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.

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.

I wasn't being patronising - apologies if it came across that way.

But I did not say ALL grads get grad jobs. The vast majority do though. And given that 85% manage to do so by early September the year after they graduate, then obviously given a bit longer, a good proportion of the remaining 15% will. There's always going to be those that don't. But to imply there are a large number of these, that they're all coming from bottom of the league table unis doing unemployable degrees such as Media Studies is rubbish. It's simply not true.

My ds is a case in point. Currently working a NMW retail job, starts his grad scheme in October - will count as one of the 15% who have failed to get a grad job simply because in September he'll still be in retail.

But I did not say ALL grads get grad jobs. The vast majority do though. And given that 85% manage to do so by early September the year after they graduate, then obviously given a bit longer, a good proportion of the remaining 15% will. There's always going to be those that don't.

I'd agree with this. I think it's probably accurate to say that a lot of graduates aren't doing a job necessarily related to their degree but it's still a grad job. And it applies to both arts and STEM graduates, but it seems to me that that is considered a good thing when STEM students do it but a waste of a degree when arts students do it.

@titchy Sorry to be pedantic, but the IFS completely disagrees with you. You possibly need to read research that’s more financially astute. Look at the report and you see, as I said, some areas don’t employ high numbers of grads in grad jobs. London does. Sorry if it’s difficult to read but it’s 42% outside London. This clearly means loan repayments are lower than we would want.

I work at a university and I’d say it’s impossible to get a basic admin job at the university unless you have a degree. Which is a shame, there should be no reason why you need a degree to do an admin job.

So such employment practices means that people feel they need to get a degree in order to get any sort of jobs. I worked in a call centre previously and that was the same. So all that student debt for a 23k a year job 🤷‍♀️

My daughter is in a graduate role, literally you legally can’t do her job without the relevant degree. She earns minimum wage. Crazy. She obviously won’t be paying her student loan back yet. She’d earn more in a shop.

I used to work in a university in an admin role. Some of my colleagues were graduates, some weren't. I can't see any reason why a non-graduate couldn't do a straightforward admin role. Mostly what was needed was common sense, good communication skills (oral and written) and the ability to organise and prioritise. I am in my 60s and back in the days when only a small minority of the population went to university these skills, or the potential to develop them, were common in school leavers of 15 or 16.

Many billions

is a bit of a stretch. Over a now 26 year period sales have realised a total of around £5.6 billion. In a quarter of a century.

Two sales of the student loan portfolio of around £1 billion each were made in 1998 and 1999. Both consisted of mortgage-style loans only.

Roll on 14 years

A plan to sell off the last remaining mortgage-style loans was announced in March 2013. On 25 November 2013 the Government announced that the last £890 million of outstanding mortgage-style loans had been sold for £160 million.

December 2017 the Government announced that it had sold the first tranche of Plan One loans for £1.7 billion. Soon after they published a formal report on the sale. The Treasury Select Committee looked at the issue of value for money of these sales in their report Student Loans (p9-).The sale achieved £1.7 billion from 1.2 million loans with a face value of £3.5 billion held by over 400,000 borrowers. This represented a write off of 51 per cent of the face value of the loans.

A second sale of a tranche of Plan 1 loans that entered repayment between 2007 and 2009 was completed in December 2018. The sale was of loans with a total face value of around £3.9bn and achieved £1.9bn

and that's the lot.

As you rightly observe in 2020 the Treasury announced.

The government has therefore taken the decision that it will not proceed with further sales of student loans. As a result, no further sales of Plan 1 (pre-2012) student loans will now be undertaken. The government also has no plans to sell Plan 2 (post-2012) loans

For the vast bulk of student loan value - primarily incurred since Plan 2 loans were incurred - the taxpayer is very much carrying the can.

Back in 2017 the National Audit Office stated that the the face value of all outstanding loans issued before 2012 was £43 billion.

Last month the HoCL latest breifing paper confirmed the value of outstanding loans at the end of March 2024 as £236 billion. and that the Government forecasts the value of outstanding loans to reach around £500 billion (2023-24 prices) by the late2040s.

Those with a darker sense of humour may recollect that back in 2018 the then Government expected the value of outstanding loans to be around £330 billion (2014-15 prices) by the middle of this century.

This is the most recent briefing paper (with a loan sales' history contained in the final section). https://researchbriefings.files.parliament.uk/documents/SN01079/SN01079.pdf

and then this is the one from 2018 https://dera.ioe.ac.uk/id/eprint/31905/1/SN01079_.pdf

Totally agree. Friend of mine who is a non graduate but has 20 years PA experience has applied for loads of admin jobs at the uni and not got one. Her application is good, she carefully matches all the job description requirements. Yet, they employ 21yo graduates with no experience (and sometimes no common sense). 🤷‍♀️

@boys3 Is there any way to compare that with the amounts of funding that the government was giving univers

Sorry...
Universities before the introduction of loans? Is it in fact costing more now or less than before do you think?

Thank you - yes, I hadn't the exact figures so stuck with 'many billions', definitely a stretch. Investors are clearly finely tuned to the desperation of UK governments.

Despite what past governments have stated and regardless of statements by the current minister to the effect that there will not be a university bailout, I would say further sales of debt are likely. Brexit has had a hugely negative effect on university research funding.

