Universities should “drop or revamp courses” that produce low-earning graduates, says education secretary Damian Hinds.
The recommendation comes as the Department for Education (DfE) releases new analysis that suggests “on more than one in 10 of all courses, there is a 75% chance that graduates won’t be earning enough five years after leaving university to start making loan repayments.”
Graduates begin repaying their student loans on earnings above £25,000. The Augar review has recommended this threshold should be lowered to £23,000.
Damian Hinds talks about low value courses and defining low value in terms of LEO – I personally think it’s a shockingly bad thing to do because it is so narrowly focused on PAYE – Andy Youell, independent data strategist
At present, taxpayers fund 45% of the cost of HE. A statement from DfE said: “Mr Hinds says it isn’t right that institutions benefit from student loan funded fee income for delivering poor value courses, as students and taxpayers are the ones that suffer.”
A spokesperson for the DfE said the measurements were based on the Institute for Fiscal Studies’ (IFS) report on Longitudinal Educational Outcomes (LEO). LEO data is calculated using PAYE earnings.
Andy Youell, independent data strategist, told a UB webinar: “LEO is not a return providers make. It is figure governments make by joining and making data sets.
“Damian Hinds talks about low value courses and defining low value in terms of LEO – I personally think it’s a shockingly bad thing to do because it is so narrowly focused on PAYE.”
Youell says measuring a course’s success using LEO data is flawed because it does not take into account the career trajectories of different graduates. “It is not just those who graduate from creative subjects but also people who are maybe entrepreneurs and don’t earn much in the first few years or who work overseas who are overlooked in this measurement.”
University Business understands from the Office for Students (OfS) that the regulator takes a holistic approach to monitoring providers and courses. The regulator bases its assessment using lots of measurements including the rates of completion, students’ attainment and graduate outcomes (such as the percentage who pursue further study or progress to highly-skilled or professional work).
A spokesperson for the OfS said while it was important to improve transparency for applicants (including the average earnings of graduates), judging courses on potential earnings was not an accurate measurement of the varied reasons students enter HE.
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