Recent polling conducted by the Good Growth Foundation (GGF) has unveiled that almost half of working-class students considering applying to university are deterred by concerns over the perceived value for money.
The research revealed that 45% of 16 to 18-year-old students from lower-income households (C2DE) are hesitant to pursue higher education due to the financial implications associated with tuition fees and resulting debt.
In contrast, 40% of these students are not dissuaded by the cost of obtaining a degree. This sentiment differs among wealthier households, with 60% believing that a degree offers good value for money, while only 33% have reservations.
Overall, more than a third of students aged 16 to 18 in schools and colleges across England and Wales express reduced inclination towards university applications due to financial constraints.
Currently, universities can charge a maximum annual tuition fee of £9,535 for standard full-time courses. The Government’s announcement of inflation-driven fee increases over the next two years is expected to push fees closer to £10,000. Amid concerns about escalating costs, the Education Secretary has committed to reviewing Plan 2 student loans.
The GGF advocates for a “Graduate Guarantee” to address the imbalance in the student loan system and ensure that graduates retain a larger portion of their earnings amidst the ongoing cost-of-living challenges.
Under this proposal, the repayment threshold would be immediately raised from £29,385 to £33,542, reinstating the real value of the threshold set in 2018 and reversing recent freezes. Similar to the pensions triple lock, the Graduate Guarantee would legislate for annual inflationary threshold increments.
Graduates with Plan 2 loans earning below the threshold would cease repayments, while those earning above it would save £374 annually.
Louisa Dollimore, Director of Strategy at The Good Growth Foundation, emphasized the need for urgent reform in the student loans system to ensure that financial concerns do not hinder individuals from pursuing their educational aspirations.
A government spokesperson highlighted ongoing efforts to enhance the fairness of the student finance system by eliminating substandard courses, reintroducing targeted maintenance grants, and capping interest rates on student loans to provide students with value for money and protect lower-earning graduates through income-linked repayments.