The graduate winners and losers: It’s regarded by many that leaving the EU will, in the short-term at least, slow down our economic growth. Interestingly, a drag on the economy can increase demand for higher education, particularly postgraduate courses. This was certainly the case in the aftermath of the 2008 financial crash.
We could also see a shift in demand for different types of graduates. The nature of that shift is not yet clear but, for example, finance graduates’ job prospects could suffer if the City loses jobs, while the demand for law graduates may spike massively if we face a high volume of complex legal work to implement the brave new world of Brexit over the next 5-10 years.
Government budgets and the education system
The approach of Cameron’s Conservative government to education has been pretty clear so far. It’s all been about increased competition, more market incentives, higher education costs as a result of growth in tuition fees and loans, and boosting student numbers. With a new PM leading the country come October we might see some changes here but, as we expect the government to remain a Tory one, any changes are unlikely to be wholesale.
Student finances: Mind the gap
One thing perhaps most likely to change is government spending. Education accounts for a significant 13% of the 2016 UK Budget, once you factor in higher education spending, student loans and national schools. If the pre-Referendum warnings are realised, then a new Budget could see a big slice of that taken back.
The government could also increase tuition fees still further to compensate, or stifle its student lending programmes. Or both. This would leave more students with a bigger funding gap to plug.
The grad factor
It’s no wonder that 81% of Referendum voters still in full-time education voted to Remain, according to the Lord Ashcroft survey of 12,369 voters.
Graduate status has been seen by some commentators as a key differentiator in the voting patterns – along with age, class and which region of the UK you live in. Here’s a startling fact we got from the BBC: Of the 30 areas with the fewest graduates in the UK, according to the 2011 census, 28 backed Brexit. And 29 out of the 30 areas with the most graduates voted Remain, including the City of London (where 68.4% are graduates), Belfast South (50.1% graduates), Cambridge (47.3%), Oxford (42.6%) and Edinburgh (41.4%).
According to a poll by The Student Room, the Referendum result would have been Remain had votes been allowed at 16 years of age.
The European flow
EU rules currently dictate favourable treatment of students from other EU countries by member states (compared to students from non-EU countries). This includes lower tuition fees, quotas for enrolment and identical access to the government loan schemes that are available to home students. But with the UK out of the EU, these agreements could be no more, which could make a UK education prohibitively expensive to EU students – and an EU education prohibitively expensive to UK students.
Around 6% of all students in the UK – and some 12.5% of Future Finance loan applicants – are from other EU countries right now. That’s quite a big ratio. We can expect that 6% to go down if the system changes. We will certainly be focused on continuing to service EU customers here at Future Finance. They might just need our help more than ever to access the education and career they crave.
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