return. Had it been spent where it should have been spent we would all be better off.

Re-read my post. 15% is after 15 months. Someone isn't a failure because they took 18 months to land a grad job. They'll be working and paying back their loan for 40 years - so what if they spent a few extra months in a non-grad role. Doesn't mean the system is failing.

Besides, as I said earlier, the model was predicated on 60% RAB charge. There was never any suggestion that students should foot the entire bill.

Nowadays isn’t pretty much everything that’s not a trade a grad job? So many perfectly ordinary jobs ask for a degree. I can totally see why young people feel they have to go to uni, even if their career aims are not the typical MN 6 figure ones.

Graduate level job is a formal classification. If you're really interested or can't sleep see here: https://www.ons.gov.uk/methodology/classificationsandstandards/standardoccupationalclassificationsoc/soc2020/soc2020volume1structureanddescriptionsofunitgroups

No. I really don’t understand how the loans are set up. I thought the loans were run by banks who take the interest, but ultimately backed by the tax payer who takes the unpaid liabilities at the end of the term.

No. Loans (and repayments) are provided by the SLC who are wholly Government owned. No banks involved.

Thanks! 😴
I had presumed it was probably an official thing, but in reality I really do think young people go to university because they know that even really basic jobs demand a degree.

Nowadays isn’t pretty much everything that’s not a trade a grad job? So many perfectly ordinary jobs ask for a degree. I can totally see why young people feel they have to go to uni, even if their career aims are not the typical MN 6 figure ones.

^ This. I feel sorry for young people today. What if you're not practical and would be rubbish at doing a trade or vocation? A lot of retail/hospitality jobs don't want full timers (and it seems that a lot of these jobs are being taken by students to top up their loans anyway). On the other hand do a degree and you still might not get a decently paid job (let alone a well paid one).

Engineering has been spoken about a lot on here but it covers such a wide range of careers. My DH did civils and works in a multi national company and he wouldn't advise anyone to do traditional heavy civil engineering if they want to work in the UK. Major projects have been cancelled (HS2, Stonehenge tunnel etc.) most of the work is council maintenance contracts and his company like many others is outsourcing a lot of design work to India. Fewer and fewer uni students are being offered work placements because .....money. He thinks the future is work involving carbon capture and other associated stuff which is a whole different ballgame.

Maths is the most popular A level so presumably we should be producing loads of STEM graduates, are they all really getting well paid graduate jobs?

@Sweetpeasaremadeforbees Theres absolutely loads of jobs for civil engineers! DH should know they aren’t all employed in big faceless projects. Starting salaries are very decent and promotions are good. Many mid sized consultancies are desperate to get people but flexibility and breadth of expertise are lacking in many. DH’s former company does lots of design for the rail network. It’s definitely not doom and gloom. Look at new housing. All those roads and sewers! So much work.

Not all stem grads are equal. Engineers require maths and physics. We don’t have enough of these to go round.

@titchy Yoh are living in a parallel universe if you really think all grads eventually get grad jobs! Of course they don’t. Look at arts for a start. We clearly want the arts but nowhere near the grads we churn out. And don’t be so patronising.

University loan finance is essentially a tax farming scheme, or it was until 2020.

Successive governments have sold tranches of student loan debt to various investors, beginning in 1998.

The advantage to these governments was immediate cash release (over the years to the tune of many billions ££££), and thanks to public accounting practices up to 2020 could be used to enhance the picture of the public finances.

It is not simply a matter of all taxpayers carrying the can for all loans.

Starting salaries are very decent and promotions are good.

Starting salaries for civils average around £25-26 000. Even fully qualified teachers now get over £30 000. Not sure about promotions, my DH is a CEng and earns good money but mostly because of the Masters in Contract Law that he studied for.

A lot of the large civils companies (the Robert and Alfred McAlpines, Amec etc.) were taken over by bigger, often foreign companies let's not mention the Carillion debacle that screwed up a lot of building projects and trashed employee pensions and building sewage pipes and estate roads is not enough to sustain the entire sector. Maybe smaller companies are safer, DH is not convinced, unless they are very specialist and have cornered a certain market.