Labour MP John Denham has announced the party’s plans to redirect money spent on paying off student debt to fund “debt-free” degrees.


Labour’s plans could allow 50,000 graduates per year to obtain debt-free honours degrees, which will be funded by both their employers and the government. The aim of this is to make university education more applicable to young people in business.
John Denham’s ideas will be included in Labour’s manifesto for the 2015 general election. Denham, the former Secretary of State for Innovation, Universities and Skills will ensure that people in employment will be able to study degrees relevant to their current or future area of work.

In-work students will receive a training allowance or wage from employers during their degree, which will carry no fees.
Denham will outline the plans on 16 January in a lecture to the Royal Society of Arts. Denham will say: “Graduates in England face the world’s most expensive public higher education, yet too many degrees don’t deliver what students or employers want. Huge sums of public money are wasted writing off unpayable debts, and paying living costs for students who would rather have jobs.”

“When money is tight, we must look at how higher education can offer a better deal for students and employers, not just at ways of forcing graduates to pay ever more.”

The proposals are a continuation of the Workforce Development Programme launched by the Labour government in 2008 but abandoned by the current government in 2010.

Under the previous scheme, employers contributed an average £3,000 to the cost of teaching the degree.

Katja Hall, CBI policy director, said: “The UK needs to vastly increase the stock of workers with higher-level skills to drive long-term growth and stop us falling behind our competitors. We need to tackle the perception that the A-levels and three-year degree model is the only route to a good career.”

“When faced with £27,000 debt, young people are already becoming much savvier in shopping around for routes to give them the competitive edge in a tighter job market. Universities must be much more innovative to take advantage of the change in students’ approach. And we need businesses to roll up their sleeves and expand high-quality alternative routes where degrees are not the best option for young people.”

Denham is expecting the proposals to attract attention from many businesses, who he believes will save money from having hand-selected trained staff. Under the proposals employers and students will be able to adapt courses to suit their own interests.