Paul Clark, Universities UK:  Innovative Ways of Achieving the Increase We Need in Highly-Skilled Graduates to Lead Us Out of Recession Are Welcome. (October 13, 2009)

Paul Clark is director of policy for Universities UK, the representative body for the vice-chancellors of UK universities. At present it numbers 133 members, i.e. the executive heads of all the UK university institutions and some colleges of higher education.

Writing in today's Guardian Mr Clark uses as his theme the commitment by Britain's conservatives at their party conference last week of a one-off policy to fund 10,000 additional student places next year, the money to "be raised by offering discounts to graduates who repay their loans early".

Mr Clark's opinion piece is in fact an amplification of a statement put out by the president of Universities UK, Professor Steve Smith, vice-chancellor of the University of Exeter, and he makes the initial point: "Public finances are in their worst state for a generation, so innovative ways of achieving the increase we need in highly-skilled graduates to lead us out of recession are welcome. But these must come without threatening the core quality or values of the UK's university system."

He goes on to argue that "long-term policies [must]not disadvantage students from less privileged backgrounds. A discount on loan repayments might look like regressive taxation. But a university education provides an average earnings premium for all students of 20-30% – a figure that has held steady throughout the expansion of higher education. So students from all socio-economic groups could theoretically pay back their loans early once they graduated, provided they were earning above the threshold".

Nevertheless, Universities UK is worried -- "Analysis by the Higher Education Policy Institute shows that for every pound loaned to students for tuition fees or maintenance, only 67 pence will find its way back to the Treasury. The system is massively subsidised – a real problem in the present climate", which seems to neglect the point that the university education is an investment in significantly upping the nation's future GDP.

UUK's policy director suggests that perhaps "modifying the loan repayment system [might be considered]. For example, the term of the loan could be extended, the thresholds at which repayments kick in could be changed, or the current blanket interest rate subsidy could be targeted more effectively, to name but a few possibilities". Which are weasel words for increasing the cost of the loan. Furthermore, "if resources are scarce, then maintenance support may need to be rationed and targeted more effectively – to those for whom the money would mean the critical difference between starting and completing their course, and those who could complete their degree without additional state funding".

It would appear that the recently expressed views of Oxford's newly installed vice-chancellor, Andrew Hamilton, don't fully jibe with those of UUK's policy spokesman.

So just what are the UUK's proposed modi operandi when Mr Clark concludes: "In every conceivable future scenario we will need more skilled graduates in the UK, a strong research base, and a vibrant and high-quality university system to deliver them, both in the short and long term."