Loan campaign
EDUCATION STUART MACLURE
With the National Union of Students in session at Leicester University this weekend, the air will be rent with wild and provocative talk of student power, and the students' right to t living wage. Students are news, particularly to newspapers with an eye to long-term circula- tion building. And they include among their number enough with a genius for bad publicity to ensure that they feed their critics with am- munition for the war between the generations.
But even if they are so often their own worst enemies, it needs to be said that in the matter of grants they have received a thoroughly raw deal from the Government and that they have reacted to this, for the most part, in a moderate, reasonable and intelligent fashion. If this week- end Geoff Martin, the president of the NUS. and his colleagues who lead the union are censured for their moderation, this may well be because the representatives who get sent to union conferences tend to be hotheads, not because the rank and file really believe that more militant action would have got better results.
The significance of what the Cabinet decided to do about student grants in January has not yet been fully recognised. Till now the principle behind student maintenance grants has been that they should enable students to go on to higher education without hardship, irrespective of parental income. The level grant was due to be revised this year to take account of changes in costs since it was fixed in 1965. By saying in advance that students will get onl' half the increase which the figures would justify, the Government has jettisoned the underlying principle. From October onwards, even the figure adopted as the maximum grant will be £30 or £40 below the recognised reasonable cost.
What has happened is what anyone might have anticipated. The annual cost of student support has risen to f124 million (including fees) and can be expected to double in constant prices by 1980. Leaving aside the ham-fisted way in which it has been done, the root cause of this proposed cut is not to be found in any immediate crisis but in the rapid growth of grants as an item in educational expenditure and the prospect that this growth will continue during the 'eighties to a point where it threatens to go through the roof.
In the long term it seems inconceivable that loans will not play a major part in financing students at the university—if only on grounds of elementary social justice. A university education so obviously brings direct personal advantages as well as an indirect national gain that this ought to be reflected in the financing of undergraduates more effectively than at present. But to make a loan scheme work there are two separate types of difficulty to over- come.
The first—and easiest—group of problems concerns certain categories of student and their repayment obligations. Prominent among these are the girls. How can you prevent the anti- dowry which every graduate bride would bring to the altar from acting as yet another dis- incentive to the higher education of women? There are also those who enter low-paid employment in, for example, the social services, and there are the graduates who join the brain drain with debts outstanding.
These administrative obstacles loom larger in the argument than they need do, because there tends to be an assumption that it is a question of financing the whole cost by loans or the whole cost by grants. In fact, all that is at issue is the balance between the several different sources of money—loans, grants, parental contributions, income from employ- ment (as for example, by an expansion of sandwich courses), scholarships, subsidised services. Provided too much weight is not put on the loan element, a loan scheme is quite feasible and, in fact, loan schemes operate in one form or another in most developed countries including Sweden, Norway, Denmark and West Germany. As for the brain-drain emigrants it is not clear why the repayment of a loan for university education should be regarded as an unreasonable obligation; emigrants do not expect to avoid paying arrears of income tax or other debts simply by leaving the country. In the case of graduates in the social services, the ability to waive loan re- payments as part of any scheme to recruit and retain good people would be an added weapon in the state's armoury.
It would be logical, however, to expect the salaries of young graduates to rise to take account of the repayment obligation. As the central government, local government and the nationalised boards consume well over half
the output of higher education, it would be prudent to expect some of any saving gained by a loan scheme to be offset by higher starting salaries for teachers and others.
Personally, I dislike the idea of linking the repayment to income on the lines advocated
by Professor A. R. Prest in his evidence to the Robbins Committee—so that instead of repaying a known debt, a graduate would go soldiering on to the end of his working life, paying what amounts to an extra income tax. This seems to make the connection with the loan itself—of, say, f1,000—too remote, and instead of being a way of repaying a recognised debt, it becomes just a tax on graduates. But clearly the Prest scheme would deal equitably with well-paid and poorly paid graduates alike.
The second set of difficulties I regard as no less complex and require just as delicate hand- ling. A loan scheme, to my mind, would be against the public interest if it deterred working- class students from going to the university. It would, therefore, be important to keep a. sub- stantial grant element for students who can count on little parental support. The obvious way to introduce loans is as an option to replace what is now the parental contribution, and gradually over a period of time to vary the proportion of grant and loan with the object of slowing down the increase in the total expenditure on grants. It would go without saying that students supported by loans would expect to be treated as adults and as less dependent on their parents.
A loan scheme would also be against the public interest if it raised the unit costs of higher education by increasing the drop-out rate (now about 14 per cent) or lengthened the time students take to complete their courses. In any revision of the grants scheme this would have to be watched very closely. It would obviously be prudent to vary the elements in student support gradually over a period of time, rather than in one fell swoop. The time to start, however, is in the next two or three years before the number of students begins to climb rapidly in the 'seventies.
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