Universities’ increasing reliance on postgraduate taught fees as a source of income and its potential drawbacks

Zeki Dolen

The introduction of the postgraduate master’s loan for the 2016/17 academic year has led to a dramatic transformation in the landscape of postgraduate taught (PGT) education in the UK.  The number of first‑year PGT students in the UK has increased by 58% between 2015/16 and 2020/21, compared with a 11% increase in the number of undergraduate students over the same period. While undergraduate fees have been capped at £9,250 since 2017, average PGT fees increased by 60%, from £9,465 to £15,150 between 2015/16 and 2021/22. This considerably faster than the increase in the value of the postgraduate loan, which increased only by 18% from £10,000 in 2016/17 to £11,836 in 2021/22.

Source: Hesa, 2022

These trends mean universities have become increasingly reliant on PGT fees as a source of income.  For example, the contribution of PGT fees to King’s College London’s income has increased from 11% in 2016/17 to 19% in 2020/21, and it is no exception. PGT fees as a proportion of total income for higher education institutions (HEIs) in general have steadily grown from 8% in 2016/17 to 12% in 2020/21. 

This increase has been largely driven by Russell Group universities (excluding Oxford and Cambridge, for which fees make up a small portion of the overall income) and by universities in London.             

It is therefore unsurprising to find three London universities (LSE, KCL and UCL) in the top five of Russell group universities receiving the largest proportion of their income from PGT fees 

HEIs have rushed to expand their PGT provision to make up for declining real revenue per undergraduate student due to the cap on undergraduate fees being frozen at £9,250 (which will be particularly severe this year, given high inflation).  However, the speed of PGT expansion raises concerns around whether HEIs are giving due thought to their ability to maintain the quality of PGT student experience and around the implications for access to postgraduate education. 

As David Kernohan and Susan Smith point out, there is a lack of good‑quality or sector‑wide data on PGT student experiences and outcomes.  The only survey comparable to the NSS for undergraduates is the AdvanceHE’s Postgraduate Taught Experience Survey (PTES) survey, which is not comprehensive.  Nevertheless, the data that is available does shows a decline in the proportion of students who reported they were satisfied with the quality of their course, from 83% in 2016 to 78% in 2021.  The Office for Students (OfS) is in the process of developing an alternative Postgraduate Survey (PGS) and conducted a pilot with some HEIs in Spring 2022, but the results have not been made publicly available.

This is undoubtedly a positive development, but anecdotal evidence suggests that better‑quality supervision of PGT expansion would have been welcome much sooner.  Jim Dickinson has warned that ongoing rapid expansion of PGT numbers risks overwhelming universities’ capacity, while students across the UK this year have struggled to find private accommodation close to their universities after being told they would not be guaranteed university housing. 45% of all student complains to the Office for the Independent Adjudicator come from postgraduate students, yet they constitute only 26% of the student population.  The sooner a more comprehensive survey that addresses the particular concerns of PGT students can be implemented and better monitoring of PGT student experience can be put in place, the better. 

The introduction of postgraduate master’s loans initially had a positive impact on disadvantaged students’ access to PGT education, with a 59% increase in students from areas with the lowest undergraduate participation rates between 2015/16 and 2016/17.  However, the Sutton Trust has raised concerns that the increase in PGT course fees to the point where students have little, if any, of the loan left over to cover their living costs, which could reverse the positive impacts of the introduction of postgraduate master’s loans. The rapid increase in fees has already accelerated the decline in part‑time PGT student numbers. Meanwhile, research from MillionPlus shows that the ongoing cost‑of‑living crisis affects students from disadvantaged backgrounds most severely and contributes to students currently in higher education contemplating leaving their courses. There is therefore a very real possibility of these two trends working together to prevent students from disadvantaged backgrounds accessing PGT education.  This is a significant problem on its own terms, but the fact that postgraduate education contributes to improved professional outcomes suggests that it could have long‑term ramifications on inequality.

To conclude, there is a clear need for stronger regulation of the PGT sector.  The OfS should improve its monitoring of PGT course quality and student experiences to reduce the risk that the ongoing rapid expansion of the sector overwhelms providers’ capacity.  At the same time, the government should strongly consider increasing the value of the loan available to postgraduate students and implementing cost restrictions on PGT course fees.  


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