Sometimes you just need to call something out for what it is. English undergraduate education is a hot mess that works in the institutional interests of universities, not young people.
Yes, there are bastions of excellence. But, in expanding an elite system that served a small slice of society a few decades ago to cover about half of young people, politicians have given far too little thought about how to do this in a way that serves students, not universities.
The announcement by the education secretary, Bridget Phillipson, that tuition fees will increase from £9,250 to £9,535 is only the latest patch for a system that requires more fundamental reform.
The cross-party political instinct to expand post-18 education and training to more young people has been the correct one. But it has been done badly. The costs of expansion have been shifted away from taxpayers towards graduates, and it has been achieved by lifting caps on student numbers so universities can effectively recruit as many undergraduates as they want, and bank the fee income.
Under the current loans system, a graduate with median lifetime earnings who started in 2024 is forecast to repay £45,600 over their lifetime, after interest and any loan write-off – a bit less than the £52,300 that the typical graduate who started in 2022 under the previous system is forecast to repay. Those repayments essentially take the form of an extra 9p on the pound of income tax on all income above the repayment threshold, until the loan and accumulating interest is repaid, or written off.
Phillipson’s fee increase won’t make much difference to the typical graduate, who will end up repaying a few hundred pounds more over their lifetime. Or to universities, which say it will result in just an extra £18m year for the sector after accounting for the impact of the rise in employer national insurance announced in the budget. As patches go, it’s on the incremental side. Labour now needs to turn its focus to the deeper problems.
First, are the huge sums that many young people will end up repaying worth it? Universities point to data that suggests that, for graduates who went to university 20 years ago, there’s an average lifetime graduate premium of £130,000 for women and £240,000 for men. But that’s just an average – even back then, three in 10 of those graduates earned less over their lifetime than non-graduates. Since then, that graduate premium may well have declined.
Completely unanswered is the question of how much any increase in earnings comes from the fact that someone has a degree certificate – and there has been a qualifications arms race in the sense that there are jobs today that require degrees that 40 years ago did not – and how much from the skills they develop through their course.
We have no idea what courses add in terms of real skills formation. There are no meaningful quality controls on degree courses, and, because universities award their own degrees, effectively marking their own homework, degree classification is not a reliable indictor. But we do know that almost a third of graduates do not end up in graduate jobs.
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This all means that some of the most selective universities can just rest on the fact that they pick young people with the best A-level grades, who go on to the best-paid jobs, without ever accounting for the quality of what they provide in the intervening three years.
And, as Iain Mansfield (@edrith) of Policy Exchange has argued, the incentives for less selective institutions are to get as many young people through the door to increase their fee income regardless of whether these courses are good for them. There will almost certainly be excellent courses across the sector, and also some very poor ones. With no independent arbiter of quality, we simply don’t know.
Second, how do we know whether universities are spending their income – the bulk of which is made up of the future earnings of young people – in an efficient way? Their per-student funding has yo-yoed: it jumped by about 50% when fees were tripled in 2012 but inflation has now taken it back down to 2011 levels.
Universities tell a hard-knock story of how their funding barely covers their costs. But there is an extraordinary lack of transparency about how this money is spent. Fees from cheaper-to-provide courses will end up subsidising more expensive Stem (science, technology, engineering and maths) courses, but to what tune? The fact that schools provide a more intensive form of education more cheaply per head than universities gets dismissively tossed aside but I’ve never heard a convincing response since I first raised it a few years ago.
We’ve created a system where we ask students to sign up to effectively pay tens of thousands of pounds of higher income tax than those 30 years older than them did, on a vague promise that “it’ll be worth it”. There is every chance that they are paying for the privilege of being stratified by their A-level grades into a system that ends up doing more to cement than tackle socioeconomic disadvantage.
No one is really looking out for the interests of young people in the face of an extraordinarily powerful university sector, with prominent defenders in parliament, that asserts that the undergraduate offer is consistently excellent against a backdrop of government incentives that encourage the watering down of quality.
The genius PR move by those who defend the system has been to portray anyone questioning it as being anti-aspiration. But I would argue that it is pro-aspiration to ensure that young people are not being mis-sold poor-quality degrees and to ask tough questions about who, exactly, is holding universities accountable for how they today spend this generation’s future earnings? That’s the really hard question a Labour government needs to answer.
Sonia Sodha is an Observer columnist
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