Thanks for a thoughtful piece. I’m not sure I agree with all of it, not least because people attend university for more than just a chance to enhance their incomes (cultural enrichment and pursuing research interests are good examples). However, I fully agree the Plan 2 interest rates are a scandal and they should be reset to inflation.
I do have one question though - can you really get into university in the UK if you’ve “failed your A levels” as you write? I thought there are minimum requirements of at least two passes at A levels?
Thank you - and I think one can disagree on the uni expansion point while still agreeing on Plan 2 interest rates!
Re your question, yes, minimum entry requirements were removed some time ago and you can now be admitted at 18, and get loan funding, with no qualifications at all, or with purely vocational qualifications. I would also say though that university should not generally be for those with just two Es or similar (of course, there should be second chances, ability to retake, the OU, for those who actually had potential but underperformed - but not just here's the loan, come on in).
Thanks. I suppose it is up to individual universities to determine their admissions criteria, and flexibility is warranted for those with no qualifications but strong professional experience for example, but allowing school leavers who have just failed their A levels access to student loans does seem a bit mad to me unless there are very compelling extenuating circumstances.
You can certainly go to university with vocational qualifications. Triple Distinction in a Level 3 Diploma is the same points as 3 x A grades at A-Level and plenty of universities make points offers. However, if you "fail your A-Levels" you have 0 points and (apart from the Open University, which has never had entry qualifications for most of it's courses) that's not the same thing.
The requirement to have passed two A-Levels to access state funding was abolished in 1980. You can have failed your A-Levels, have 0 tariff points, and still be admitted to university and access loan funding.
However, the paragraph we're discussing is just as valid if you replace 'failed their A-Levels' with 'got a D and an E at A-Level' or 'got a Level 2 BTEC'. It's no kindness to push young people without strong academic qualifications to university and load them up with debt.
How many people each year, sit A-Levels, get all U's, and then go to university (with SFE support)?
I'm not arguing against your thesis. I'm just saying that "failing your A-Levels" and going to university anyway isn't afaik a thing. Happy to be corrected on this, though.
If you'd said "got a D and an E" then I wouldn't be quibbling (<DDD is about 5% of entrants) but Jon was asking specifically about school leavers who had failed their A-Levels.
I'm going to query BTEC Level 2 as well. Are you saying people without Level 3 qualifications are going to university?
Yes to all of these not many go with no UCAS points or Level 2s, but some do. I agree with you about <DDD being about 5%; latest data I can find on less than EEE is about 6000.
I'd also very much query BTECs as an admission qualification. Maybe 'student who can't do A-Levels' would have been a fairer way of putting it than 'student who'd failed their A-Levels' (as some BTECs are valid as useful progressions to employment. But if you look at the stats for how they perform at uni, or earnings five years afterwards, they are very poor indeed.
Make the university liable for student debt not repaid because the Mickey Mouse degree they supplied did not enable its holder to increase their earnings sufficiently.
Or just close down the useless ones. There will probably be some agreement on which the 50% worst performing institutions are.
The second graph doesn't seem to match the text around it. You appear to have a graph for someone with a debt that always accrues slower as their income rises, when your text describes someone with such a high debt that their debt goes faster for a period.
Ah, that is meant to be the graph for a graduate with a typical loan of £55,000. I've added a caption to make this clear and also moved the confusing paragraph to below the graph, instead of above it.
Very good article. Worth adding that RPI is generally higher than CPI, and with compounding this can make a big difference over time. Based on what I just got from AI, from 2000 to 2024, CPI rose by 84%, RPI rose by 126%. Governments seem to use CPI when it's their turn to pay out, but use RPI when they are owed money.
This is an excellent piece. I find it quite telling that this problem is particularly bad for graduates who have "done well for themselves" in that higher income bracket of 50,000 as you say, but took the maximum maintenance loan because of a low-income childhood. For all the talk successive governments have given about improving social mobility, it certainly does look like a penalty for escaping the generational poverty cycle.
I’m the first person in my family to go to university. Went to KCL in London, which meant even more debt as you get a higher maintenance loan under the pretence it covered rent (it didn’t), and then I had the audacity to get an MSc. I now pay £600 a month in repayments and have a debt balance of over £70k.
I earn good money and have had an amazing career, but my colleagues are living a totally different life to me - £600 a month is over £7k a year. Enough to save, maybe, for a house deposit. Instead, I’m trapped in extortionate rent prices and burdened with a debt I’m not sure I’ll ever pay off.
Given the chance to do it again, I’m not sure I would go…
I’m the first person in my family to go to university. Went to KCL in London, which meant even more debt as you get a higher maintenance loan under the pretence it covered rent (it didn’t), and then I had the audacity to get an MSc. I now pay £600 a month in repayments and have a debt balance of over £70k.
I earn good money and have had an amazing career, but my colleagues are living a totally different life to me - £600 a month is over £7k a year. Enough to save, maybe, for a house deposit. Instead, I’m trapped in extortionate rent prices and burdened with a debt I’m not sure I’ll ever pay off.
