Rachel Toon graduated from King’s College London two years ago, together with her sights set on a career in law. But securing a coaching contract appeared to require a master’s degree, and with around £29,000 of debt, finding the £10,000 had to do one was impossible. She is now working in educational research, having put her plans for postgraduate study on hold.
While a few of her friends was ready to continue their studies with financial help from their family, Toon doesn’t have this feature: “I’m attempting to save up the cash, but I’m beginning to see this can be probably a dream and never reality,” she says.
It is stories along with this which have prompted education charity the Sutton Trust to label postgraduate education “the brand new frontier of social mobility”. It’s calling for an urgent extension of the undergraduate student loans scheme to incorporate university leavers inclusive of Toon, who cannot otherwise afford to do further study and will lose employment opportunities therefore.
But academics near to Westminster are pessimistic in regards to the probabilities of the govt. following this path. Because the vice-chancellor of 1 elite university said: “There isn’t any money for it.”
In the absence of help from government, leading figures in Russell Group universities are exploring the opportunity of offering their very own private loans, the Guardian was told.
This isn’t just about giving more kids access to postgraduate study; academics also are worried in regards to the falling collection of students identifying taught master’s degrees as a consequence of rising tuition fees.
Since undergraduate fees increased to £9,000 last September, universities have found it hard to justify the price of master’s programmes – typically about £5-6,000.
And there can be worse to return, as the various current cohort of scholars – the 1st to pay £9,000 a year for the total in their degree programmes – may decide they can’t afford to continue studying.
It isn’t yet clear what the loans scheme academics are proposing might seem like. They can look to the MBA sector, where less wealthy students have often struggled to secure funding for master’s degrees, despite the high earnings potential after they leave. Prodigy Finance, which describes itself as a “community-based student finance” company, has stepped into the space to supply private loans to MBA students at five of the country’s leading business schools – including Oxford University’s Said Business School; Cass, based at City University in London; and Manchester Business School.
“The crucial difference for college kids is that we glance at future earnings potential, instead of current income,” says Cameron Stevens, chief executive of Prodigy Finance. “A banker may want a guarantee out of your parents, but our model says: ‘we know if you’ve accepted a spot in this particular course your exit-salary potential is actually strong’.”
Many of the company’s investors are MBA graduates themselves and sponsor particular students, to be able to monitor their progress in the course of the seven-year loan repayment. Investors will also be capable of offer them a task on the end in their course.
Prodigy Finance is exploring whether it may broaden its loans to incorporate more institutions – although still on the elite university level – and more subjects. Nevertheless it could be unlikely to take action without universities offering financial backing. “It’s good for universities to have skin within the game,” says Stevens. “If there is no hope of scholars getting a good job once they graduate, then the university need to be performing some serious soul-searching about what they’re offering.”
But as Prof Steve Smith, vice-chancellor of Exeter University, explains, this can be a risky prospect for universities: “The large question is where does this appear in your balance sheet If a student defaults, the university has to pay that loan and the prices get quite complicated in no time.”
There can also be concern that shouldering student loan liabilities would hamper the university’s ability to secure cheap loans for vital new building projects.
Prof Christopher Snowden, vice-chancellor of Surrey University, agrees: “There’s a cost in taking up loans and you’ve got to hide that cost. There’s also the danger of not getting your a reimbursement. I know many of the Russell Group are taking a look at this, but i don’t believe it’s a very attractive option.”
Meanwhile, the National Union of scholars is furious that these loans would cover only the elite universities. Rachel Wenstone, NUS vice-president for higher education, says: “i feel it is fundamentally very selfish. The risk is that soon postgraduate education will disappear except in an elite group of universities.”
The excellent news is that institutions including Surrey, Exeter and Bristol are planning to extend the variety of postgraduate scholarships they give to very talented students, with the aid of donations from alumni. Prof Eric Thomas, vice-chancellor of Bristol University and president of Universities UK, says: “In view of the truth that undergraduate funding is supported by government loans, it’s much easier to visit alumni and say: ‘Why not fund postgraduate scholarships'”
Thomas has funded a postgraduate student – who’s now a lecturer at King’s College London – out of his own pocket, an experience he describes as “incredibly rewarding”. However, universities say increasing the choice of scholarships will take time and may inevitably only help a relatively small pool of graduates.
Dr Lee Elliot Major, director of policy on the Sutton Trust, says something need to be done to prevent postgraduate education becoming exclusive to a privileged elite: “The relative gains of doing a postgraduate degree over an undergraduate degree are increasing. They matter more in relation to life outcomes, but have become more socially exclusive,” he says. “This is a huge issue that the govt. missed when it brought in higher undergraduate fees. But it truly is the recent frontier of social mobility and something has to switch.”
