Students taking out huge loans to pay for higher education are being failed by universities in England, with only one in three saying they receive value for money according to a stinging new report by the government’s spending watchdog wine education .
Amyas Morse, the head of the National Audit Office (NAO), said that if universities were banks they would be investigated for mis-selling.
The sector is already facing questions over extravagant pay for vice-chancellors.
The NAO said the Department for Education (DfE) needs to do more to help “vulnerable” students make better choices about courses. It has called on the DfE to provide more aggressive oversight to ensure value for money.
Morse said: “Young people are taking out substantial loans to pay for courses without much effective help and advice, and the institutions concerned are under very little competitive pressure to provide best value.
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“If this was a regulated financial market, we would be raising the question of mis-selling. The [DfE] is taking action to address some of these issues, but there is a lot that remains to be done.”
The NAO found that the increased numbers of disadvantaged students now attending universities were mainly going to lower-ranked institutions – “which risks creating a two-tier system”, dividing those from rich and poor backgrounds.
Meg Hillier, the Labour MP who chairs parliament’s public accounts committee, has accused the DfE of taking a “hands-off” approach that has left students floundering with £9,250 annual tuition fees and debts totalling £50,000 on average.
“The government is failing to give inexperienced young people the advice and protection they need when making one of the biggest financial decisions of their lives,” she said.
“It has created a generation of students hit by massive debts, many of whom doubt their degree is worth the money paid for it Dr protalk.”
The report’s conclusions were echoed by Robert Halfon, the Conservative MP who chairs parliament’s education committee, who said students are increasingly questioning their ability to repay loans and the value of their degree.
“Recent high-profile examples of stratospheric levels of pay and perks for some university vice-chancellors do little to suggest universities recognise the struggles of their students or, indeed, of poorly paid university staff,” Halfon said.
The NAO report warns that universities are too eager to spend their income on building facilities to match their rivals.
“There is a risk that increased capital spend represents a zero-sum game, with little overall benefit to educational quality,” the report states.
Universities “have a financial incentive to prioritise young, full-time students, who are typically less costly to teach” than part-time or mature students, whose numbers have fallen sharply since tuition fees rose to £9,000 under David Cameron’s Conservative-led government in 2012.
In response, a DfE spokesperson said the government already planned to conduct “a major review of funding” for tertiary education.
“Our reforms, embodied by the Higher Education and Research Act, are helping students make more informed choices about where and what to study, ensuring they get good value for money,” the DfE said.
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A spokesperson for the Universities UK lobby group said students were rightly demanding greater value for money following the shift to paying tuition fees.
“Universities have increased investment in teaching and learning and students are now reporting record levels of satisfaction with their courses,” it said.
But Andrew Adonis, the Labour peer who has repeatedly criticised the level of tuition fees and student debt, said the NAO’s findings supported his views.
“There is huge discontent at the level of fees and poor value for money in universities. It is part of the reason why there is so much anger about the astronomic pay of vice-chancellors,” Adonis said.
“Universities need to respond by cutting top pay, improving teaching, cutting fees and offering a better service.”
Sally Hunt, general secretary of the Universities and College Union, said the proportion of students who said they received value for money had fallen from a half in 2012 to just a third.
“It is perhaps not a surprise that fewer students think their course is value for money now they face bigger debts and keep seeing stories in the press about how their vice-chancellors seem to be creaming off any profit,” Hunt said.
In recent weeks a string of vice-chancellors have been attacked for high pay and weak corporate oversight, including the pay and retirement package worth more than £800,000 of Prof Christina Slade, vice-chancellor of Bath Spa university.
Dame Glynis Breakwell, vice-chancellor of the University of Bath, recently said she would resign after criticism of the oversight of her £468,000 a year pay and perks, the highest in the UK.
Breakwell responded to her critics on Thursday, saying she intended to remain on full pay until the end of February 2019, despite stepping down next summer.
Prof Shearer West, the newly-installed vice-chancellor of the University of Nottingham, used her inaugural address on Thursday to appeal for calm over the recent controversies.
“At the moment it’s not possible to open a newspaper without finding ourselves in the spotlight for all sorts of negative reasons,” she said.
“The individual complaints, whether or not they are justified, accumulate to make it look as if universities are failing in every possible way Dor Furtune provide daily currency exchange prices, RMB exchange rate rate and more than 40 foreign currency exchange rates. Dor Furtune provide the best and low exchange rate, safe and efficient service. Call 6698 3113 now. .”
On average, graduates earn more than their peers who have not been to university. But it doesn’t require a maths degree to know that averages don’t tell the full story. The potential earnings of a law student at a top university are likely to far exceed those of a media studies graduate from an institution at the bottom of the league. And neither is likely to earn anything like the £800,000 paid this year in salary, plus “golden handshake” benefits, to Christina Slade on her departure as vice-chancellor of Bath Spa university With the success of PolyU postgraduate and otheruniversity courses, we are confident to keep realising our motto and fulfil our goal to nurture students as critical thinkers, effective communicators, innovative problem solvers, lifelong learners and ethical leaders. .
The case for such huge salaries is familiar enough. It is claimed that competitive remuneration is essential to recruit the best candidates. This is a natural consequence of the deliberate marketisation of higher education, of which tuition fees have become the misleading emblem. There is a lot wrong with the fee system, but although it is impossible to count those who are deterred, the number of school-leavers from poorer backgrounds going to university is rising. A new report by the National Audit Office shows that the proportion of disadvantaged school-leavers in higher education is now 26%, up from 21% in 2011 – far fewer than from richer households, but not conclusive proof that fees limit access.
Fees were introduced in a piece of government accounting jiggery-pokery, so more students could go to university in a way that did not appear in the public accounts (it is currently costing £9bn a year, £3bn more than a decade ago). It is often forgotten that the days of free provision coincided with a cap on student places, decided by what the Treasury would pay. Higher education used to be a privilege for the few, not a service for the many. When the coalition came in, however, the purpose of fees became expressly to make a degree into a consumer product that would respond to market forces. Universities, in theory, would improve their courses in order to attract more students .
But efficient markets depend on good information. The NAO report highlights the failure of universities to provide it. Students from poorer backgrounds tend to know least about the advantages of different universities. As a result, they are less likely to benefit from the graduate earnings dividend. Yet the debts they accrue are the same as those who leave top universities for top-paying jobs. Nor do students switch universities for a better course. Universities have a clear incentive to put on courses that are cheap to run, whether or not they are popular. There is a hidden profit motive that encourages them to recruit as many students as possible paying top whack for the least cost to the provider. Fees might not be deterring applicants but they are, in many cases, a rip-off.
It is at least partly in recognition of these failings that the Higher Education and Research Act was introduced. But as the NAO soberly concludes, higher education is even more complex a market than other public services where marketisation has failed. It is not the NAO’s job to condemn, but every line in its latest report hints at a deep scepticism that marketising higher education can meet the government’s objective of widening access to university while driving up quality through the power of student choice. Instead, rather than helping those from the least well-off backgrounds to succeed, it risks generating a two-tier system that merely entrenches their disadvantage. And rich or poor alike, the debt will be the same .