Monday, 16 January 2012

Impact of tuition fees on part time construction degree courses

Most of the furore over the new higher education tuition fees has considered the issue from the perspective of full time students, but construction degree courses are widely offered on a part time, day-release basis. How will the new fees affect these courses?

The new system
There has been understandable concern over the new tuition fees for university courses which will come into effect in September 2012. Students enrolling on degree courses will be liable to pay annual tuition fees of up to £9000 per year. The mechanism which is to be used to recover the fees is the student loan system, so students will not have to pay fees up front but will effectively receive a loan to cover the fees. The Student Loans Company (a government-owned organisation) pays the tuition fees directly to the University on behalf of the student. After graduation, students only start making repayments once they are earning £21,000 or more. At that point, they are required to pay 9% annually of everything they earn over £21,000. Thus, a student earning a salary of £25,000 will pay 9% of £4,000 (£360), which equates to £30 per month.

That might sound reassuring, in the sense that new graduates (particularly those earning relatively small salaries) are not burdened with excessive repayments in the early years of their careers. Nevertheless, the fact remains that most graduates will effectively have debts of around £27,000 just for tuition fees, and may have racked up further debts if they have borrowed money to cover accommodation, food travel etc. (so-called maintenance loans). Consequently, there have been many scare stories about young people being saddled with £40,000 of debt at the age of 21. However, the student loan is actually very different from a normal debt. As the money-saving expert, Martin Lewis, points out, it isn’t strictly a loan at all but a “hybrid form of finance ..... half way between traditional borrowing and taxation”. The key differences are as follows:
  •          Repayments are made automatically through the tax system
  •          Repayments are made only when earnings go above the threshold (£21,000)
  •          If earnings drop below the threshold, repayments stop, so if someone loses their job they do not have to continue paying.
  •          Repayments continue for a maximum of 30 years only, after which any remaining debt is wiped.

When the new tuition fees were first proposed, my understanding was that a key principle of the system would be that everyone going to university would have to take out a student loan. That way there would be no advantage for people from wealthy families who are able to pay their fees up-front and thus avoid the burden of debt after graduation. There was certainly some debate about this, but it seems that system introduced does allow up-front payment, and indeed many universities offer a discount for payment in this way. I personally don’t agree with that in principle, but that’s beside the point. What I am currently somewhat confused about is the question of part time students who are sponsored by their employers.

Part time students
At the University of Westminster just over 50% of the 600 students on the various courses in the Construction Studies Undergraduate Programme are part time students. These students attend University on one full day per week, and complete their degree courses over a five year period. A significant number of these students are sponsored by their employers, i.e. employers pay the students’ fees and allow them a day off work each week to attend university. There has been a long tradition in the construction industry of ‘day-release’ education whereby new entrants to the industry combine their studies with paid employment. Although it is demanding, it is a fantastic way to learn, because students are gaining valuable workplace experience alongside their studies and can thus contextualise much of what they learn in the classroom. At Westminster we have served the part time market for decades, and up until the recent downturn in the industry we actually had significantly more part time students than full time students on our construction courses.

So what is the likely impact of the new tuition fees on part time student numbers? Well, the answer at the moment is that no one really knows. Part time students will pay fees on a pro-rata basis to the same level as full time students. This means that our part time students will be paying between £4000 and £6000 a year (depending on the number of modules they are studying), as compared with £8000 for full time students. One key difference for part time students under the new system is that, for the first time, they will be able to apply for a loan in the same way as full time students. Potentially, this is could be positive move for prospective part time students who don’t have employer sponsorship. But how are employers going to view the new fee system? If employers are considering taking on trainees with a view to sponsoring them through university courses, how will the new fees affect those decisions? Some important questions spring to mind:
  •         Are employers actually aware of the implications of the new fees?
  •          Will they still be willing to pay tuition fees up front at the new levels?
  •          Will student employees be expected to apply for loans and pay their own fees?
  •          What is the government’s position in respect of employer-sponsored part time students?

I think it will be important for us as a University to engage with employers to find out what they are thinking. Of course the current economic climate means that construction employers are less likely to be taking on new recruits, so this will make it even more difficult to establish a clear picture.

Some people believe that in the next few years the distinction between full time and part time students will become increasingly blurred. Most students will need to be in employment alongside their studies just to survive, so the concept of a full time course or a part time course might simply disappear. Students may simply complete modules at a pace which suits their circumstances, and accumulate credits towards their degree over different periods of time. Universities will have to be proactive in making their courses available through more flexible modes of delivery.

Personally, I think the part time, ‘day release’ tradition in the construction industry has much to commend it, and it would be great shame if it were to disappear. However, I can’t help thinking that the combination of low levels of activity in the industry and much higher tuition fee levels will have a significant impact.

I would be really interested to hear other people’s views on this issue, particularly from construction industry employers, current or prospective students, or university staff. Leave a comment below, or email me directly on a.burke@westminster.ac.uk

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