Bahram Bekhradnia: If you're off to university, then prepare for the perfect storm

What students will end up repaying is more like a tax than a debt

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Today sees the publication of A-level results in the context of the most uncertain environment for many years. In the same week we will have seen concerns that student "debt" has reached new levels and questions about whether going to university is worth it; and at the same time there is concern that there will be more demand for university places than supply, with large numbers of aspiring students unable to find a place. What is going on?

Taking first the question of student " debt ", the reality is that it is a misnomer. What students owe when leaving university is not debt in the sense of a bank overdraft or credit card commitment that needs to be repaid within a certain time regardless of ability to pay. The reality is that what students owe when leaving university is more like a tax liability than a debt.

Whatever the perceptions of this "debt", young people are not being deflected from going to university, and demand for university places is increasing. That is rational, even if the rewards that were once available are no longer guaranteed. As increasing numbers attend university, so good jobs that may once have been accessible without a degree are reserved for graduates. It may not be rational from the point of view of society as a whole, but from the perspective of the young person attending university it is entirely so. And of course, it demeans university education to think that its only purpose is economic.

This year the problem is not whether young people need to be persuaded to go to university, but the opposite. It is that it is quite possible that more young people will want to go to university than there are places available. This year and next the number of 18-year-olds in the population peaks, so demand would be expected to increase anyway; and on top of that the recession has had the effect that recessions always have of increasing demand – and not just from young people. And, through Sod's law, this spike in demand coincides with a government that is on its uppers and furiously trying to hold down public expenditure. It is a perfect storm.

The problem began last year when the Government found that partly through its own miscalculation – nothing to do with the economic situation – it was over-committed and instructed universities to hold down recruitment this year. It looks very bad if qualified young people are denied university places, and that was a little-noticed, but politically courageous decision. The Government could have told universities to take additional students but without providing the money to do so.

That courage has evaporated in the light of newspaper headlines predicting tens of thousands of disappointed university applicants, and the Government has now said that it will provide maintenance support for 10,000 additional entrants this year.

But the sting in this tail is that while providing maintenance support for students, the Government will provide no more funding for universities to take these additional students. That is extremely dangerous, if it heralds the top of a slippery slope that leads to the Government insisting that universities take increasing numbers of students at a declining rate of funding per student. The Government must not be allowed to let short-term considerations damage the country's long-term interests.

The other sting in this particular tail is that the additional places are only provided for students in science, engineering and business studies. Yes, business studies! It is not obvious how the country benefits if an applicant in history or languages is turned away but one in business studies welcomed.

The consequence of all this is that those who fail to get the required grades – even by a small margin – may not get the place of their choice, whereas in previous years they might have done. But the reality is that almost all young A-level entrants will find a place somewhere, even if not the place they had hoped for. There is unlikely to be wholesale failure visible following the A-level results.

The risk is not so much to those receiving A-level results today, but the potential part-time and possibly mature applicants who may find the places that they might have aspired to taken by others. The incentives are strong for universities to take traditional young applicants, and today's circumstances accentuate the likelihood of this.

Bahram Bekhradnia is the Director of the Higher Education Policy Institute

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