Student Loan Debt Put up for Sale

Posted by Richard Ward in , ,

The UK government has begun the process of selling more student loan debt to the private financial sector.

Loans made to students in England between 2002 and 2006 will be included in the sale, which will be followed by other pre-2012 loans, with the aim to raise £12bn.

Although Universities Minister Jo Johnson said the sale would have no impact to those with student loans, the National Union of Students said it was an "ugly move on students".

The government has always aimed to sell the student loan book to private investors and over the next four years it will dispose of the loans from before 2012, when tuition fees in England were increased to £9,000 a year.

The new tranche of loans being put up for sale, dating from 2002 to 2006, come with a face value of £4bn and the government has promised that despite the sale there will be no changes to the terms and conditions for borrowers, ensuring the rate of repayment for former students remains the same.

Although Universities Minister Jo Johnson said the sale is part of the drive to bring public finances under control, the National Union of Students have warned it could begin a process in which loans are made more attractive to private buyers, at the expense of students.

Both Labour and the Liberal Democrats also condemned the plans.

Labour's shadow education secretary, Angela Rayner, said: "This government never learn any lessons, this sale will do nothing to ease the burden of debt piled on students by the Tories who have trebled tuition fees and scrapped maintenance grants."

However, Nick Hillman, director of the Higher Education Policy Institute, suggested there was plenty of misinformation about the sale of student loans and the main issue was ensuring good value for the taxpayer.

Applications for Nursing Courses Fall 23%

Posted by Richard Ward in , ,

Headlines are likely to focus on the top-level figures released by UCAS this week, which show a 5% fall in the number of full-time undergraduate applications for the 2017 academic year, however nursing was hit particularly hard.

The number of applicants from England that had at least one choice to peruse nursing fell 23% to 33,810 in 2017. This represents the largest decline across any subject.

In addition, most of those applying for nursing are over 19 years old and English applicants from this age group decreased by between 16% and 29%.

While the number of 18 year olds applying for all courses remained relatively flat, those applying for nursing in this age category fell 10%.

According to Janet Davis general secretary of the Royal College of Nursing, the decline in the number of applications for nursing courses can be attributed to the switch from grants to fees and loans.

She said: "We warned government the removal of student funding would see a sharp drop in nursing applications. These figures confirm our worst fears."

Ms Davies went on, suggesting the "nursing workforce is in crisis".

With mounting pressure on the NHS and the well reported winter crisis becoming a key political battleground, both the Secretary of State for Health Jeremy Hunt and the Secretary of State for Education Justine Greening will have a difficult task sugar-coating this decline.

Bath Councillor Critical of HMO Policy

Posted by Richard Ward in ,

Bath councillor Bob Goodman has criticised the amount of shared housing in the city and has suggested both universities must do more to address the housing balance.

Mr Goodman said that the current balance between houses of multiple occupation, student accommodation and family housing is "absolutely wrong."

Currently the local authority allows 25% of houses in Bath to be used as HMOs, although the actual figure is much lower. Many these HMOs accommodate students from the city's two universities and councillor Bob Goodman has conducted a review of housing in Bath to work out how the city can address the balance.

Mr Goodman believes the current 25% allocation for HMOs is too high, suggesting Bath is not big enough for that percentage.

In particular, he added: "Some roads in Oldfield Park are 60 to 70 per cent HMOs. That cannot be right for the community as a whole."

He suggested one approach would be for universities to build as much as they can on their own land rather than impact the rest of the city, which can result in an overloading of students into small Bath communities.

Councillor Goodman also argues that HMOs can make it difficult for young professionals to afford to buy due to the high value some properties achieve because of their potential for HMO use and subsequent profits.

The next housing consultation will take place at the end of May 2017 and Mr Goodman hopes the council will "substantially reduce the percentage of HMOs" in the city.

UCAS Figures Report EU Applications down 7%

Posted by Richard Ward in , ,

Initial reports indicate that the number of applications from EU students for places at UK universities have declined by more than 7%.

A committee of MPs investigating the potential impact of Brexit on higher education were told that the first decrease in the number of EU applicants for nearly a decade was attributable to the country's decision to leave the EU.

There has also been nearly a 5% fall in the number of applications from UK students and a 0.26% drop in international student numbers.

The figures relate to the January deadline for applications to university admissions clearing house Ucas and were disclosed during a hearing of the Commons educations select committee.

Official figures are due to be released by Ucas on February 2nd.

According to Professor Michael Arthur, president of University College London, applications at his institution had held up well due to the institutions central London location. However, there are expectations applications will vary drastically across the country.

Nicola Dandridge, chief executive of Universities UK agreed with Professor Michael Arthur, describing the EU numbers as fragile and that the UK's competitors would seek to take advantage of this.

