A Polished Diamond?

(Pic : Wales Online)

A major review into tuition fees and student finance reported back earlier this week, authored by the Vice Chancellor of Aberdeen University, Prof. Ian Diamond.

The process started in 2014 under the former Education Minister, Huw Lewis, and an interim report was published in July 2015. The final full report is available here (pdf), while an executive summary is available here (pdf).

The Welsh Government have also provided an infographic to explain the changes (pdf).

Here's what the Education Secretary, Kirsty Williams (Lib Dem, Brecon & Radnor), had to say to AMs earlier this week:

Background to the Diamond Review

As mentioned the review was ordered by Huw Lewis, with the overarching aim to simplify the current system of student finance – both in terms of tuition fees and maintenance finance. The scope of the review covered undergraduates, postgraduates and higher-level vocational courses.

As you probably already know, at present no undergraduate from Wales has to pay more than £3,900 a year out of their own pocket (in the form of a tuition fee loan) regardless of where in the UK they choose to study. The Welsh Government makes up the rest of the costs where universities charge the full £9,000 a year (soon to be £9,250 in England) in the form of a non-repayable tuition fee grant.

In their evidence gathering, the Diamond Review found four emerging overarching themes:

• The Welsh university sector is held "in high regard" and there's a clear ambition from across the sector for universities to be internationally competitive and a destination of choice for students from both within and outside Wales.
• A majority believed the status quo couldn't continue; there are worries about a developing funding gap between universities in Wales and the rest of the UK and that current student finance arrangements are "unsustainable".
• There was a lack of consensus on the way forward, but there's recognition of the "difficult choices ahead".
• There are concerns that changes to university finance in England will impact Wales, with a belief that the £9,000 a year tuition fee doesn't provide value of money to students, yet still isn't enough to deliver high-cost subjects.

At the moment, nine universities (including the Open University) operate in Wales and there were just under 133,000 enrolments to higher education courses (including OU) in 2014-15, of which some 28,105 were postgraduates. Just under 41,000 enrolments were part-time.

About 24,100 Welsh-domiciled students chose to study at universities outside Wales, while 32,700 students from elsewhere in the UK chose to study in Wales – so Wales is a "net-importer" of students though the majority of Welsh-domiciled students study in Wales.

In 2014-15, the total amount of student support to full-time students in Wales was £755.3million, and some £238million of this was the tuition fee grant. £314.5million was also provided in maintenance loans and Welsh Government learning grants. £13.5million was provided in support to part-time students.

The majority of the tuition fee grant money (£144.7million) stays in Wales, but £93.9million (~40%) went to non-Welsh, presumably English in the main, universities. However, tuition fee income from students studying in Wales from the rest of the UK (who are ineligible for tuition fee grants) topped £129million in 2014-15, so it balances itself out and there's a net increase in income.

The outstanding student loan balance in Wales currently stands at £2.9billion, and the average debt carried by students graduating in 2015 was £19,010.

The Key Recommendations

It's expected the measures, if pursued by the Welsh Government, will be introduced for the 2018-19 academic year at the earliest, which would affect students who've just started sixth form.

Full-time undergraduates:

• The maximum £9,000 a year tuition fee charge will remain unchanged.
• The tuition fee grant (where the Welsh Government makes up the difference between what the student pays and what the university charges) will be scrapped and replaced with tuition fee loans. This will free up an estimated £945million, but would cost an extra £135million in loan write-offs.
• Where the cost of providing a course is greater than £9,000 a year (i.e. medicine, physical sciences), the Higher Education Funding Council for Wales (HEFCW) will provide a top-up per student of £660 a year.
• All full-time Welsh-domiciled students will be eligible to receive a minimum £1,000 a year maintenance grant.
• Additional top-up grant money will be available (based on household incomes), up to a maximum of £10,125 a year for a student studying in London to £6,885 for those living at home; everyone else would be eligible for up to £8,100. Only students whose household income is over £80,000 would be ineligible to receive anything other than the £1,000. This is estimated to cost £519million.
• Maintenance loans will be available for students from higher income households, equal in value to the maximum grant.
• Student maintenance payments will be paid monthly to enable "more effective financial planning" (I'd expect Bethan Jenkins to have a close eye on that).

