Graduate education in the UK: The postgraduate puzzle

Graduate education in the UK has long been seen as a peripheral issue. Over the past 25 years, successive governments have focused their efforts on reforms to undergraduate education. Postgraduate education has often been an afterthought, or not even a thought at all. Many commentators have leveled criticisms at the recent Browne review, which devoted just a single page to the issue in its 60 page report, and concluded that, “Postgraduate Education is a successful part of the higher education system and there is no evidence that changes to funding or student finance are needed to support student demand or access.”

But how true is this assertion? With around 500,000 taught postgraduate students there is little doubt that postgraduate education in the UK is successful; the key question is how we maintain that success going forward. Postgraduate education in the UK is interesting in that, other than international students, it is perhaps the first and only example that we have of a free market in higher education. Fees for master’s-level programs are unregulated and have been for some time. Institutions are free to charge whatever fee they think the market will bear. And they do. Fees at UK institutions range from £3,400 to £27,522 (between $5,600 and $45,700 CDN), and these have increased by around 60 per cent over the past decade. This marketization also means that only a minimal amount of state funding is offered to institutions to support the cost of taught postgraduate provision and no state funding goes to students to help with tuition and living costs.

This leaves the provision of postgraduate education in a very vulnerable position in the UK. For the first time ever, we have seen a decline in demand from UK domiciled applicants for postgraduate-level taught programs. Although many link the dip in demand with an increase in the undergraduate tuition fee, evidence to support this has yet to be seen. It is simply too early to tell. There are also other factors at play; the global economic downturn has undoubtedly had some effect on demand for master’s programs. Studies tell us that in a recession, university enrolments will tend to increase as fewer jobs are available in the labour market or as people try to “recession-proof” themselves through higher qualifications. But as economic commentators have been at pains to point out, this is not a typical recession. It has lasted much longer and has had a much deeper effect than any downturn since the beginning of the last century. Perhaps the initial recession effect has already taken place, and the residual effect is that people can simply no longer afford a master’s degree.

It is this question of affordability that creates much of the debate around the decline in demand. The UK government’s social mobility tsar, Alan Milburn, recently described postgraduate education as a “social mobility time bomb”. At the undergraduate level, students are eligible for a comprehensive financial support package—composed primarily of loans—which covers both the cost of tuition and living costs. At the postgraduate level, there is no government-backed or subsidised financial support package. Students must have the funds to pay up front for their tuition and to cover their living costs whilst studying. Those who do not have the means to pay are not able to access postgraduate study. The UK higher education system is rooted in what has become known as the Robbins Principle: higher education should
be accessible to all those who have the academic ability and the desire to undertake further study. At the undergraduate level, the Robbins Principle is evident throughout government policy. Considerable progress has been made in widening access to higher education and in encouraging those from non-traditional backgrounds to enter a university or college. The concern then at the postgraduate level is that we are regressing.

Access to postgraduate study is constrained by the student’s ability to access non-government sources of funding: savings, family support, or funds from commercial lenders. But more and more occupations require a postgraduate-level qualification. This is particularly true for accessing high-paying occupations such as law or architecture. In addition, so-called credential inflation means that occupations that may have traditionally recruited first degree graduates are now using a postgraduate qualification as a further filter. We have seen a rise in the number of students obtaining a postgraduate degree in the belief that it will differentiate them in an increasingly competitive employment market. In fact, over the past decade we have seen the proportion of the UK’s working population with a postgraduate qualification almost double, from 4.4 per cent in 2001 to 7.9 per cent in 2011. So if the most sought-after, highly-paid occupations are now calling for a postgraduate-level qualification, what does this mean for those who can’t afford it? Income inequality in the UK has risen over the past 30 years, and according to the Equality Trust the UK is one of the most unequal countries in the developed world. Whilst mass expansion at the undergraduate level has broadened access to higher education, access to postgraduate study has become more restrictive. In this light, Alan Milburn’s “social mobility time bomb”seems like a very real possibility.

