Martin Lewis changing tack on HE finance considerations

[shuggarushed]

Until recently, ML consistently encouraged all young people considering uni to not worry about finance on the grounds that if they didn't get a highly paid job then they would never have to pay back the debt/tax (he prefers to call it a tax). While true, that was an unaffordable reality for the taxpayer. Inevitably, the system was changed in 2023 and graduates of the new scheme are much more likely to pay back their debt/tax. Cue lots of discussion here on Mnet and elsewhere about whether the high cost of a degree is worth it and, now, ML is starting to weave this narrative into his journalism. Given his influence (i.e. most UK students and parents are familiar with his narratives on student finance), it'll be interesting to see what impact it has and how it evolves over coming years. For now, he's collecting stories, and treading carefully as it's obviously an emotive subject.

Example: His most recent podcast covers it in the last 10 minutes from about 1h:02m in the recording: https://www.bbc.co.uk/sounds/play/p0m92f0w

International student numbers aren’t capped - though universities do have practical considerations like timetabling, housing etc and international students have subsidised home students for many years.

But this has been announced just as the bubble has burst on the international student market. China has built many high quality universities itself, its graduate labour market is in trouble and there is now far less cachet in an overseas qualification. Universities are failing over themselves trying to attract students but fees are very high and successive governments have been consistently rude about them and have stripped away many of the old ‘perks’. This isn’t a silver bullet.

I agree that we need more apprenticeships but the reason that Tony Blair increased HE in the way that he did was because employers simply wouldn’t provide them. Employers’ spend on training (of all kinds) has plummeted over the last few decades and shows no sign of recovery. Preventing apprenticeship levy spending on older established workers may help but won’t provide the breadth of vocational training our young people need and which other countries manage to offer.

As you were, I’ll take my gloom elsewhere.

There was a long thread on here over the summer where the DS of a mumsnetter had secured one of the very competitive apprenticeships in the Civil Service only to be told a week(?) before starting that they were cancelling his offer as they weren’t taking on any apprentices in that dept.

So if the govt wants more apprenticeships it needs to get its own house in order.

The public sector accounts for about 50% of employment so they could make a real difference if they actually put in place apprenticeship schemes themselves.

Its so bloody hard for young people these days

There aren’t any more international students! Or at least not enough for every university to make up the shortfall.

Even with the home fee increase last year my institution needed to recruit 10% more international students last year to make up for the extra inflation, pension and NI costs. This year we will need to do the same again. We are bursting at the seams so they either displace home students or all the students get a worse experience. The same pattern is repeated everywhere.

There are only so many internationally mobile students who can afford the fees and all universities are increasingly using them to prop up budgets. It’s a massive Ponzi scheme and the bottom will fall out of it at some point.

The only good news is that Trump has been so awful to international students in the states that we can hope to steal some of their market share. Should be enough to keep us going for a year or two.

A serious diplomatic incident leading to sanctions with China would decimate the UK HE Sector.

But it isn’t just 2 days of teaching. There is also research, reading and essay writing required.

in the 90s medics, engineers and scientists had at least 20 or so hours in person plus at least 20 hours of personal study expected.

completing a degree in 2 years rather than 3 years has been done before (eg Bucks uni). But without the long holidays between each term. The number of hours study and self study is still a full time job just compressed into fewer weeks!!

There aren’t unlimited numbers of international students - it’s a very competitive market all round.

Finally. He was utterly irresponsible encouraging YAs to get into debt on the back of the taxpayer , and ‘never having to pay it off’.

If you have a child starting in september you face £10,000 in tuition for Year 1, then £10500 and then £11,000 So circa an extra £1500 for a three year course.

You can also borrow more to finance your living costs. Hurrah.

None of this makes it cheaper it all just means even more debt. And it still isn't enough to keep the universities afloat.

Too many universities and too many kids doing degrees.

I would agree. I think if you could see what we were taught in the first year vs the amount of going over the basics, ie how to structure an essay, how to put in references, how to work as a team, how to read studies - especially considering much of my cohort were mature students - the 2 yr goal isn't impossible, but they need to actually stick to the UCAS points they advertise, not go for people who haven't done A' Level's who have worked in the job, for example, to take the 2 yr route. A lot of the people who somehow got the degree I was on shouldn't have I feel, as they kept failing modules and having to retake. It was clearly holding up lectures having to repeat so much from the year before for them. I get opening education up for all but the university I went to needed 2 streams if this was the plan, because for 60% of us we were sat boggling at the lack of work being put in as well as the leniency these "relaxed" students were shown from tutors.

