David Willetts' speech to HEFCE Conference

21 October 2010

Commenting on David Willetts’ speech at the Hefce conference this afternoon, Dr Wendy Piatt, Director General of 20 major research-intensive universities said:

“The Chancellor’s announcement yesterday about cuts to the higher education budget means that if the UK’s world-class universities are to perform their vital role as the engine room of economic recovery we must have access to higher graduate contributions as recommended by Browne.

“By removing the fee cap in England, the expert team led by Lord Browne has rightly recognised that a substantial increase in graduate contributions is the only viable and the fairest way to secure this vital investment. Increasing and varying the contribution made by graduates is the fairest option because it reflects the link between what a student gains from a university education and what they give back.

“Rowing back from Browne and re-imposing a cap would be a real waste of an opportunity to allow our leading universities to provide the high quality education that their students deserve.
However, while we acknowledge the need for some contribution to the costs of higher loans, we are concerned about the large size of the levies proposed by Browne.

A fair and low-risk repayment system for all

“It is really important to understand that student loans are a world away from conventional ‘debt’. Under Browne’s system, there is no upfront payment for any student, and graduates are only asked to start making repayments when their earnings reach £21,000. Even then they would only contribute a fixed proportion of their income so their payments should never become unmanageable. We are pleased that students from poor backgrounds and low-earners are particularly well-protected in Browne’s student support system: for example if, for whatever reason, the graduate is unable to pay off the loan within 30 years it is written off. In short, the repayment system provides students with the most generous loan they are ever likely to be offered.”

In addition Dr Piatt stressed that Russell Group universities would redouble their efforts to ensure that everyone with the talent and commitment – no matter what their background – can study at a leading university.

“We are committed to fair access and our universities already plough millions of pounds into bursaries and outreach work with schools,” she said. But she emphasised the overwhelming evidence showing that fees have not deterred young people from applying to university: “It’s absolutely essential to recognise that participation in higher education from all socio-economic groups has actually increased since fees were introduced in 2006, and applications have rocketed.  Whilst it seems counter-intuitive, the hard evidence shows that financial considerations are not the most important factor in determining whether a student will go on to attend a leading university.

“We welcome the Minister’s stated aim to at least delay the impact of the cuts. Otherwise if cuts are made sooner we could be facing an alarming funding gap until we are able to receive the new income from the Browne reforms.”