Graduates, fees and welfare in Britain and Sweden

Graduates’ protests against rising higher education fees have revealed a sleepy discontent about the impact of loans on students’ welfare, despite Timo‘s arguments in their favour. In this post, I compare loans for HE in Britain and Sweden, arguing that British system provides insufficient support – and that this directly leads to a higher level of inequality in the experience of higher education. Moreover, there is a general problem of over-dependency on debt: even though this system has been set up during the previous UK government, the changes in policy settings proposed by this coalition risk of worsening the precarious situation of graduates’ welfare.

Comparing welfare sources for graduates in Sweden and England

The comparable data from the Eurostudent survey show an interesting difference in the distribution of welfare sources by looking at the “contribution of individual income sources.”  In Sweden the contribution of the state is 63%, with job and family providing, respectively, 24% and 14% of the income source; in contrast, in England the state contributes 43%, therefore providing 20% less state support than Sweden, with a higher contribution coming equally from job participation (34%) and from the family (24%). English graduates appear more dependent on private sources (job and family), while Swedish graduates on a public source of welfare.

Table from: Eurostudent, p.94

The different relevance of public and private forms of dependency reflects the level of universality and the settings of the Swedish and English system of graduate loans (data come from Eurostudent national profiles, Swedish student aid and the British website on student finance). In the UK, the maximum student loans for maintenance in 2010 was about £5000 for students leaving away from home (about £6000 for students in London); in both the cases the amount of money is insufficient to cover housing and living costs. In Sweden the general support is currently about £11000 pounds per year, about £3600 of which are grants (the rest consists in loans). Albeit resulting in a higher level of debts of maintenance, this system allows to better cover students’ expenses and it is, by definition, universal – it does not depend on the student income and therefore does not assume a residual role of the family in contributing to higher education.

As underlined by Barr, in the absence of tuition costs, the system of loans in Sweden is sufficient to cover living costs and does not take in consideration parental income. On the contrary, in England: “provision is made for a means-tested contribution towards living costs through subsidized loans, although most students will need to supplement their loan through parental contributions, part-time jobs and private loans” (Furlong & Cartmel p.39).

Student jobs

Given the insufficiency of state support British graduates are normally dependent on jobs and family sources, but not in an equal fashion. The different settings have a great impact on the student experience of graduate studies: in both countries a relevant proportion of graduates have part-time jobs (almost 50% of Swedish graduates in 2007 as indicated by Statistics Sweden), but English graduates are much more dependent on this source of welfare as indicated by Eurostudent.

Moreover, as underlined by the recent findings of HECSU in the UK young people from lower socio-economic backgrounds tend to be extremely dependent on jobs; according to studies in education (see Metcalf) this determines a different experience of graduate studies for young people from lower socio-economic backgrounds, which normally have to combine job and education activities. Graduates’ welfare is currently challenged also by exogenous factors: if we consider the rise of graduate unemployment in the last year in the UK (HEPI), the insufficiency of the graduate support risks to have a serious impact on those coming from a lower socio-economic background, with a lower possibility of using family sources.

In Sweden 90% of graduates use the same level of public loans (Statistics Sweden) and therefore the experience of transition is equal across the graduate population. The presence of insufficient means-tested loans in the English system leads to the use of family or, in alternative, of part-time jobs as a residual source of welfare, both of which stratify the experience graduate studies of young Brits. As underlined by the studies of Furlong and Cartmel, not surprisingly, the burden of debts is particularly relevant in England among young graduates of working class backgrounds that, lacking family sources, accumulate private debts, with the negative consequences of facing high interests and in feeling pressured during the job search (Furlong & Cartmel).

What has changed with the last reforms: is this the last drop?

The system of loans has been introduced in the 90s and since 2004 graduates can take loans to cover their tuition fees.  The burden of debts has since then increased and, consequently, a higher level of tuition fees risks of worsening the insufficient level of available graduates’ welfare. This coalition has also proposed reforms on the general level of living grants and loans that are summarised here.

The system of grants, guaranteed to everybody in Sweden, in England is residual: a grant up to £2800  for incomes below £25000. The original goal of  current reforms was to make the system more “progressive”, but it seems that the system has become more residual: for students with parents earning up to £25000 there is a slight rise of maintenance grant of £27 per month. Families with income up to £42000 will be entitled to a partial grant – the threshold has therefore decreased (it used to be £50020 per year) and the system is becoming increasingly residual.

Given the traditional inequalities of the British system, an insufficient means-tested system of loans and grants risks to increase, rather than decrease, inequalities in the entrance to education, but most importantly in the experience of graduate studies. The recent policy changes of this coalition, albeit not revolutionary, risks of worsening, given also the impact of exogenous factors, the welfare of British graduates.

About Lorenza Antonucci

Lecturer in Social Policy, UWS
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4 Responses to Graduates, fees and welfare in Britain and Sweden

  1. Mika Laiho says:

    Thanks! The stats for all worldwide countries give a good range of interesting feedback for anybody interested in comparing their own nation’s socio-economic situation to those in other countries. E.g. it seems about right that in Finland, if only marginally different, in Finland we are likely to seek family and private investments towards our education, and seek part-time work in order to subsidise what the government fails to provide; whereas Sweden, our neighbour, has more funding from the government and less family and private investments.

