Pity the Postgraduate: why we need a new funding system for education's highest tier

Investing in postgraduate degrees would have huge benefits for the economy

Share

When my future daughter sits on my knee and asks me what I did during #Demo2012, I will not be able to look impassively into the distance like the archetype of 1920s masculinity I ought to be. I will be forced to admit quietly that I was in Primark, happy, finally, to own a £12 pair of shoes.

This is what it’s like to be a postgraduate student.

Like our politicians, I didn’t pay £9000 in fees, and therefore have limited sympathy with anyone who does or will. And, like our politicians, I enjoyed a comically subsidised undergraduate education. In fact, my total income in grants and loans exceeded the income of one of the lecturers who taught me. This lecturer had gone to Cambridge aged 12. We laughed at him for this. He was surprisingly tolerant.

Education is great. It means I can quote Epicurus: “Only the educated are free.” Maybe, Epicurus, but all the same I can’t bring myself to support the campaign for free Higher Education. I didn’t attend yesterday's student demo because, lurking in the back of my mind, was the thought that someone somewhere has to pay for "free" education, since the room in which I study isn’t going to heat itself.

But the pre-Browne review fee regime was not that reasonable, either. When the cost of teaching a degree is greater than £3,000 per pupil, as it was most everywhere under the fee system before 2011, staff effectively subsidised their pupils by getting paid lower wages. Money assigned to universities for research purposes gets put to subsidising learning instead. Those who didn’t go to university subsidise those who do, despite being less well-off on average.

The good of education

None of these concerns is fatal. Education is not a normal good. It has many positive spillovers: societies tend to benefit from having lots of well-educated people. We get a better labour market, with more high-paying jobs. We gain more revenue in tax, allowing better public services. Technology improves faster. We get a better informed citizenry. People’s University Challenge scores go up.

In short, the justification for subsidising undergraduate education is that, even though most of the benefit from an undergraduate degree flows to its recipient, there are still very good social reasons to do so. Undergraduates get a lot of support: they get very cheap loans, fees that remain lower than the cost of the degrees they produce, and some money to put towards maintenance.

Now, let’s take a look at postgraduate education. Here, your average student is considerably less well off.

Universities continue to receive funding for research. This money is meant to go to supporting academics to write books and papers, since such intellectual goods boost the economy. I was told about an engineering lecturer who was doing research jointly with Oxford and Rolls Royce. He was trying to work out how to get the outer casing of a jet engine to remain solid while at a temperature of about 600°C, several hundred degrees above the boiling point of the metal it was made from. This is awesome. However, in practice the government’s research funding has been used to cover all of a university’s costs, academic and non-academic, even though fewer mind-boggling jet engines result. Some of it is put towards support for postgraduates (though the Coalition cut this by about 80%).

The EU provides some funding for a very small number of lucky, able, or well-connected graduates. For postgraduates, loans are repayable very shortly after graduation, and have a typical APR of 9.9%. Banks are less willing to give money to all sorts of people since 2008. For most postgraduates, there is now no financial support at all. This is why I have been walking around for the last month with a hole in my left shoe – and why I missed yesterday’s demo to go shopping in Primark.

“Ah,” I hear you say. “But postgraduates spend all of their time doing useless things. They are indolent, self-indulgent, pretentious, and often bearded. They get high and read books. I’d love to spend my time doing that, but I live in the real world. Quoting Epicurus at me just makes you look like an arse. Why don’t you go shave your beard and get a job.”

Well, there’s no need to get personal. We can measure the social benefits from postgraduate education. CentreForum’s Tim Leunig has shown that the benefits to introducing a system of postgraduate loans are gigantic, while the costs are very small. Leunig’s calculations suggest that every pound spent on postgraduate loans, even on highly conservative assumptions, would yield about £20 to the economy. Compare this to HS2, which, for every pound spent, is forecasted to yield around £1.40, on some pretty adventurous assumptions about the wider economic benefits of the railway.

Cost benefit

Postgraduates do useful things. They get more technical jobs, write books, and learn important skills. The average annual postgraduate wage premium (the difference between the average annual undergraduate salary and the average annual postgraduate salary) is about £5,000. Earnings growth is also faster. Over the course of a lifetime this adds up to about £200,000. Obviously the exact premium will vary from degree to degree. But even arts and humanities postgraduate degrees add to the expected income of the student: critical thinking skills are useful to firms regardless of whether they were honed in the laboratory or the armchair.  

