English master’s loans ‘almost entirely erased’ rich-poor entry gap


Progression rates to master’s also increased for black students, but have not equalised between men and women, study finds

The introduction of master’s loans in England erased the gap in the entry rate between different socio-economic groups to this level of study “almost entirely”, according to new research.

A study, published in the Oxford Review of Education, showed that the progression rates to taught master’s of those from the lowest socio-economic class grew from 6 per cent in 2013-14 to about 13 per cent in 2017-18, following the introduction of non-means-tested loans for master’s study in England in 2016-17.

They found that the progression rates for the highest socio-economic group grew from almost 9 per cent to just over 14 per cent.

Researchers from the University of York, who analysed the destinations of the 1.3 million UK first-degree students over a five-year period, said that they found that taking into account a range of other factors, such as subject and institution of first degree or prior attainment, “the differences in entry rate disappeared almost entirely.”

Overall, when master’s loans were introduced in England in 2016-17, the rate of first-degree graduates progressing to a master’s course grew by 3.6 percentage points from 8.9 per cent to 12.5 per cent, which then increased to 13.5 per cent in 2017-18.

In 2012-13, prior to the introduction of the loans, 72 per cent of full-time UK-domiciled master’s students were self-funded, the researchers said.

“Our results suggest that the lack of credit, rather than debt aversion, may explain lower progression rates among graduates from lower socio-economic backgrounds in cohorts that did not have access to master’s,” the authors write.

Research by the UK Office for National Statistics in 2019 found that individuals with a master’s or a PhD earn provides graduates with a 10 per cent salary premium, they note.

Progression rates increased the most after the introduction of master’s loans in England among certain ethnic groups: among those who identified as black African progression grew from 12.6 per cent to 17.8 per cent, while for those who identified as black Caribbean the rate grew from 7.2 per cent to 11.1 per cent.

In the case of white students, the rate grew from 8.2 per cent to 11.8 per cent.

The study showed that the loan policy has not shifted gender differences in the transition to taught higher degrees: female graduates’ probability of progression is 1.8 per cent smaller than their male counterparts.

Co-author Paul Wakeling, professor in the department of education at York, said the research suggests “that many talented people – who have the requisite academic ability – have been missing out in furthering their education in the past simply due to their socio-economic background.”

“Ostensibly, our research indicates the loan policy is a marked success, since expanding and widening participation were among the declared intentions. In the social scientific study of education policy, it is unusual to find such clear evidence of narrowing inequalities following a policy,” he said.

However, the report authors warn that while it is good news that the loans have had a positive impact on black students, it should be noted that previous research has suggested that these graduates were more likely to choose to study for a master’s degree in the first place to counterbalance the discrimination they face in the graduate labour market.

Co-author José Luis Mateos-González, a research associate in higher education at York, said: “The loans policy has not shifted gender differences in transition to taught higher degrees among UK-domiciled students…While there may be improved transition rates for those from disadvantaged socio-economic backgrounds and ethnic minority students, the reasons for and consequences of these changes is not clear.”