Written statement on Higher Education Update

Joseph Johnson (The Minister of State for Universities, Science, Research and Innovation ): The Higher Education and Research Act 2017 (HERA) achieved Royal Assent on 27 April 2017. It set out a number of significant reforms that will improve the value for money that students receive from their investment in higher education. These include the establishment of a new regulator, the Office for Students (OfS), with a remit to drive value for money, a rigorous framework for assessing teaching and student outcomes, and provisions that make it easier for students to switch provider.

The Act also includes a power for the Government to set higher annual fee amounts for courses completed on an accelerated basis, which can be matched by higher corresponding student loan amounts. This measure will provide valuable new options to prospective students.

The way in which degrees are currently taught and studied has stayed largely unchanged for many years. The vast majority of providers offer a traditional three years of study regardless of subject, spread out across thirty weeks a year and with a long summer vacation every year. It is wrong that this is the only choice that most students have. The growing dominance of the classic three-year residential degree reflects more the convenience of the sector and financial incentives on providers than the needs of students for flexible ways of pursuing higher education. And it may be deterring some from higher education, and slowing the return of others to productive work.

Students on accelerated degree courses can secure a degree qualification in their preferred subject, studying the same content for the same number of weeks over the life of the course as the standard equivalent degree, subject to the same quality assurances. But by studying for more weeks each year, they are able to graduate within only two years, and with significantly lower student debt – good news for the student and for the taxpayer.

I believe there is significant untapped potential for accelerated courses, starting first with degrees, in higher education. They offer benefits to students of lower costs, more intensive study, and a quicker commencement or return to the workplace. Innovative providers would like to offer more of these courses but face significant financial and operational disincentives in the current system.

But for these accelerated courses to become more mainstream, we need to be upfront about why more universities are not already offering them. Many universities are concerned about changing existing models and the costs associated with doing that. This includes extra teaching hours, capacity to research, or not being able to rent out rooms over the holidays. A three-year course condensed into two is more expensive to run.

That is why I am proposing a balanced package that ensures universities are able to cover these additional costs but must charge at least 20% less in tuition for an accelerated two year degree than they can for its three year equivalent.

The launch of the OfS and the new fee arrangements will help incentivise greater provision. This in turn will give students a genuine choice of accelerated degrees across the full range of undergraduate courses.

In the debate in Parliament on the passage of the Bill, we committed to consult on the detail of our proposals. The consultation that I am launching today fulfils that commitment so far as accelerated degrees are concerned.

The proposals on which we are consulting are:

• Arrangements enabling greater provision and take-up of accelerated degree courses will be in place in Academic Year 2019/20, subject to Parliament passing secondary legislation which sets fees and loans specific to accelerated degrees.

• Accelerated degree courses subject to the new fee arrangements will be undergraduate first degree qualifications recognisably provided within a more intense period of study than other equivalent courses.

• The OfS will support and encourage more providers to offer accelerated degree courses, over a more diverse range of subjects than are currently offered.

• The OfS will also act as regulatory gatekeeper, determining whether degree courses meet the statutory definition of ‘accelerated courses’.

• The current means-tested living cost support package (the “long course loan”) available to students whose courses last for longer than 30 weeks and three days each academic year will continue to provide maintenance for students on accelerated degrees on the same terms.

• The annual tuition fee and loan upper limit for accelerated degree students at Approved (fee cap) providers would be set at 20% higher than the standard level. For example, based on current fee limits, the annual accelerated limit for a TEF-rated provider would be £11,100 (vs £9,250 for the three-year equivalent). This would give students who opt for accelerated degrees a £5,500 or 20% saving in the total cost of tuition fees

• The annual tuition fee loan limit for students at Approved providers (i.e. those outside the fee cap system) would be also be set at the standard level plus 20%. For example, based on current loan limits, students at TEF-rated Approved providers would have an annual tuition fee loan limit of £7,398 (vs £6,165 for the three-year equivalent).

• Existing quality assurance arrangements for accelerated degrees should continue to apply, including after the OfS becomes responsible for monitoring them on 1 April 2018..

This balanced package offers students significant savings on the costs of graduating, while also addressing the additional in-year costs providers incur by condensing the final standard third year of teaching into the first two years of the accelerated degree course. The 20% uplift in annual fee revenue should cover the extra costs associated with accelerated provision for most courses in most providers.

Accelerated degrees are referenced in the Industrial Strategy published last month, which notes their potential to widen choice for students. And they have enjoyed cross-party support since Shirley Williams championed them in the 1960s. In the passage of the Higher Education and Research Bill this year, MPs and peers from all sides called for government to support them. The proposals I am announcing today will remove the barriers to accelerated degrees, and make them a real choice for many more future students.