Press Story

New analysis modelling six different options for introducing postgraduate student loans, is published today (Thurs) by the think tank IPPR.

The new report is available on request from the IPPR press office.

The new analysis, carried out for IPPR by London Economics, leads us to conclude that a postgraduate loans system, modelled on the existing undergraduate loans system but with repayments at 9% over £15,000 of earnings, would be workable and affordable. Because such loans would be paid back before a graduate started to pay back their undergraduate loans, the level of unpaid loans (the so-called RAB charge) is very low, at just 7 per cent, much less than the 40-45 per cent estimated RAB for undergraduate loans. The cost to the exchequer under our baseline model is around £103 million a year in teaching grants and £44 million in unpaid loans. This is eminently affordable, especially when compared with the subsidy provided for undergraduate loans which is £4.2 billion, although it should be noted that the cash advanced for students adds to the national debt stock, as it does for undergraduate loans.

Rick Muir, IPPR Associate Director, said:

"Given the increasing importance of postgraduate study to social mobility, there is a powerful case in principle for ensuring that access is not inhibited by ability to pay. There is a real danger that improvements in access at undergraduate level will be undermined by a 'glass ceiling' at postgraduate level, as students with money are able to take masters courses that differentiate them in the labour market while those from less well-off backgrounds cannot. Our research shows that in the long run the cost to government from such a move should be low. We therefore recommend that the government move quickly to introduce such a system for taught postgraduate courses."

Notes to Editors

The new report is available on request from the IPPR press office.

London Economics' analysis is based on information from a range of official sources: Higher Education Statistics Agency (HESA), ONS Labour Force Survey (LFS), Student Loans Company (SLC), the Office for Fair Access (Offa), the Higher Education Funding Council of England (HEFCE), Department for Business, Innovation and Skills (BIS), as well as a range of statistical first releases from the Office for National Statistics.

Contacts

Sofie Jenkinson, 07981 023 031, s.jenkinson@ippr.org

Richard Darlington, 07525 481 602, r.darlington@ippr.org