    What’s more, although higher education in some countries is ”free” (Finland being one example where only a Student Union fee of around €80 per year is paid upon enrolling to university), there is still maintenance costs to consider- with Nordic countries’ living expenses being some of the highest in the world. We could claim from this that the balance is addressed in the process. However, as the article suggests, maintenance grants in the UK can sometimes fail to cover the costs of living expenses, while student loans often fall short of the mark for covering tuition fees.

    As a person who has studied in London, from a middle-class background (if a struggling single-parent family is still ”categorically” middle-class), I found it hard to survive with only this financial support. My mother, unable to cover any costs during my undergraduate course, left me with the option of reaping the maximum ammual maintenance grant and maximum loan to cover my expenses at university. I had to take this option – and the result will be loans to pay back.

    I would have liked to have chosen a career in art, having studied my bachelor’s degree is English Literature. But the anxiety of such loans made me determined to forego another higher degree in something more stable, career-wise, and therefore get into further debt. In regards to my decision, I can say that the study above fails to testify to those students (like myself) who undertake master’s degrees and find NO SUPPORT WHATSOEVER from the UK government. I had to take out a hefty private loan called a ”Professional Career Development Loan” which is now charged with a steep rate of inflation for a graduate. This is also a reality for people in the job market today, in Britain at least, who feel they are less likely to afford the loans taken during their undergraduate years if they do not get a master’s degree and a better salary right away post-graduation.

    It sure felt good to vent these feelings. Luckily, I take this sort of thing with a pinch of salt, so don’t feel too anxious about paying off my loans as soon as possible. Those who are more wise, however, and those who cannot afford the luxury of a laissez-faire attitude, however, are a lot more anxious than I am.

    • Ben Baumberg says:

      Vents/rants are always appreciated, particularly internationally comparative, inequality-based rants!

      The article and comment also reminded me that the debate about tuition fees in the UK is curiously narrow – living costs are already a major issue, and the opportunity cost of not-working for three years (or one year postgrad) is enormous. I’m sure we’ll see university courses start to cater for both (i) people who want to combine work and study, as Birkbeck and the Open University manage; and (ii) people who want two-year degrees so they have less time out of the labour market.

      • Lorenza Antonucci says:

        Thanks Mika, Thanks Ben,

        and really sorry for the late reply to your post Mika! I thought that actually I could connect some of my theoretical to your cross-national (as Ben says) personal experience. First, I always had the impression, since I conducted my first researches in Finland a while ago (in Kuopio University), that in Finland the role of the family is more important than in Sweden in the welfare and, in particular, in graduate welfare – although Finland remains in the framework of a Nordic welfare model. Well I think about Sweden as an ideal-type of the Nordic system – as in the classical Esping-Andersen division- but I think much more work has to be done to explore the role of the family in this field.
        Second, I did not mention explicitly free higher education because I wanted to shift the focus (normally on education funding) to education living expenses and suggesting a more holistic perspective also in the “welfare-cuts” debate. I totally agree with the great relevance of educations fees: as in the case of England, when higher education costs increase that has an impact on living expenses as well. Considering living costs is also important: as you said Nordic countries have a high cost of living, but also in some parts of the UK (London area and other urban cities). This aspect is better explored in the Eurostudent dataset, but I thought it was better to stay short in the blog. According to these data England and Sweden can be quite comparable in terms of cost of living. In Statistics Sweden ( ) I found an interesting questionnaire exploring if the graduates funding allows students to live well (e.g. access to medical treatment, even going to the hairdresser or affording newspaper – in a Peter Townsend fashion ).
        I found very interesting that you mentioned your personal anxiety due to graduate debt (I am personally sorry for this as well, sorry for the conflict of interest answering to you about social phenomena), as this is a typical aspect in youth transition in graduate studies. Your comment actually convinced me to write another post about post-modern changes, risk and youth transitions in graduate studies so I am not going to add anything about this by now. Well…I can’t shut up, I basically think it is a very relevant empirical application of Giddens’ “existential anxiety” (as it has been pointed out in the literature), but I am going to write more about how I think this applies to graduates.

        Finally Ben, without whom this interesting blog would not exist (Ok I am thanking you in public), I totally agree with your comments about the UK. I think the increasing commodification of graduate studies – which started years ago – is going to become even more evident. I do not think that the current changes are particularly radical (again to me it seems that some policy changes have been introduced a while ago), but the final outcomes of these reforms will be a quite radical different way of going to Uni.

  2. sylvercloud says:

    Really informative . Great post you have here! Thumbs up!

    123 pengar are here to offer you the loan as soon as possible and in many cases can offer you the money directly into your bank account within an hour.

    Vi arbetar med särskilt utvalda långivare för att erbjuda dig de lån du behöver, inklusive kort- och långtidslån, kontantlån och andra former av obundna kreditlån.

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