On Thursday, 29th November 2018, the Higher
Education Policy Institute (HEPI) publishes Fairer
Funding: The case for a graduate levy (Policy Note 10)
by Johnny Rich, which outlines a radical new approach to funding
higher education.
In order to balance the cost more fairly between students,
taxpayers and employers, the paper proposes that, instead of
students borrowing money to pay for tuition, businesses should
pay a levy for each graduate they employ. The amounts would be
equivalent to the student loan repayments made under the current
funding system in England.
Revenue from graduate levies would be paid directly to the higher
education institution where each graduate studied. Institutions
would be financially sustainable because they would share an
investment in the future employability of their students, rather
than because they maximise their student intake.
The paper comes in advance of the Augar Review’s report in the
new year on the future of Post-18 Education and Funding. It also
comes as the Office for National Statistics prepares to announce
possible changes to student loan accounting rules that could
create a black hole in the Government’s budget deficit
plans.
The paper has been written in a personal capacity by Johnny Rich,
a higher education specialist who is also Chief Executive of
Push, a not-for-profit outreach organisation, and the Engineering
Professors’ Council.
Rich also argues for a redistribution of funds between higher
education institutions based on their ability to attract and
support students from poorer backgrounds. This would give
institutions an incentive to support social mobility and ensure
access money is spent more effectively.
Johnny Rich said:
“For too long, higher education funding has been a battleground
of competing interests between taxpayers, students, employers and
universities. Over three decades, students have come off worst. A
graduate levy would mean that everyone shares the same interests:
students having opportunities to do high-quality courses,
becoming well qualified for good jobs, filling the nation’s
skills gaps.
“The proposal is designed to minimise student debt, but also to
ensure employers don’t pay more than they contribute now, unless
they get more. The same goes for taxpayers.”
, Director of HEPI, said:
“We are at a crucial moment for the funding of higher education
and this paper wrestles with the challenge of securing greater
support from employers.
“It is a challenge no one has been able to solve adequately since
the Dearing report called for higher education to be a shared
endeavour between government, students and employers over a
generation ago.
“We hope it will serve as a useful contribution to the debate on
an under-studied but crucially important area.”
