Students should be encouraged on to technical education courses at colleges, rather than university degrees with low economic returns, a new report suggests.

A report - called A Question of Degree - by Onward, a centre-right thinktank conceived by Conservative MP Neil O’Brien, former director of Policy Exchange, also calls for student loan repayments to be reduced by half for all graduates with student debt, no matter when they graduated.

The authors of the report - Mr O’Brien, Will Tanner and Guy Miscampbell - say that a reduction in the flow of students on to courses with low economic returns should be complemented by the expansion of courses for those subjects at other levels in the tertiary system, including through higher level apprenticeships and degree apprenticeships.

They add: “This would complement the reforms the government has already introduced to technical education, including the introduction of graduate apprenticeships and the introduction of T levels at 16 to 18. It would also maintain student choice while ensuring that students and taxpayers are receiving a higher level of return on the individual’s study.”

‘Apprentices avoid debt’

The report highlights that nearly one in five (18 per cent) graduates are no better off five years after graduating than those who chose to take a non-university route, such as an apprenticeship.

On average, graduate earnings only overtake those for basic apprentices after the age of 24, but apprentices are likely to have enjoyed several years of earnings and will have avoided debts from their time at university as well as the need to make repayments in the future.

The report’s authors add: “If we improve and grow higher technical education, and more students with higher prior attainment go down this route, we are likely to see the earnings of those on graduate apprenticeships and other higher technical education further increasing relative to university graduates.”

Cutting ‘low-value’ courses

In order to reduce the number of students taking up “low-value” courses, the report says the government should mandate the Office for Students to restrict eligibility for tuition fee and maintenance loans to courses that meet a minimum threshold for added value, and directly cut the number of low-value higher education courses.

It adds: “This would deliver higher earnings for graduates, lower costs for taxpayers and fulfil the potential of the technical education system that has been neglected by policymakers for too long.

“It will also be welcomed by employers who have long argued that there is a significant skills gap between what the education system produces and what the workplace needs.”