Degrees of Debt

Report Overview

This study by Philip Kirby compares tuition funding arrangements, debt at graduation and earnings outcomes for full-time domestic undergraduates in eight Anglophone countries: the UK (England, Wales, Northern Ireland and Scotland), United States, Canada, Australia and New Zealand. It finds that, for the typical student, average debts are the highest for English students.

Key Findings

  • The typical English student faces debts of over £44,000 at graduation. Even compared with graduates of US private for-profit universities (who graduate with about £29,000 of debt), estimates suggest that English students fare worst.
  • However, the vast majority of English students’ study-related debt is held by the state, which has relatively clear repayment conditions compared to other Anglophone countries. In the US, only a minority of students are repaying under income contingent arrangements.
  • Despite this, the fact that English students now face some of the highest tuition fees in the world, and the highest average debts at graduation, should be cause for concern, not least because the number of part-time and mature students enrolling at UK institutions across recent years has dropped precipitously.
  • While full-time undergraduate university enrolment has recovered since the imposition of £9,000 fees in 2012, university needs to remain a viable option for everyone, especially those from poorer backgrounds, who are disproportionately underrepresented across the UK professional landscape.

Recommendations

  1. The BIS select committee should monitor HE funding, especially its effect on disadvantaged pupils, including mature and part-time students whose enrolment rates have dropped significantly in recent years
  2. There needs to be greater coordination between UK governments on HE policy, given its complexity and variance, fostered by regular meetings between representatives of each
  3. The OBR should investigate whether the current student loan system offers value for money to both the student and taxpayer, especially given recent reforms announced in the 2015 budget and spending review
  4. Universities should spend at least 10% of their outreach budget on evaluating strategies that work best in widening participation

April 28, 2016