The same sort of fire sale will likely happen to the NHS eventually. There is not much left to sell off.

It must be a hopeless situation for the majority of universities on the financial brink. Without higher tuition they won’t get the funds they need. With higher tuition they may not get the students (with funding they need attached.)

The only way out would be direct taxpayer subsidies, or more foreign students again. Neither of which is acceptable to the citizenry.

https://commonslibrary.parliament.uk/research-briefings/cbp-7973/

if you mean before 2012 the HoCL published this briefing paper in early 2021 looking at the picture from 2010-11.

Going further back the Augar review has a section on university finance, and has at least one chart going from 1990-91 through to 2017-18. The university finance section starts on page 66 of that report.

https://assets.publishing.service.gov.uk/media/5ceeb35740f0b62373577770/Review_of_post_18_education_and_funding.pdf

sorry should have added a link to the Augar Review in the previous post.

And this one goes back to seemingly the beginning of time itself

https://www.historyandpolicy.org/policy-papers/papers/university-fees-in-historical-perspective#:~:text=Even%20before%201914%2C%20outside%20Oxford,associated%20with%20the%20Robbins%20report.

Surely loans replaced direct money from government and allowed great expansion of the unis which has largely been unchecked. It’s mushroomed with no evaluation of the quality of the mushroom, Basic admin jobs don’t need degrees. Grads are looking for jobs and they are cheaper. That’s why they are employed. This is why we need honesty and not rhetoric about what these jobs really are. Years ago degrees were not needed for basic office jobs. DN has a data entry job in the NHS. First class degree from RG in a science subject. Lots of loan money and a bursary. Just wasted at the moment. Any school leaver could do the job - grade 2 NHS pay. And more to the point - a school leaver should be doing it.

Tizer you set too much store in the initial jobs people do in the year or two after graduation. They won't be in those jobs for the next 50 years of their lives. They're working, earning, figuring out potential careers often. I know several grads working as teaching assistants with a view to then going into teaching, a couple of care assistants who used that to get on grad entry medicine.

Your 20s are the exact right time to do that, when you can relocate, house share, live off cheap noodles.

I'm sure your DN will be able to use the experience gained in her crappy NHS job to find a grad role in a field she wants to work in. FWIW my dd and dd have also done pretty unskilled jobs immediately after graduation, and both now in, or about to be, professional roles.

I worked in a newsagents then as a bank cashier in the two years after I graduated!

Article in the Graun today https://www.theguardian.com/education/article/2024/sep/05/english-universities-need-tuition-fees-of-12500-to-break-even-analysis-finds

with the usual somewhat misleading headline. It referenced the Universities UK conference and publication yesterday of a new report commissioned by UUK. The economic impact of higher education, teaching, research and innovation

That was referenced by in Prof Sally Mapstone's speech to the UUK conference yesterday. Ahead of that Prof Mapstone identified UK universities now "standing at a fork in the road", and referenced a Blueprint for the Future (not sure that has been published yet). Her speech is worth a read https://www.universitiesuk.ac.uk/latest/insights-and-analysis/speech-professor-sally-mapstone-dbe-frse-0

The report referenced in the Graun can also be accessed through the UUK website https://www.universitiesuk.ac.uk/what-we-do/policy-and-research/publications/economic-impact-higher-education

I agree with @titchy . I did minimum wage, admin jobs for a few years after leaving uni. I’m now a senior lecturer. I wouldn’t have got my current role without my first degree.

https://www.gov.uk/government/speeches/jacqui-smiths-speech-at-the-universities-uk-conference

and the Skills Miinister's - Jackie Smith - speech at the UUK conference. Which while saying financial stability is the foundation seemed to lack anything of substance.

The main issue with student debt is that we are encouraging young talented but poorer students to leave the country, as that may get them out of student debt! I know the theory is they still pay it, but in practice….

Well like the government budget next month, we'll have to see what the universities decide to do . There's nothing we can do about either

@CormorantStrikesBack The whole point of degrees used to be access to higher quality jobs. Not basic pay ones. Why DN as a scientist cannot find a job worthy of the degreeis beyond me. One wonders why such a degree was needed and there’s no guarantee this leads to anything? Maybe some science degrees over produce grads too? Some of this is all about personality and actually wanting a grad job. Doing the masters and not seeing it as a waste of time. Having a career plan. We do see lots of grads with not much of a job and not paying any grad tax. We need tax payers for a bouyant economy. To pay for what we want. Grads were supposed to be the top of that particular tree. Not doing what an 18 year old could do. We have thrown money at unis but I don’t believe we reap the rewards.

Why DN as a scientist cannot find a job worthy of the degreeis beyond me

FFS tizer that's low of you - to write off your DN's entire working life of what - another 40 odd years, based on them doing an NMW job a year or two after graduation.

And I'm saying nothing about the plural of anecdote is not data....

But if I was - me, dh, both dcs - all did grunt jobs a couple of years after we graduation. I can assure you all four of us are in professional level jobs now.

I'm a professor. My first job after my undergrad graduation was as a shop girl, selling frocks & jewellery.

Oh well clearly you'll never amount to much and your degree was a complete waste of tax payers money.