High levels of student debt – on average £50,000 – force many young people to think twice about embarking on a university degree.
But the launch of a new ‘value for money’ express degree that takes just two years to complete, rather than the standard three, is designed to attract those fearing high bills for tuition fees and living costs.
The so-called ‘accelerated degree’ will work out 20 per cent cheaper overall and save students thousands of pounds in borrowing costs, according to Universities Minister Jo Johnson.
Announcing the proposals today, Johnson told The Mail on Sunday he hopes universities will grab the opportunity to offer students more flexibility and choice by providing short-term degrees over a wide variety of subjects – in addition to traditional courses.
The new degrees are set to launch in 2019 and are expected to attract mature students and those who cannot afford thousands of pounds in borrowing costs
His proposition emerges against a backdrop of frenzied criticism of the higher education system.
In the last week alone universities have been condemned for bosses’ fat cat pay, the loan system dubbed ‘diseased’ by Labour peer Lord Adonis – and the courses currently on offer denounced by watchdog the National Audit Office for providing poor quality for the price.
The new degrees, due to launch in 2019, are expected to attract mature students in particular who want to study but cannot justify the time or cost involved in a three-year pause from the workplace.
Johnson, says: ‘The aim is to break the current “one size fits all” model which I am concerned is squeezing out applicants. There has been a big decline in the number of mature students and I think that is why.’
But the planned scheme is not limited to mature students. He expects many school-leavers to seize the chance to pursue shorter courses. Johnson says: ‘There are plenty of young people who want a faster pace of learning and to get into the world of work more quickly. It will be the same degree with the same quality assurance.’
He says employers also like graduates with speedy degrees under their belt as it suggests they will make highly motivated, hard-working members of the workforce.
The teaching of the degrees will typically take 45 weeks a year over two years instead of 30 weeks a year over three.
Universities Minister Jo Johnson, pictured, has launched a new ‘value for money’ express degree that takes just two years to complete
Some smaller universities and colleges, such as Hertfordshire and Coventry, already offer two-year degrees but just 2,500 students are enrolled in such courses out of a total 1.5 million undergraduates in England.
The Government hopes traditional universities will see the benefit of offering shorter courses as a flexible option alongside three-year arrangements.
Universities will be allowed to charge 20 per cent more than the current £9,250 annual cap for tuition fees – making the teaching bill £11,100 a year or £22,200 for the whole course. That compares to £27,750 for a three-year degree – a student saving of £5,550.
Johnson says: ‘They will be the same programmes, same degrees, same quality but less debt and more value for money.’
He believes these courses plus newer arrangements from the likes of UK vacuum cleaner giant Dyson, which has set up its own engineering university in Wiltshire are set to shake up the system. Johnson says: ‘There is an appetite for something different as shown by the fact Dyson’s courses are oversubscribed by 20 or 30 times.’
Staffordshire University is another institution already offering fast-track degrees in subjects such as English, journalism and law (costing £18,500 in fees over two years).
Karl McCormack, who teaches two-year degrees in accounting and finance, says: ‘They offer students extra focus, the drive and immersive experience of learning over two years.’
Student Laura Montague, taking a two-year finance course at Staffordshire, says: ‘It prepares you well in terms of what the working environment will be like when you finish.’
The Office for Students, a new watchdog that will be in place next year, will support the provision of the new degrees. Government research suggests more than 70 per cent of universities report a craving for shorter courses among students and employers.
For many students a £5,550 reduction in the overall cost of a degree will only make a fractional dent in the giant debt they will carry for years.
Fees on standard degrees have trebled since 2012 and students can now expect to graduate with debts of at least £50,000 – or nearer £57,000 for those from poorer families who borrow extra to cover living expenses.
For full-time students in England, repayments equivalent to 9 per cent of income over £25,000 only begin once they have left university and are earning £25,000 or more a year.
Jake Butler, pictured, of the website Save The Student is calling for lower interests rates
But interest racks up at March’s Retail Prices Index measure of inflation (3.1 per cent) plus 3 percentage points while at university.
So on graduation those earning more than £25,000 pay on a sliding scale of up to 6.1 per cent where income reaches £41,000 or more.
The Government plays down the impact of the debt. After 30 years, any outstanding student debt is written off though for many thousands of pounds of interest will have been paid along the way.
Danny Cox, of financial adviser Hargreaves Lansdown, says: ‘Reducing a course by a year might bring the cost down a bit, but it is still an astronomical amount of money to saddle young graduates with as they head into the workplace.
‘The student loan system teaches young people that unaffordable debt is perfectly acceptable and you do not need to worry about repaying it – which is a terrible money life lesson.’
Liz Emerson, of the Intergenerational Foundation think-tank, says: ‘Graduates who make repayments are effectively paying a tax of 41 per cent. Jo Johnson is in the age group who got their degrees for free and does not pay extra tax for it. The Government needs to rethink the interest on these loans.’
Jake Butler, of website Save The Student, says: ‘Would students on a two-year course really get the same value as those on a three-year course? Given the fact many students already feel their contact time is too limited, I am not so sure.’
He calls for an end to the high rates of interest charged to all students, particularly since the highest rate applies while they are studying and unable to make repayments.
He says: ‘After graduation the interest drops to just 3.1 per cent if they earn below £25,000 from April 2018. Why can it not be this low when studying?’
Johnson told The Mail on Sunday that student funding, including interest rates, is still under review. He said: ‘Details will be set out in the coming weeks.’
No loans, a salary, student digs… welcome to the Dyson university
Sir James Dyson, pictured, launched the Dyson Institute in September
A desire to introduce innovation into the nation’s provision of university degrees was behind the launch of the Dyson Institute, which opened to its first students in September.
British technology tycoon James Dyson launched his own university in a bid to help plug the huge gap in the country’s engineering skills.
About 850 school leavers applied for 33 places on the four-year course. Unlike most other undergraduates, the successful applicants have their £9,250 annual tuition fees met by the company – plus they receive an apprentice salary of £15,500 a year.
Dyson is also in the process of building student accommodation. These few lucky students will have no massive debt to carry with them – and there is no obligation to stay with the company.
The students spend three days a week working on projects and the remaining two studying at the Wiltshire campus.
The first students will have their degrees awarded by Warwick University.
Inside the Dyson Institute, pictured, in Wiltshire, which was launched in a bid to help plug the huge gap in the country’s engineering skills