She told the committee: "We are concerned about EU numbers.

"Bear in mind this is coinciding with our competitor countries, particularly in the EU, seeing this as a huge advantage for them. They are redoubling their marketing efforts and see Brexit as posing a good opportunity for them to recruit internationally-mobile EU students."

University leaders addressing the committee have urged the government to provide clarity and reassurance to both EU students and EU academics in the current climate of anxiety.

Cambridge Council Undertakes Extensive Student Housing Study

Posted by Richard Ward in , , ,

A comprehensive study commissioned by Cambridge City Council has shed light on student accommodation in the city.

The study will be used by the council and its partners to guide future student accommodation developments.

The report shows that in 2015-16, there were an estimated 46,132 students in Cambridge with a need for some form of student housing.

It also found that the University of Cambridge accommodated a high proportion of its students in university owned accommodation, while Anglia Ruskin University and other institutions had very little directly-owned accommodation. As a result, students at these institutions were more likely to stay in privately owned halls, shared housing or the parental home.

The assessment found the current strategy for student accommodation, which is laid out in the emerging Local Plan, is largely appropriate, but could be tweaked to strengthen the commitment to addressing the need for market and social housing, as well as student accommodation.

As a result of the study, the council is looking to make some changes to the Local Plan, to ensure that all student accommodation developments are directly linked to a particular educational institution, which has specific student housing needs.

The report also suggested the formation of a working group, consisting of council officers and representatives of higher education institutions, in order to effectively monitor student accommodation.

Councillor Kevin Blencowe, said of the report: "We recognise that there has been an increasing number of planning applications for student accommodation in Cambridge in recent years. The aim of this study was to provide us with greater understanding of student accommodation supply and demand in the city.

"This study means we have a clearer picture of student accommodation needs both now and in the future, which will help us plan how best to accommodate our student population, who are an important part of life in the city."

Mr Blencowe is to recommend the proposed modifications to the emerging Local Plan are considered by the Development Plan Scrutiny Sub Committee on 25 January.

SNP Encourage Feedback on Number of Glasgow Developments

Posted by Richard Ward in ,

The public is being asked to comment on the amount of student housing being built in Glasgow.

SNP MSP Sandra White is to hold a public meeting to gather feedback and opinion on the growing number of student developments in the city centre and the West End.

According to Ms White, the city is being swamped with student accommodation. However, Glasgow City Council say students form 13% of the city's population, making a great contribution to the city's economy and that the rising number of developments reflect their growing numbers.

Among the developments planned is a 100-bed scheme on the site of a former playground at Kelvinhaugh Primary in Gilbert Street. A proposed scheme in the Trongate area has also been submitted and calls for the construction of 586 student rooms, representing one of the city's largest housing developments ever.

Commenting on the applications Sandra White said: "Every single piece of spare land in the West End and the city centre is being taken up by student accommodation.
What do we want Glasgow to turn into? Do we want Glasgow to end up like St Andrews, which is like a ghost town at the end of semesters?

"These are profiting businesses. They don't pay community tax or council tax. It's about time we actually looked closely at Glasgow City Council plans."

The MSP suggested instead that the city should be trying to bring families into the city centre, creating more social housing. Ms White hopes to finalise plans to hold a public meeting in the next few days.

Newcastle Councillors to Vote on Tighter Building Controls

Posted by Richard Ward in , ,

Councillors in Newcastle have been urged to approve a plan which aims to bring greater control over the number of student flats being built in the city.

At the same time, Newcastle City Council's planning committee are assessing a pair of new student accommodation blocks, which if approved would lead to a further 451 student bedrooms being built across Ouseburn and the city centre.

After six weeks of consultation with businesses, experts and residents, the council's cabinet will decide this week on whether to amend its 'Maintaining Sustainable Communities' policy which councillors argue will protect the city centre from excessive purpose-built student accommodation.

If the plans go ahead, developers will need to demonstrate their conversion or new build won't lead to an over-concentration of such developments that "could be harmful to the area's vibrancy, environmental quality and residential amenity".

The design and quality of the buildings will also be more stringently checked. In particular, purpose-built student accommodation will need to show it could be suitable for conversion into more traditional homes, to prevent the city being lumbered with empty buildings should demand for student housing change.

The council adopted a similar policy in 2011, introducing new rules to limit the number of homes in areas like Jesmond being converted to flats aimed at students.

Subsequently a boom in purpose-built accommodation close to the city centre has resulted in 9,500 new beds being created since 2007, with planning permission for more than 5,000 additional beds.

The updated policy still aims to protect areas where family homes could be built, with greater controls on the creation of large student blocks.