Part-time students:

• Part-time students will be eligible for a pro-rata version of the universal £1,000 grant and access to maintenance loans too – but the household income threshold to receive maximum support will be higher than that for full-time students.
• Part-time students will be charged moderated fees in a way to ensure investment in part-time students is the same as full-time students.

Postgraduates:

• Universities will be able to set their own postgraduate fees, with a maximum fee agreed with HEFCW.
• Postgraduate taught students will receive the same fee and maintenance support as full-time undergraduates. This is estimated to cost £22million.
• The creation of 150 postgraduate/doctoral research scholarships a year (worth £25,000) funded in a three-way partnership between Welsh Government, the university they're studying at and either a private, public or third sector partner.

Other key recommendations:

• The Welsh Government should support the creation of employer-sponsored higher education courses based at further education colleges, with an initial public investment of £1million.
• Student support will continue to be provided to Welsh-domiciled students who choose to study elsewhere in the UK or EU (Brexit pending), with a pilot scheme to establish whether it's possible to provide global support.
• Welsh quality research funding should be maintained at £71million a year, and universities should demonstrate to HEFCW how they use these funds strategically.
• Annual funding for Coleg Cenedlaethol Cymraeg should be maintained at £5.8million a year (there's a forthcoming separate review there).
• The Learned Society of Wales should receive annual funding of £1million.
• A separate system of student finance administration for Wales should be scoped out.

Conclusions

Lib Dem Minister + Tuition Fees = .....good news for once?
(Pic : BBC Wales)

I'd imagine Kirsty Williams breathed a sigh of relief when the report was published.

The Lib Dems haven't covered themselves in glory when it comes to tuition fees; instead they've covered themselves in something brown, smelly and bovine in origin. There was a real prospect of a Lib Dem minister delivering a knife into the back of students once again, but that hasn't happened. So politically-speaking this might go some way towards hastening the Lib Dem "recovery" in Wales as memories of Nick Clegg fade.

It's also worth pointing out that the plans will need to go out for consultation, though I suspect there won't be much in the way of political opposition in the Senedd.

The big story is the tuition fee grant is gone and Wales won't be offering "generous subsidies" to English universities anymore as they'll be on equal footing under this proposed system, but there would still be support available regardless of where someone chooses to study. In addition, some of the other measures – particularly when it comes to part-time students and postgraduates – could be called progressive, maybe even over-optimistic.

The measures also cost broadly the same as current policies and might even free up more money, so there's unlikely to be a major impact on the Welsh budget either way and it should provide some assurances to Welsh universities on their own funding – though I don't see the funding gap with England closing dramatically in light of English fees rising. The costs could also fluctuate up or down depending on the change in the number of students.

The real question is what happens to those students? Under this proposed system they'll have to front-load more debt, but the measures on maintenance support should soften the blow, particularly for those from poorer backgrounds. Student debt is unlike other forms of personal debt in that you only pay back what you can when you can, so that shouldn't necessarily put anyone off.

Nevertheless, with a bubble starting to develop in maintained student accommodation (which will eat away significantly at maintenance grants) and the prospect of wages being syphoned for several decades post-graduation, prospective students are unlikely to be 100% happy with what's on the table. The offer of grants to support living costs might mask the fact that they could be "worse off" in the longer-term (in terms of debt more than anything else) than they are at present.The risk will come if the student loan book is fully privatised and more commercial terms are added like higher interest rates.

My concern is the £9,000 a year fee is too high a price to pay for what students get, and we should really be looking at accelerated two-year undergraduate degrees for some subjects (or a three year combined masters) as a way forward (with exceptions for subjects like medicine and dentistry).