When the infamous slogan “education, education, education” was uttered by Sir Tony Blair in 1996 at the launch of Labour’s priorities for government in Blackpool, few could have foreseen the problems facing our bloated higher education sector today.
In a report published last year by the Tony Blair Institute for Global Change, the former prime minister’s think tank acknowledged that a significant portion of Britain’s post-2008 economic growth had been on the back of the expansion of universities and colleges.
The UK has “come to rely on the expansion of education to prop up economic growth”, the foreword said. It went on to recommend that the sector be expanded further, from approximately 53pc of young people going to university today to 60pc by 2030 and 70pc by 2040.
Just a year after Sir Tony’s target of putting half of all young adults through higher education was finally reached in 2019, then education secretary Gavin Williamson announced that the “absurd mantra” would be dropped.
It didn’t seem to matter that nearly a decade of Conservative education policies had been responsible for pushing that target over the line. In 2015 the government abolished the cap on the number of students each university was allowed to enrol.
When tuition fees were raised in 2010 from £3,225 a year to £9,000 and again to £9,250 in 2017 it came with the proviso that universities would be expected to use the extra funding to expand access to higher education.
But England’s higher education funding model is unlikely to remain sustainable for much longer. Tuition fees, which are currently frozen, will leave universities and colleges £2,500 out of pocket for every home student this year, with the shortfall expected to rise to £5,000 in the academic year between 2029 and 2030, according to the Russell Group of 24 leading British research universities.
At the same time, the promise of a university education has become increasingly tenuous for students. During Britain’s national lockdowns students were banned from campuses and learning was confined to virtual Zoom and Microsoft Teams meetings, with in-person lectures only gradually returning at many institutions long after restrictions were ended.
Universities are now facing a wave of legal action from graduates who paid full price for online teaching.
The University and College Union is in its fifth year of industrial action, which has lost students hundreds of thousands of teaching hours. The union’s latest tactic, a boycott of marking assessments, has seen scores of students graduating without a degree this year.
Striking lecturers have argued that revenue earned by universities is not being reflected in their wages, while senior leadership at many institutions preside over six-figure salaries. In February, universities and unions agreed to bring forward a pay settlement for next academic year, worth 5 to 8pc, in recognition of “urgent inflationary pressures” facing staff.
The Blair-era expansion
Following Labour’s landslide victory in 1997, the government inherited a university system that only took in a minority of school leavers.
Approximately 20pc of English students went on to study at university by the age of 30 at the start of the decade. Earning a degree was seen largely as a preserve of the country’s elite, even with the ambitious reforms enacted by Sir John Major, which abolished the divide between the polytechnics and universities.
Baroness Estelle Morris, who as education secretary oversaw part of New Labour’s expansion of higher education between 2001 and 2002, said that critics today have “legitimate” questions about the reforms, which have since allowed millions more people to hold degrees.
“I’m not uncritical. I am absolutely not saying that every course that was started during this period of expansion was worth doing. [However] I cannot see one single argument against having half of our people having studied to degree level.
“To be honest if you freeze the number I don’t think the middle classes were going to stop their children going to university. I don’t know how you change the social mix or widen participation if you kept the numbers as they were.
“I think this question about the expansion of higher education is legitimate. I think there’s a legitimate argument there… but we needed more people achieving that degree level.” She said the Government should have pursued alternative paths to degree level qualifications, such as diplomas, which don’t require going to university.
“If you’re working really hard to raise standards in schools you need a destination for the children who are doing better than they did before. When I visit schools I try not to ask youngsters questions that assume they were going to university. If I asked them 20 years ago I probably would ask that.
She said that alternatives to university, such as apprenticeships, have provided good career paths that do not require taking on debt but that they lacked the life experience that university offers.
“One of the things I worry a little bit about is I can’t think of any other post-18 study that provides that [experience]. You don’t get that university life. Children from poorer backgrounds now because of the debt they have they’re not leaving home. I worry that the children of the more affluent will still get that lifestyle and those from poorer backgrounds won’t leave home because they can’t afford it.
She added: “We also thought that there needed to be more diversity in degree level provision. We talked about a two year course with less holidays. We talked about employers sponsoring their employees to go to university.”
Debt woes
Drawing in ever-increasing numbers of students has turned higher education into a booming business. Universities in England contribute around £95bn to the economy and support more than 815,000 jobs, according to consultancy Frontier Economics.
Yet the surge in wealth generated by higher education providers has come under the backdrop of a mountain of student debt accumulated by generations of graduates. Between 2022 and 2023, student debt surpassed £200bn, according to data from the Student Loans Company. Despite the growth of the sector to become a pillar of the British economy, average earnings of both graduates and postgraduates have been steadily declining since 2007, data from the Department of Education shows.
Russell Group vice chancellors handed themselves a 6pc pay rise last year, making the average salary £413,000 a year, amidst protests from lecturers in response to a proposed 3pc pay offer, according to analysis of published accounts by The Sunday Times.
Imperial College London topped salary rankings for its outgoing president Alice Gast, who received a 35.5pc payrise to £714,000 last July.
During the Covid-19 pandemic, Russell Group universities were revealed by The Telegraph to have amassed a £2.2bn cash surplus as a result of spiralling grade inflation, which saw school-leavers gaining record places at the institutions after cancelled exams meant they were handed their predicted grades in lieu of results.
