University a challenge as finance changes revealed

Student finance for Wales has been radically reformed. But what does this entail? NICK HILLMAN gives his verdict on the changes

THE Welsh Government’s recent overhaul of student finance could be viewed as a textbook example of reform. The reality, however, is that although these reforms do represent some progress, there is also a lot of bluster and spin.

It started off well. The Welsh Government established an independent panel of experts, who were given sufficient time and resources to do a proper job.

Transparent and ongoing information was provided to voters, giving an indication of the Government’s general views on how universities should be financed. Students were consulted along the way.

Then, when the experts delivered their report, the Welsh Government took time to digest their findings, implemented the bits they liked and tweaked the bits they were less keen on.

As a result of this five-year process, new Welsh students going to higher education this year will face a different funding regime from their older siblings’. There are two big changes.

First, the old tuition fee grant is being abolished. This reduced the headline tuition fee that students paid from £9,000 to less than half that figure.

In future, students will generally need to take out a tuition fee loan for the whole amount. Secondly, support for living costs is being changed so that everyone will be entitled to a maintenance grant, worth a minimum of £1,000, while maintenance loans are also being increased for many students.

The changes are being watched very closely in England, Scotland and Northern Ireland.

Professor Janet Beer, the president of Universities UK, has said: “It looks to me like they have taken the best bits of other funding systems and they have put them together in a very sensible package.”

There is much sense in that. The new system ensures Welsh universities will continue to be well funded.

It enshrines student mobility, so that students from Wales can continue to take their funding with them to other parts of the UK.

Perhaps most importantly, it puts part-time students and, eventually, postgraduate students on the same system as young full-time undergraduates.

But conversations about the new system generally stop there. They rarely progress to the more problematic features of the new system, where there are three major concerns. First, the poorest students will have £500 less cash in hand in 2018 than in 2017. Secondly, because tuition fee loans are increasing for all and maintenance loans are going up for many, the debt taken on by each Welsh student will rise, in some cases by 85% to £51,000. Thirdly, for the first time, middle-class and wealthy parents are no longer expected to contribute to the living costs of their offspring. At a time of unprecedented concern about intergenerational fairness, this is a change of staggering importance and worthy of much more debate than it has received to date. It is very hard to argue that all the money being spent on the new package is being spent efficiently. It is the Welsh Government’s successful avoidance of discussion of these three major concerns that represents its biggest future challenge in convincing voters of their sincerity in presenting these reforms. In short, the benefits of the new package have been oversold. Setting the positive features of the new Welsh system against the negative features of the English system, where part-time numbers have collapsed and poorer students take on bigger debts, has had the effect of pulling the wool over people’s eyes. The Welsh Government will, quite rightly, say that their hands are bound by the devolution settlement.

Welsh Labour – like Labour in England – remains committed to ending tuition fees but they do not have the money to do it.

Were wholesale student funding policy changes to be enacted at Westminster, by a government of any political persuasion, then this situation could possible change.

But that is not the only potential scenario that could kill off the new student funding arrangements before they become embedded, or which could mean the new Welsh system is less sustainable than Welsh universities hope. England is in the midst of reviewing all post-18 education and funding, which could have big knock-on consequences for Wales, if – for example – tuition fees and loans are reduced there. Moreover, the Office for National Statistics is reviewing whether student loans should continue counting as current public spending rather than remaining hidden off the UK’s balance sheet.

If that were to happen, support systems that rely on students taking out large debts, backed by loans with generous repayment terms, may begin to look too expensive to survive.

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