We maybe need to reframe degrees that are needed by society and courses which need to have jobs created for them to be of any use. My degree was in Public Health and a lot of the mature students were nurses who took it because they wanted to move up a band at work and weren't actually interested in the topics.

The costs are so high for most. Some might get grants, but the same people being hit harder otherwise. Depressing.

Think Coventry university is offering modules during summer so you can shorten the length of your degree. Do students really need such long summer holidays (apart from working to get funds to help pay for their uni life)

Martin Lewis's whole schtick is encouraging people to take what they can get and never mind the taxpayer - why would he be any different on this issue, to be fair?

@HPFA
Are you sure you have got your figures right?

On the student Loan Calculator https://www.student-loan-calculator.co.uk/
Students from 2023 are on Plan 5, which means students must pay off more of their debt.
If you put in the year 2023 into the calculator and put in a 2 year degree (can't put in 3 years yet for plan 5) with £53,000 of debt (current average debt) and a salary of £30,000, you get these figures:

You would make total repayments of£120,109
which is worth£53,769
in today's money.

The remaining balance after 40 years is£2,673
in student loan balance, which would be written off, which is worth£821
in today's money.

So on a salary of £30,000, which you hope most graduates will earn, young people will pay off most of the debt. However, the later you pay it off, the bigger the debt is as it is constantly accumulating interest.

@somethingnewandexciting I agree more needs to be done to get young people into right type of work for their skill set. I wish there were more apprenticeship/internship options.

I’ve been looking at those salaries. They are so low.

Agree. Employers have been wedded to skilled labour immigration for so long, saving themselves the time and cost of taking on young people that they just dont want to train people anymore. Also agree that the civil service is dreadful for this. They hardly run any apprenticeships, especially not at the higher levels. Its all very well saying kids shouldnt go to University but what are they meant to do then, when employers dont want to take them on and provide training? Even the famous ' we need plumbers/ electricians'- good luck finding an existing plumber/ electrician who wants to take a £50 an hour pay cut to teach in an FE college. If you dont have that there is no 'In my day I learnt on the job with just a day at college'

I think the interest rates on these loans are appalling. It means young people are paying off much more than they ever borrowed and hardly see their loan go down. If we see the student loan as a graduate tax, then all graduates should be paying it, at a lower rate. Not just young people. We shaft our young people so badly all the time in this country. Its so depressing.

Where I grew up (former British colony, outside the UK) there was still a culture of lots of young men going into skilled trades etc.

It was very common to have a father "hold" an apprenticeship spot for his son, or e.g. have his son go to his friend while he took on the friend's son. The son would have a guaranteed spot... in his father's trade, not any other. And you just had to keep going even if you didn't really enjoy it, at least until you finished the apprenticeship bond.

I think the problem of "how can we mass educate everyone but they all can freely choose what they want to do and their training costs are borne by someone totally unrelated to them and they can quit the job as soon as they get bored" isn't fundamentally solved by turning some universities into plumbing colleges. (Although the problem of "do we really need so many people learning how to analyse anime" might be...)

DC studies economics at Cambridge and is struggling to find a grad role. Wondering if the 40k was worth it debt but having a good time socially and intellectually.

It is one reason why for those of my children who went into law (my career) I said if you cannot find another firm to train you then you train at my one person firm . I am not investing in their studies (they have no student loans) if they don't qualify at the end of it. Only 15% of people got to go to university when I went and that was probably a better system even though my parents had to make my very very tiny minimum grant up to the maximum one which was quite a burden (although at least no fee element in those days).

I've done the same. My child may also have to train with me. Not ideal at all but currently the number of training contracts on offer is way, way below the number of kids expecting to work in law. And the reality is that AI already means we don't really need junior lawyers in the way that we did before.

@sittingonabeach The government will include all post 18 courses in HE. HE is not just degrees. It’s a loose term for doing some form of learning beyond the age of 18. Of course the governments aspirational figure won’t all be degree students.

@HasaDigaIt’s been this way for years. I think we now produce in excess of 25,000 law grads every year (some won’t want training contracts and some will go back to country of origin) but even if half this number want law training positions, that’s double the number of positions available and you have the law conversion students too. It’s been obvious for years that over supply and over promising by universities is a big issue. The destinations of students is woolly and not clear to applicants.

That sounds a good degree, a bit worrying they can’t get a grad position.

I agree. Student loans running at higher interest rates than can be obtained in th market is a scandal.