EEF response to postgraduate loans consultation

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Summary

EEF supported the proposal for postgraduate loans when announced by the Chancellor at the Autumn Statement 2014. The introduction of loans has the potential to increase the supply of sought after higher-level skills. The information in the consultation document provided, as well as other research such as the Perkins Review of Engineering Skills clearly shows that access to finance is a barrier to progression into postgraduate taught Master’s study.

In our overview, the introduction of loans for postgraduate students as a policy should not be taken in isolation. Instead, government should look at how it can boost supply of higher-level skills, particularly in STEM, as a priority over the next Parliament. We have above given manufacturers views on what they believe to be the most influential ways to increase the supply of STEM learners at higher education level.

Awareness of postgraduate study is also an issue. In recent months, in particular, we have had a number of queries from manufacturers about postgraduate conversion courses. This has occurred where the existing, or potential employee, has acquired either an engineering or science discipline, that doesn’t quite meet the needs of the business, or they still lack the technical skills and competences needed to succeed in the role and a postgraduate conversion course could offer these skills in a relatively short time period (typically one year).


As the consultation document highlights there is no cap on how much universities can charge for most postgraduate courses. However, analysis has shown that the median net fee for a full-time postgraduate taught course at an HEI in 2012/13 was about £8,000. The learner will also need to ensure they have sufficient finance to cover any required maintenance costs. A £10,000 loan is likely to keep the majority of postgraduate taught degrees in scope and allow learners to use the loan to contribute to any maintenance costs. As the consultation sets out, the loan is to be considered a contribution towards the costs and not providing finance to cover all costs. However, the government should commit to reviewing the loan amount to ensure that it remains fit-for-purpose. We would not want to see for example learners deterred from enrolling in postgraduate taught engineering courses because they are more expensive than other subjects.

It may be the case that some learners wish to borrow a lower proportion of the loan amount on offer. This is likely to be the case where the learner is an employee in company and the employer is willing to contribute to some of the costs of the postgraduate degree. It is important that the new postgraduate loans allow for such flexibility to encourage employers to continue to invest in their staff.

There will be a risk that Master’s course fees increase as a result of the availability of loans. It may be that the current fees are charged at lower rates currently to increase participation. There seems little government can do to mitigate this risk given there is no cap on fee charges for postgraduate degrees as there is undergraduate degrees. Government’s reaction should not be to immediately apply a cap on postgraduate degrees also as HEIs may need to expand various departments as a result of potential increases to postgraduate enrolments and will need to ensure they have sufficient financial resource to do so.

Read our full response below

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Head of Education & Skills Policy

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