Ged Bell, cabinet member for investment and development said of the proposals: "Clearly now is the time to update our policies, and it's vitally important we are able to provide the right type of accommodation to suit the needs of all the communities we serve, to make sure Newcastle is an attractive place to study, live and work."

Tighter Visa Rules Could Cost the UK £2bn a Year

Posted by Richard Ward in , , ,

According to forecasts produced by the Higher Education Policy Institute, a tougher stance by the Home Office towards overseas students studying at UK universities could cost the country up to £2bn a year.

The report also found that UK higher education could increase revenue from higher fees for foreign students after Britain leaves the EU, but the potential gains would be wiped out if the government insists on tightening student visa numbers.

Commenting on the report, director of Hepi, Nick Hillman said: "Were the Home Office to conduct yet another crackdown on international students, then the UK could lose out on £2bn a year just when we need to show we are open for business like never before."

Mr Hillman suggested an easy and costless solution would be to remove international students from the net migration target, which would also signal a change in direction.

The study examined what the impact could be if further efforts were made to restrict student visas as part of the government's larger strategy to force down immigration. It found that approximately 20,000 students could be deterred, and although universities would lose around £500m a year in fees, the wider UK economy could lose a further £600m a year in reduced spending.

However, the largest loss would be over £900m a year foregone in what the report described as "the detrimental impact on universities' supply chains" through lost spending and the "indirect and induced effects" on the UK economy related to this source of export income.

Deputy chief executive of Universities UK, Alistair Jarvis, said the report provides a "stark" warning of the possible economic loss associated with policies that restrict European or international student numbers. He argued that if universities are to continue to boost the economy and benefit communities, they will need the right support from government.

Private University Expansion Plans Criticised

Posted by Richard Ward in , ,

A report into government plans to expand private providers in the UK's university sector have been labelled as a risk too far.

Produced by the Higher Education Policy Institute, the study highlighted that the cost of student finance for these alternative providers quadrupled in four years to £382m.

The document also warned against a high-speed process of allowing new providers to award their own degrees, however the Department for Education suggested the proposals would provide students with greater choice.

Robin Middlehurst, co-author of the report, referred to the United States, suggesting their "overly generous rules for alternative providers are a magnet for questionable business practices".

In particular, the study raised concerns about the rapid expansion in for-profit higher education colleges in the US, raising concerns about recruitment tactics, dropout rates and access to student finance support.

The Higher Education and Research Bill, which is currently before parliament, outlines a combined system for regulating traditional universities and alternative providers with the aim of encouraging a wider market for students. However, it's argued that more than two-thirds of alternative providers could still remain outside of regulations.

Currently there are more than 700 alternative providers, with nearly 300,000 students enrolled. Over 120 of these providers run courses eligible for student finance, which has seen the cost of tuition fee and maintenance loans in this sector increasing from £94m to £382m between 2010-11 and 2014-15.

Tough times ahead for UK PBSA sector

Posted by Tom Walker in , ,

The Purpose Built Student Accommodation (PBSA) sector in the UK has experienced a huge growth in popularity over the last few years, with all manner of financial institutions - ranging from sovereign wealth funds and pension & insurance firms to banks and Family Offices - investing in the asset class with hopes of realising a reliable return on investment that out performs most other asset classes.

However, with £5.9bn poured into the sector in 2015 and a forecast £4bn in 2016, there are fears that the UK's PBSA sector faces a tough decade ahead. A report by EY, a consultancy firm, predicts that demand for such accommodation will falter over the mid-term thanks to a dip in the demographic profile of UK 18 and 19 year olds, a growth in apprenticeship programmes and possible restrictions on international student visas.

The analysis, which predicts domestic demand for PBSA accommodation hitting a low in '21/'22, estimates that the international student acceptance rate to UK Higher Education Institutions (HEIs) would need to increase 63% on current levels to plug the deficit - unlikely given the current Government's immigration policy direction.

The outcome of this gloomy mid-term outlook is that developers and investors of PBSA will need to more critically appraise the current and forecast supply and demand dynamics for such developments on a city-by-city basis. Lower-tier universities will likely take the brunt of the forecast demand-crunch as reputable HEIs (such as those in the Russell Group) remain cushioned by undergraduates' desires for reputable degrees and future employability.

Even so, cities hosting top-tier universities will become more sought-after by investors and bids for suitable development plots will likely be driven higher as a consequence. As for existing accommodation assets in cities already exhibiting structural oversupply, competition for prospective tenants will naturally exert a downward pressure on pricing as owners of the assets look to maximise occupancy rates. In both cases, the outcome will likely result in a compression in income returns.

That said, for those investors willing to stick by their investments long-term, the report estimates a recovery in demand by the '24/'25 academic cycle, all else being equal.