A recent survey conducted by the Good Growth Foundation (GGF) has unveiled that almost half of working-class students contemplating university applications are deterred by concerns about the value for money associated with higher education. Specifically, 45% of 16 to 18-year-old students from lower-income households expressed reservations about the worth of pursuing a university degree, citing concerns over tuition fees and resulting debt.
In contrast, 40% of these students are not dissuaded by the financial aspect of obtaining a degree. This sentiment differs among wealthier households, where 60% still perceive a degree as a sound investment, with only 33% expressing doubts.
The survey further revealed that over a third of students aged 16 to 18 in schools and colleges across England and Wales are less inclined to apply to university due to financial considerations. Currently, universities can charge a maximum annual tuition fee of £9,535 for standard full-time courses, with fees projected to rise close to £10,000 in the coming years.
The GGF is advocating for a “Graduate Guarantee” initiative to revamp the student loan system and enable graduates to retain more of their earnings amid the ongoing cost-of-living challenges. This proposal includes raising the repayment threshold from £29,385 to £33,542 and implementing inflationary increases in the threshold, akin to the pensions triple lock system.
Under the Graduate Guarantee, graduates with Plan 2 loans earning below the threshold would cease repayments, while those earning above would save an average of £374 annually. Louisa Dollimore, Director of Strategy at The Good Growth Foundation, emphasized the need for urgent reforms to alleviate concerns about long-term debt burdens hindering individuals’ financial stability and aspirations.
In response, a government spokesperson highlighted ongoing efforts to enhance the fairness of the student finance system by addressing concerns about loan repayments, ensuring value for money in education, and safeguarding lower-earning graduates through income-linked repayments and debt forgiveness at the end of repayment terms.