The final piece of this postgraduate puzzle is the issue of international students. Much of the rapid growth in postgraduate student numbers up to 2011 was driven by enrolments from students outside of the UK and European Union, which grew by 98 per cent between 2003 and 2011. Over the same period, home and EU student numbers grew by just seven per cent. International taught postgraduate students now make up around a third of the total postgraduate population. This has masked some of the problems that exist in BellArticlerelation to demand from UK domiciled students. However, the recruitment of international students has been challenged by recent changes to UK immigration policy. The current UK government has set itself a target to reduce net migration from more than 250,000 to the tens of thousands by 2015. Unfortunately for universities, and for the international students who make up a relatively large proportion of total enrolment, the UK has become a less-desirable location for individuals from abroad. Changes to immigration policy have specifically affected international students in a number of ways, including more stringent entry criteria; reduced entitlements during study, which include the ability to bring dependents; and a reduction in the post-study work options available to help pay for their studies.

With over 40 per cent of international students coming to the UK to study in master’s-level programs, it is unsurprising that postgraduate students have been the most affected by these reforms. In 2011 the UK saw a four per cent fall in international students coming to study in master’s programs. In comparison, in the three preceding years, the annual growth rate was between seven per cent and 15 per cent per annum. International tuition fees are a significant source of income to UK universities, bringing in over £3 billion ($5 billion CDN) each year, so any drop in enrolment will have serious financial implications. But the damaging effects of the changes to immigration policy go far beyond university balance sheets. The growth in international student numbers has generally been concentrated in a handful of subject areas. These have tended to be science, engineering, mathematical and computing sciences, and business. In these areas, international students now make up more than 50 per cent of total enrolment. In fact, there are undoubtedly programs across the UK which are only financially feasible because of the number of international students enrolled in them. The restrictive UK immigration policy has the potential make some areas of university provision at the postgraduate level extremely vulnerable.

So where do we go from here? Postgraduate students are vital to the UK economy. By 2020, experts estimate that one in every three jobs in the UK will be at a professional and managerial level. Business and industry value the high-level skill, specialist knowledge, and critical thinking that postgraduate-level qualifications bring. Research has shown that the private benefits to individuals with a postgraduate level qualification are high. Researchers from the London School of Economics found that those with a master’s-level qualification earn around 15 per cent more than those with an undergraduate degree. Unemployment rates for those with postgraduate qualifications are around two percentage points lower than the rate for those with a first degree. Yet we have seen growth of just seven per cent over the past decade in the number of UK graduates going on to postgraduate study. So there is clearly a mismatch somewhere.

Some commentators have suggested that the problem lies in the information—or lack thereof—available to those who might go on to postgraduate study. Do students understand the benefits of postgraduate study, and are they able to find enough information to help them make decisions about enrolling in these programs? There is unlikely to be a definitive answer to this question, although arguably, those with a first degree should have developed research skills that would enable them to find at least some of the necessary resources.

Perhaps a bigger challenge—and this is certainly one that has captured the attention of policy-makers, students and universities alike—is the availability of and access to financial support. There is a widespread belief that by removing this barrier to access we would begin to solve the problems with demand. But this is not a straightforward solution, particularly if we return to the earlier discussion about postgraduate students being the only truly marketized aspect of UK higher education. The UK government currently provides loans to undergraduate students to support tuition and living costs. The total value of the outstanding loans is around £40 billion (approximately $66 billion CDN) and this is expected to rise beyond £100 billion (approximately $165 billion CDN) by 2030. The UK government simply cannot afford to finance an expansion or extension to the current outlay on student loans. Even in the event that the government did agree to the introduction of a subsidized loan scheme for postgraduate students, it would have to come with some caveats. It would almost certainly mean the introduction of controls on both the number of students that could study at the postgraduate level and the tuition fee that universities could charge. Given that the policy thrust at the moment is towards de-regulation and more freedom for universities, this is likely to be an unpopular solution.

So the postgraduate puzzle continues to play on the minds of policy-makers and university leaders. There is simply no perfect solution to the current dilemma, but it is unlikely that postgraduate education will fall from the UK policy agenda just yet. Not least because the issues around postgraduate education, and the possible solutions that are debated, provide fascinating insight into what a deregulated market-based system for all students could look like in the longer term.

Elizabeth Bell is Senior Executive Officer to the Vice-Chancellor of the University of Greenwich. Previously, she worked on graduate education policy for Universities UK.