Alarm bells are now ringing over the quality of some degrees. Rishi Sunak, the Prime Minister, recently warned that some students were being “ripped off” by institutions over degrees that do not lead to decent salaried jobs and has announced plans for the universities regulator, the Office for Students, to take future earnings into account when deciding whether degrees were failing participants.
Nick Hillman, director of the Higher Education Policy Institute, said: “I personally think that some of the focus the Government and regulator have put on quality is right. The alternatives to university are pretty few and far between. The cohort graduating this summer have had a pretty torrid time. They’ve been plagued by industrial action [and] they’ve been through Covid.
“Some of those courses… creative arts courses and some business courses have very low wage returns. People who do fine art at university are not expecting to be millionaires. They are doing it for the love of the subject.
“People who say too many people are going to university say ‘do vocational courses’, but business and art are vocational courses. So they are saying [both] don’t do a vocational course, [and] do a vocational course.
“I personally think university is still very much worth doing for most people. It doesn’t work out for everybody. [However] All the evidence about the likelihood of being unemployed during the financial crisis or the covid crisis suggests having a degree on average stands you in pretty good stead.
He added: “I also think there are a lot of people that now insist you have a degree. If you want to be a nurse you basically need a degree. Policing was moving in that direction for a bit. Teaching never used to be a graduate profession.”
Sam Freedman, a senior fellow at the Institute for Government, another think-tank, said: “The big thing that would change the view at the moment is if the employers change their practices.
“It’s really driven by the labour market. There are so many jobs that are graduate only, if more of those jobs became accessible to people who didn’t have degrees I think the dynamics would change quite quickly.”
“One thing that hasn’t been talked about much is that the loan cost is going to get quite a lot more expensive from September. I think that may have an impact over time on people’s view of affordability. Under Blair and Cameron the tuition fees repayment structure was generous but not too burdensome in terms of when you had to start paying off with your salary.
“Now the cutoff rate has been extended [from 30 to 40 years before being written off] and repaying back from a lower salary, so the amount graduates are paying back overtime is getting higher. It’s just going to be more burdensome and more noticeable early in your career. It’s going to be from £25,000, which most graduates will earn pretty early.
He added: “For most young people it will still be worth doing a degree. The growth in university admissions over a very long time has been driven by very high demand from students and parents who know there is a wage premium. If it stopped being true you would see that demand drop away.
The latest “Plan 5” student loans, due to apply to students going to university from September 2023, will see the threshold at which graduates start repaying debt drop to earnings above £25,000 a year, down from the old threshold of £27,295. The period after which loans are written off, currently 30 years, will rise to 40, meaning graduates will pay more for longer and in total.
Graduates pay 9pc of their income above the threshold (on top of the usual income tax and National Insurance). Hargreaves Lansdown said a student starting a three-year degrees today could expect to graduate with a student loan of up to £61,000.
Broken dreams
When Andy Davis, who left Britain to live in Canada for five years to work in aviation, sent his daughter to study at Durham University in 2019 he earmarked £10,000 a year from his savings to support her studies.
“My daughter has always been a hard worker and a high-achiever. I was looking forward to seeing her graduate with a degree, most likely a First. Covid was so hard for her, she started university at Durham in September 2019, so suffered from isolation and loneliness when lockdowns commenced in early 2020.
“This was a hard time for all the students there and teaching staff seemed to have a longer Covid break than the rest of the country. However, no fees were ever returned.”
He said that his daughter, who graduated without her degree certificate this summer due to the marking boycott, faces “ridiculous state of affairs” as she waits to find out what degree she will be awarded.
“Strikes took place earlier in the year and have been rectified with large pay rises. This action appears to me to be pointless and made without any thought of these students who had to cope with a two year interruption to their university lives.”
At the time Durham University said it was “deeply disappointing” that some of its staff had taken part in the the marking boycott.
Emily Bell, a English Literature graduate at the University of Glasgow who received her final result without having all of her work marked, said: “I handed in my final assignment ten days after it [the marking boycott] started. I got my degree classification after the deadline for them to return stuff, I got my dissertation after that and really weak feedback on how it was written.
“No-one was as excited [to graduate] as we expected. It was so anticlimactic.”
Ollie Lewis, who graduated from the University of Edinburgh this summer, was handed little more than an apology during the ceremony. “What a shambles this all is. Walking across the graduation stage to be handed a measly apology letter was, to put it mildly, very disappointing.
“Four years of work and nearly £40,000 worth of fees ended with a graduation ceremony which featured parents shouting “resign” at senior management and countless student protests. I think trust has completely broken down between universities across the UK and students, including potential future students.
“Why should anyone believe that they will be given a degree on time in the future? Whatever the difficulties of this industrial dispute, universities have failed students and there will now be considerable clamour for compensation.”
Those entering the workforce this year, or returning to university for further study, will have become accustomed to the uncertainty that comes with being a student in Britain today.
From career prospects and finding ways to stand out in a crowded field of qualified graduates, to the cost of repaying loans, which surpassed £1,000 a year for the average graduate for the first time last year according to Hargreaves Lansdown, university degrees are a life-long financial commitment that appear to be losing their ability to change lives for the better.