On the subject of student debts (Student debt is a generational injustice. Why are we squeezing graduates harder than the super-rich?, 16 February), Gaby Hinsliff writes: “If the government has better options, then let’s hear them sooner rather than later.” Any better option must address the problem that the courses that universities offer – brilliant though they mostly are – aren’t what the economy needs and so aren’t maximising returns.
Universities are funded to offer the courses students want to study, not what society and employers value most. Understandably, young people pursue choices based on their ambitions rather than the national interest. This creates an oversupply in forensic science, for instance, and skills shortages in engineering.
To balance students’ opportunity with labour market needs, employers need skin in the game of higher education. Rather than graduates being left to pay off high debts, employers should contribute. They do already in the form of higher salaries for graduates, some of which is “taxed” at source as loan repayments. Instead of paying their debts, what if employers paid their fees directly to the unis where their graduate employees studied?
This would incentivise universities to match future skills needs and maximise the employability of every student, whatever they study. Employers would be able to influence courses, but not control them because universities would still share long-term interests with their graduates.
This isn’t a pie-in-the-sky proposal. It is an idea that has gathered momentum among economists and thinktanks to the point where a proposal I wrote for the Higher Education Policy Institute was modelled by independent economists in 2024 and found to provide billions in taxpayer savings while slashing student debts. It would cost employers no more than the current system for the next 25 years and would create sustainable funding for our higher education sector.
Johnny Rich
Chief executive, Push
Gaby Hinsliff isn’t quite right. It wasn’t the peace dividend, generally regarded as arriving in the early 1990s, that made free university education possible. Grants arrived in the 1960s and remained until the Blair government decided that everyone should have a degree, without considering that that made one effectively worthless. Funding 5% of school leavers is sustainable, funding 50% isn’t.
The trouble with the present system is that it’s effectively Schrödinger’s loan – a debt that isn’t a true debt but is effectively a tax. It thus becomes a millstone that will last most graduates the whole of their working lives. The present government didn’t institute the system, but is saddled with resolving it while also dealing with a broader affordability crisis with many other areas making greater demands for a solution.
Forgiveness is not really an option, although, given that most of the capital will not be repaid, replacing the interest with a tax would probably raise the same amount of money. And that’s before we reform the visa system so that universities can boost their funding by recruiting foreign students.
Henry Malt
Huntingdon, Cambridgeshire
Amid the discussion as to whether degrees are affordable or value for money, it is interesting that Suella Braverman (as Reform UK’s spokesperson on education, skills and equalities) wants 50% of young people to go into trade jobs instead of university. Part of the answer must surely be the neglected idea of degree apprenticeships, where you learn as you earn.
In my career with a Hampshire local authority supporting businesses and skills, I was impressed that a world-famous lift manufacturer, a health insurance business and a local university all promoted degree apprenticeships – but, sadly, these were the exceptions rather than the rule.
The government needs to redirect some of its funding to encourage employers to create more degree apprenticeships. Perhaps instead of Tony Blair’s famous ambition that 50% of young people should go into higher education, we need 50% to become qualified to at least level 5 – whether in plumbing or philosophy?
David Gleave
Winchester
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