Currently, postgraduates are somewhat more likely to have gone to private school, are somewhat more likely to have an upper class background, and are much more likely to go to a Russell Group university. This isn’t surprising: the costs and uncertainty involved in undertaking postgraduate study are likely to dissuade those with fewer financial resources. The upshot of which is that making postgraduate study more affordable should improve social mobility.

Once, before tuition fees, Thatcher visited Oxford. The Oxford chemistry alumnus asked a student what she was studying. “Ancient Norse”, said the student. “What a luxury,” replied Thatcher. But the Iron Lady was quite wrong. Qualifications can have considerable economic value even when they appear esoteric. So it is with postgraduate education. We need a better funding regime.

React Now

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

Austen Lloyd: Commercial Property Lawyer - Cheshire

Excellent Salary: Austen Lloyd: CHESHIRE MARKET TOWN - An exciting and rare o...

Austen Lloyd: Residential Property Solicitor - Hampshire

Excellent Salary : Austen Lloyd: NORTH HAMPSHIRE - SENIOR POSITION - An exciti...

Recruitment Genius: Gas Installation Engineer

£29000 per annum: Recruitment Genius: A Gas Installation Engineer is required ...

Recruitment Genius: Domestic Gas Technical Surveyor

£28000 per annum: Recruitment Genius: A Domestic Gas Technical Surveyor is req...

Day In a Page

Read Next
Michael Brown was shot and killed by police in August  

Ferguson: The sad truth is that Michael Brown was killed because he was a black man

Bonnie Greer
A protestor poses for a  

Ferguson verdict: This isn't a 'tragedy'. This is part of a long-running genocide of black men in America

Otamere Guobadia
Homeless Veterans Christmas Appeal: Drifting and forgotten - turning lives around for ex-soldiers

Homeless Veterans Christmas Appeal: Turning lives around for ex-soldiers

Our partner charities help veterans on the brink – and get them back on their feet
Putin’s far-right ambition: Think-tank reveals how Russian President is wooing – and funding – populist parties across Europe to gain influence in the EU

Putin’s far-right ambition

Think-tank reveals how Russian President is wooing – and funding – populist parties across Europe to gain influence in the EU
Tove Jansson's Moominland: What was the inspiration for Finland's most famous family?

Escape to Moominland

What was the inspiration for Finland's most famous family?
Nightclubbing with Richard Young: The story behind his latest book of celebrity photographs

24-Hour party person

Photographer Richard Young has been snapping celebrities at play for 40 years. As his latest book is released, he reveals that it wasn’t all fun and games
Michelle Obama's school dinners: America’s children have a message for the First Lady

A taste for rebellion

US children have started an online protest against Michelle Obama’s drive for healthy school meals by posting photos of their lunches
Colouring books for adults: How the French are going crazy for Crayolas

Colouring books for adults

How the French are going crazy for Crayolas
Jack Thorne's play 'Hope': What would you do as a local politician faced with an impossible choice of cuts?

What would you do as a local politician faced with an impossible choice of cuts?

Playwright Jack Thorne's latest work 'Hope' poses the question to audiences
Ed Harcourt on Romeo Beckham and life as a court composer at Burberry

Call me Ed Mozart

Paloma Faith, Lana del Ray... Romeo Beckham. Ed Harcourt has proved that he can write for them all. But it took a personal crisis to turn him from indie star to writer-for-hire
10 best stocking fillers for foodies

Festive treats: 10 best stocking fillers for foodies

From boozy milk to wasabi, give the food-lover in your life some extra-special, unusual treats to wake up to on Christmas morning
'I have an age of attraction that starts as low as four': How do you deal with a paedophile who has never committed a crime?

'I am a paedophile'

Is our approach to sex offenders helping to create more victims?
How bad do you have to be to lose a Home Office contract?

How bad do you have to be to lose a Home Office contract?

Serco given Yarl’s Wood immigration contract despite ‘vast failings’
Green Party on the march in Bristol: From a lost deposit to victory

From a lost deposit to victory

Green Party on the march in Bristol
Putting the grot right into Santa's grotto

Winter blunderlands

Putting the grot into grotto
'It just came to us, why not do it naked?' London's first nude free runner captured in breathtaking images across capital

'It just came to us, why not do it naked?'

London's first nude free runner captured in breathtaking images across capital
In a world of Saudi bullying, right-wing Israeli ministers and the twilight of Obama, Iran is looking like a possible policeman of the Gulf

Iran is shifting from pariah to possible future policeman of the Gulf

Robert Fisk on our crisis with Iran