The postgraduate problem?

by Andy Westwood on January 25, 2013

There is little doubt that we have a problem or two in postgraduate policy. Fifty vice chancellors recently wrote to the Observer to say so. BIS ministers have been asking for imaginative suggestions and are clear that they are very open to considering any new or ingenious ideas. Well here’s one: don’t do anything (or at least don’t do anything rash).

That might sound bizarre given the apparent decline in postgraduate numbers this year and the prospect that in a couple of years, the first Browne ‘graduates’ may turn their noses up at years of further study and debt. In my view these are reasons why we need to think very carefully indeed before we reach for a Big Bang policy solution.

My starting point is that considered in isolation there are many valuable aspects of the current regime that make postgraduate funding a pretty good system. Like Hong Kong in 1997 it might be described as ‘one country – two systems’ with very different undergraduate and postgraduate funding regimes (and with further differentiation between postgraduate taught and postgraduate research but with few looking to PGR as a problem with benefits from the science ringfence and HEFCE QR funding).

There is also some immediate history to consider. The Government haven’t actually taken away any postgraduate funding – there are pressures here and there but if anything it may be slightly higher than pre 2010 and even slightly more given the additional cash for postgraduate taught degrees in Band C subjects. In other words the system is quite different to that introduced for undergraduates.

Unlike the undergraduate system, it captures a philosophy of government and individual investment (and also institutional and employer support) in a pretty good balance. For me there would have to be a very good reason to want to change that – and especially if we moved to a system that deliberately throws that whole settlement out of kilter. Like David Willetts and others, I am not persuaded that simply extending large loans to postgraduates is the answer because as we know this will inevitably create regulation on numbers, additional bureaucracy and financial pressures that will ultimately reduce numbers, choice and funding elsewhere in higher education.

Various loan models have been put forward including schemes from NUS and CentreForum’s Tim Leunig. But it must be a concern that the availability of even a generous loan facility might not actually stimulate the demand that we want to see. Just look at undergraduate demand today. There is a demand problem now and potentially a much bigger one to follow down the pipeline through to 2015/16, as current undergraduates work their way through the system. But many universities have suggested that postgraduate taught numbers have been in decline for several years. So these must be for different reasons.

We know that there is significant and growing international competition for postgraduate recruitment and that in pricing terms we may not be as competitive as others in Europe and in the OECD. So the messages sent by UKBA and by the government’s wider immigration reform are exacerbating the issue – but this isn’t all down to them as international recruitment has accounted for around 50% of overall postgraduate numbers for some years now.

The recession and difficult labour market is also a factor and just as for part time and mature applicants for undergraduate courses, it is clear that many people are not taking up study options because they are worried about something. I think it is for an opportunity cost, or a time preference reason that mean many are unprepared to risk even the income from insecure or poorly paid work whilst the economy is shaky. And given that the typical postgraduate is part time and over 25 then these decisions can not be easily dismissed.

Employers always find it hard to subsidise training in difficult economic conditions and the costs of postgraduate courses can be significant. It has also been observed that the public sector has traditionally been a large scale sponsor of MAs and MScs and that austerity has hit this source of subsidised demand too.

Better access to finance – whether through employers or through improved career development loans or more commercial arrangements for individuals will help but will never be a panacea.

Postgraduate courses have also increased in price during this time – maybe not by as much as undergraduate tuition fees, but certainly by inflation and across the sector by as much as 10% this year. We need to be very careful with such pricing changes and must certainly not assume that postgraduate courses should automatically be priced at similar levels to the new sticker prices at undergraduate level. Price increases of even small amounts will have an impact when money in people’s and employers’ pockets is tight, as well as an effect in increasingly competitive international markets too.

And I think it is in some institution’s interest to find ways of acting and indeed incentivising and subsidising demand – it is a talent and HR pipeline, point of institutional differentiation and reputation too? Particularly for research intensive universities. But look at what Sussex are doing – it makes a great deal of sense for institutions that can cross subsidise to do so, especially if it leads to more valuable and better-funded PhD research numbers including through doctoral training centres.

Government could make this easier to do. In regulatory terms they could treat UG and PG as one system – Access Agreement spending and NSP cash could all target postgraduate as well as undergraduate recruitment as long as various conditions are fulfilled. Institutions that are most worried should be making the case for such contributions – and given that large Russell Group universities are spending millions on bursaries and fee waivers, even small amounts could make a big difference.

HEFCE and BIS could also use funding that supports Strategically Important and Vulnerable subjects and specialist provision in a more joined up way across UG and PG. They could also respond to the growing calls for a new government-backed campaign to promote the value of higher education and the returns that make investing time and money worthwhile. And of course this should apply to both undergraduate and postgraduate study.

So let’s look at pricing and competition, at affordability in difficult economic conditions and at international competitiveness. Let’s consider an on-going campaign to promote the benefits of all types of HE including postgraduate study. Let’s continue our efforts to persuade the Home Office and others that making it more and more difficult for international students to come here is counterproductive and just plain daft. Let’s encourage universities to invest in postgraduate support too and enable them to do so via a more supportive regulatory system.

But let’s not jump to a solution that might too easily sacrifice a system that carefully balances contributions from individuals, the state and from employers and institutions. Instead let’s understand how and why each of these actors might better engage and articulate the benefits of our existing compact, and act now to improve their own contributions and efforts and to increase overall demand.

{ 3 comments… read them below or add one }

Anonymous Coward January 25, 2013 at 7:58 am

“…let’s look at demand.” Seems you forgot that step of the process.

What is the unemployment rate for recent postgraduates? What’s the wage premium for a MA over a BA or a MS over a BS? What’s the wage premium for a PhD? Is there any economic incentive for postgraduate education, or is the opportunity cost net-negative? Does postgraduate education actually make it harder to find gainful employment? Are these not questions that need asking? If not, why not?

No matter how deep the demand-side crisis, the fetish for supply-side solutions lives on. Why is that?

Andy Westwood January 25, 2013 at 12:05 pm

Thanks for comments Anonymous Coward. Perhaps if I rephrase in more economic/ market language? Adjust pricing and incentives to influence labour and employer demand (rather than extensive supply subsidy at inflated pricing), address information failures and develop better understanding of short term time preference/risk and opportunity cost issues. These last two issues (alongside employer demand and labour productivity issues) might be helpfully informed by greater information on returns and employment rates – see
http://www.ukces.org.uk/publications/er26-skills-almanac-2010 (pp 96 onwards) – as a reasonable place to start.

Liz Morrish January 25, 2013 at 12:59 pm

“Like David Willetts and others, I am not persuaded that simply extending large loans to postgraduates is the answer because as we know this will inevitably create regulation on numbers, additional bureaucracy and financial pressures that will ultimately reduce numbers, choice and funding elsewhere in higher education.” More than a little intellectual elision going on in this argument, if not full-force circularity. What is not addressed is the fact that there is demand for postgraduate education, but indebted students are not willing to accrue more debt. Thus in the UK we have fewer people going forward to PG than any other OECD country, and indeed, fewer than Kazakhstan.

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