My marginal tax rate is over 64% - essentially trapping me in renting forever, even when I earn more money it’s rarely enough to make a difference.
Given the chance to do it again, I’m not sure I would go…
When discussing the various political parties is rather strange that you single out the Lib Dems for "collaborating in bringing in the vile system in the first place", but Labour and the Conservatives are never referenced in this light.
I think this attitude helps explain the 2015 election result; the government many despised persisted because the Conservatives weren't held responsible for their actions, as they were seen as merely behaving in accordance with their nature. The Lib Dems were blamed for everything the government did, with most of the 21 Lib Dem MPs who voted against raising tuition fees losing their seats at the 2015 GE.
I've just seen another version of that graph showing declining graduate premium with increased graduate share of population. The UK looks to be a striking outlier. It's here https://tomforth.co.uk/graduatepremium/
This makes it look like the problem is the UK economy, and not the proportion of graduates. Doesn't change the calculation for any individual leaving school now, if our economy stays on it's current path. But if in the near future we were to shift to an economy like some of these other countries, that calculation would change a lot.
This is the John Burn-Murdoch graph? Yes, that was fascinating! Have been engaging with him on BlueSky about this today.
It still means we are training too many graduates for our economy and that the people who thought we could boost growth my expanding HE were wrong - it wasn't the limiting factor (and almost certainly had an opportunity cost). But as you say, it does suggest that this isn't an intrinsic limit, and if we had a better economy we might need more.
The real issue is the people who go to uni for fun and don’t increase their earnings power enough to pay it back, raising the burden on the people earning 50k+ who have to repay forever, as you talk about in the article.
I don’t judge those people because who wouldn’t take free money from the government to go live with their friends and barely work for 3 years? The incentives are what they are.
But we need a bit of tough love here and stop treating all degrees as equally valuable, and support those that give back to society. I’m not against shifting the burden onto the taxpayer for degrees that serve the common good (medicine, obvious example). Stop so many smart people going into finance to get ahead of their loan out the gate.
Absolutely!
Thanks for a thoughtful piece. I’m not sure I agree with all of it, not least because people attend university for more than just a chance to enhance their incomes (cultural enrichment and pursuing research interests are good examples). However, I fully agree the Plan 2 interest rates are a scandal and they should be reset to inflation.
I do have one question though - can you really get into university in the UK if you’ve “failed your A levels” as you write? I thought there are minimum requirements of at least two passes at A levels?
Thank you - and I think one can disagree on the uni expansion point while still agreeing on Plan 2 interest rates!
Re your question, yes, minimum entry requirements were removed some time ago and you can now be admitted at 18, and get loan funding, with no qualifications at all, or with purely vocational qualifications. I would also say though that university should not generally be for those with just two Es or similar (of course, there should be second chances, ability to retake, the OU, for those who actually had potential but underperformed - but not just here's the loan, come on in).
Thanks. I suppose it is up to individual universities to determine their admissions criteria, and flexibility is warranted for those with no qualifications but strong professional experience for example, but allowing school leavers who have just failed their A levels access to student loans does seem a bit mad to me unless there are very compelling extenuating circumstances.
You can certainly go to university with vocational qualifications. Triple Distinction in a Level 3 Diploma is the same points as 3 x A grades at A-Level and plenty of universities make points offers. However, if you "fail your A-Levels" you have 0 points and (apart from the Open University, which has never had entry qualifications for most of it's courses) that's not the same thing.
The requirement to have passed two A-Levels to access state funding was abolished in 1980. You can have failed your A-Levels, have 0 tariff points, and still be admitted to university and access loan funding.
However, the paragraph we're discussing is just as valid if you replace 'failed their A-Levels' with 'got a D and an E at A-Level' or 'got a Level 2 BTEC'. It's no kindness to push young people without strong academic qualifications to university and load them up with debt.
How many people each year, sit A-Levels, get all U's, and then go to university (with SFE support)?
I'm not arguing against your thesis. I'm just saying that "failing your A-Levels" and going to university anyway isn't afaik a thing. Happy to be corrected on this, though.
If you'd said "got a D and an E" then I wouldn't be quibbling (<DDD is about 5% of entrants) but Jon was asking specifically about school leavers who had failed their A-Levels.
I'm going to query BTEC Level 2 as well. Are you saying people without Level 3 qualifications are going to university?
Yes to all of these not many go with no UCAS points or Level 2s, but some do. I agree with you about <DDD being about 5%; latest data I can find on less than EEE is about 6000.
