UK students face rising debts, poor wages and further marketisation of higher education

By Thomas Scripps

7 November 2018

MPs on the Commons education committee have released a report titled “Value for Money in Higher Education.” They draw attention to figures from the Office for National Statistics (ONS) that indicated 49 percent of recent graduates (within five years of achieving their degree) were in non-graduate roles in 2017.

This is a significant increase over the proportion at the start of 2009, just after the 2008 financial crash, when 41 percent of recent graduates were in that position. It is matched by a very similar rise even among the population of graduates taken as a whole—including mature students—from 31 percent to 37 percent in the same years.

The report stated: “Higher education institutions must be more transparent about the labour market returns of their courses.” It came with the warning that “too many universities are not providing value for money, and ... students are not getting good outcomes from the degrees for which so many of them rack up debt.”

These comments reflect serious concerns about the toxic political legacy of tuition fees. But what they obscure are the deeper, more serious issues underlying the grim situation facing British students which is rooted in class exploitation.

Graduate earnings have fallen considerably in real terms following the recession. The average wage for a recent graduate in 2010 was £24,000; for graduates as a whole it was £32,000. By 2017, the totals had “risen” to £25,000 and £33,000 respectively. Given the average inflation rate of around 2.86 percent over the intervening years, these represent real terms losses of four to five thousand pounds. Student debt, meanwhile, has risen to absurd levels, with the average graduate now owing over £50,000 upon graduating, rising to £57,000 for those from poorer backgrounds.

The fall in real wages has taken place in the context of a supposed recovery in employment figures: unemployment rates for recent and older graduates dropped to 5 percent and 2 percent respectively last year, from 9 percent and 4 percent at a 2011 peak. The recovery, in other words, has in fact been a restructuring, based on effective pay cuts and increasingly enforced by pushing graduates into lower-skilled employment.

Even these statistics present too rosy a picture. Average figures for graduate earnings obscure significant variations. High-end salaries are captured by a very narrow layer of privileged students, often privately educated and taking up the majority of the places at the most prestigious universities. Graduates from the wealthiest fifth of families earn 30 percent more on average than the rest of the graduate population.

For large numbers of poorer students the only thing gained financially by taking a degree is an insurmountable debt. Among graduates of non-Russell group universities (the “top” 24 institutions), the average salary after five years is just under £24,000. One study showed that, of all students who graduated in 2004, one quarter of those in work were earning less than £20,000 a year a decade later.

The declining position of many graduate workers is the result of two main processes.

Firstly, the raising of qualifications thresholds as the number of university entrants has grown. In the decades since the 1980s, the number of jobs requiring a degree has increased substantially, to include, for example, school teachers, nurses, a range of office-based workers and even many part-time positions. So while the quality of many jobs working- and lower-middle-class youth might expect to enter has not improved, the level of qualification required to enter them has greatly increased.

Secondly, and most importantly, the graduate figures are an expression of the declining wages and conditions of the working class. According to the Resolution Foundation, UK millennials have suffered the second worst collapse in pay in the developed world, at 13 percent. Only Greece, savaged by EU-dictated austerity, has worse figures.

The number of zero hours contracts in the UK has ballooned, as have the numbers of self-employed, 80 percent of whom were in poverty in 2012-13. In total, according to an estimate from the GMB union, nearly 10 million UK workers—almost a third of the workforce—are in insecure work of this kind. These positions are disproportionately staffed by young, recent entrants into the labour force.

With poorer university graduates experiencing their own decline in living standards, the 59 percent of those aged 21-64 without a degree are left in an even worse position. On average, they earn five to ten thousand pounds less a year than a graduate, they are more likely to be unemployed and much more likely to be economically inactive—having to stay at home to look after family, for example.

These individuals come overwhelmingly from working-class backgrounds. Just 24 percent of pupils receiving free school meals—an indication of deprivation—go on to university. In 2017, according to the Universities and Colleges Admissions Service (UCAS), while the most advantaged fifth of the population by area have a university participation rate of 47.1 percent at 18 years old, the rate for the whole remaining four-fifths is just 29.4 percent.

The real problem behind graduate prospects, therefore, is not the “value for money” offered by degrees (though many institutions are doubtless ripping off their students), but the decaying state of British capitalism.

MPs are discussing the issue in terms of “return on investment” both to divert from this reality and to point the way towards a further marketisation of higher education.

There are suggestions that the ongoing review into higher education, due to report early next year, is considering a variable fee system. Tuition fees for some courses would be cut—apparently down to £6,500—while others, mainly in the sciences, would rise to £13,500. A spur was given to such moves when the Universities and Colleges Union organised the defeat of a massive strike of university staff earlier this year that had raised opposition to further marketisation as central to the defence of their conditions.

Depriving less financially rewarding subjects of funds would be a significant attack on arts and culture and would greatly entrench what is already a two-tier university system. Low-reward subjects and universities will be priced more cheaply (though still at eye-watering rates) and signed up to by those desperate to reduce the burden of future debt. High-reward subjects and universities, the latter already the preserve of the rich, will be placed further beyond the reach of the vast majority of the population.

Nothing remains of the claims of the Blair New Labour government that widening higher education participation would usher in a new era of social mobility and rising fortunes. Students have been laden with debt for degrees, which do less and less to boost their employment and earnings. Young workers outside of the universities have endured a catastrophic collapse in their life chances. Both face the consequences of worsening social inequality and the transformation of the education system into an ever more naked instrument for securing privileged lives for the rich.

The fight for good quality higher education, accessible to all and guaranteeing a decent standard of living, is the fight of the whole working class and depends on its carrying out a socialist struggle against capitalism.

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