I'd also very much query BTECs as an admission qualification. Maybe 'student who can't do A-Levels' would have been a fairer way of putting it than 'student who'd failed their A-Levels' (as some BTECs are valid as useful progressions to employment. But if you look at the stats for how they perform at uni, or earnings five years afterwards, they are very poor indeed.
https://www.officeforstudents.org.uk/data-and-analysis/student-characteristics-data/entry-qualification-and-subject-data-dashboard/
https://explore-education-statistics.service.gov.uk/find-statistics/leo-graduate-and-postgraduate-outcomes/2022-23#dataBlock-9d5ba308-f588-4d3e-b80d-7698e16d39b0-tables
But yes, I accept 'failed their A-Levels' was an oversimplified short-hand.
Here's an idea.
Make the university liable for student debt not repaid because the Mickey Mouse degree they supplied did not enable its holder to increase their earnings sufficiently.
Or just close down the useless ones. There will probably be some agreement on which the 50% worst performing institutions are.
The second graph doesn't seem to match the text around it. You appear to have a graph for someone with a debt that always accrues slower as their income rises, when your text describes someone with such a high debt that their debt goes faster for a period.
Ah, that is meant to be the graph for a graduate with a typical loan of £55,000. I've added a caption to make this clear and also moved the confusing paragraph to below the graph, instead of above it.
Very good article. Worth adding that RPI is generally higher than CPI, and with compounding this can make a big difference over time. Based on what I just got from AI, from 2000 to 2024, CPI rose by 84%, RPI rose by 126%. Governments seem to use CPI when it's their turn to pay out, but use RPI when they are owed money.
So true!
The Plan 2 system seems to have been made on the assumption that interest rates would never again raise above 1% and is utterly abhorrent.
Unilateral changes to it are necessary, as is preventing the freezing of repayment thresholds while creating massive increases in the minimum wage.
This is an excellent piece. I find it quite telling that this problem is particularly bad for graduates who have "done well for themselves" in that higher income bracket of 50,000 as you say, but took the maximum maintenance loan because of a low-income childhood. For all the talk successive governments have given about improving social mobility, it certainly does look like a penalty for escaping the generational poverty cycle.
I’m the first person in my family to go to university. Went to KCL in London, which meant even more debt as you get a higher maintenance loan under the pretence it covered rent (it didn’t), and then I had the audacity to get an MSc. I now pay £600 a month in repayments and have a debt balance of over £70k.
I earn good money and have had an amazing career, but my colleagues are living a totally different life to me - £600 a month is over £7k a year. Enough to save, maybe, for a house deposit. Instead, I’m trapped in extortionate rent prices and burdened with a debt I’m not sure I’ll ever pay off.
Given the chance to do it again, I’m not sure I would go…
I’m the first person in my family to go to university. Went to KCL in London, which meant even more debt as you get a higher maintenance loan under the pretence it covered rent (it didn’t), and then I had the audacity to get an MSc. I now pay £600 a month in repayments and have a debt balance of over £70k.
I earn good money and have had an amazing career, but my colleagues are living a totally different life to me - £600 a month is over £7k a year. Enough to save, maybe, for a house deposit. Instead, I’m trapped in extortionate rent prices and burdened with a debt I’m not sure I’ll ever pay off.
My marginal tax rate is over 64% - essentially trapping me in renting forever, even when I earn more money it’s rarely enough to make a difference.
Given the chance to do it again, I’m not sure I would go…
When discussing the various political parties is rather strange that you single out the Lib Dems for "collaborating in bringing in the vile system in the first place", but Labour and the Conservatives are never referenced in this light.
I think this attitude helps explain the 2015 election result; the government many despised persisted because the Conservatives weren't held responsible for their actions, as they were seen as merely behaving in accordance with their nature. The Lib Dems were blamed for everything the government did, with most of the 21 Lib Dem MPs who voted against raising tuition fees losing their seats at the 2015 GE.
I've just seen another version of that graph showing declining graduate premium with increased graduate share of population. The UK looks to be a striking outlier. It's here https://tomforth.co.uk/graduatepremium/
This makes it look like the problem is the UK economy, and not the proportion of graduates. Doesn't change the calculation for any individual leaving school now, if our economy stays on it's current path. But if in the near future we were to shift to an economy like some of these other countries, that calculation would change a lot.
This is the John Burn-Murdoch graph? Yes, that was fascinating! Have been engaging with him on BlueSky about this today.
It still means we are training too many graduates for our economy and that the people who thought we could boost growth my expanding HE were wrong - it wasn't the limiting factor (and almost certainly had an opportunity cost). But as you say, it does suggest that this isn't an intrinsic limit, and if we had a better economy we might need more.
The real issue is the people who go to uni for fun and don’t increase their earnings power enough to pay it back, raising the burden on the people earning 50k+ who have to repay forever, as you talk about in the article.
I don’t judge those people because who wouldn’t take free money from the government to go live with their friends and barely work for 3 years? The incentives are what they are.
But we need a bit of tough love here and stop treating all degrees as equally valuable, and support those that give back to society. I’m not against shifting the burden onto the taxpayer for degrees that serve the common good (medicine, obvious example). Stop so many smart people going into finance to get ahead of their loan out the gate.