Cancel student debt to bring the best into public service

31st May 2016

A shortened version appeared in The Times. This article is co-authored by Frontline’s Chief Executive, Josh MacAlister, and Chair of the Frontline board, Lord Adonis. 

It is an inconvenient truth that in parts of England there are persistent challenges in recruiting new professionals like teachers and social workers. These so-called ‘cold spots’ are often in areas where levels of poverty and isolation are greatest. They are the areas where we need to be directing the country’s best talent.

Towns like Blackpool, Bournemouth and Barnsley struggle with teacher recruitment. Slough, Bedford and Medway have social worker vacancy rates of 35% or more. These are areas with communities of high social need where more life-changing public servants, working alongside those already in the field, could make an enormous difference.

This long-term crisis could deepen with increasing competition in the graduate recruitment market. Whilst the graduate population is larger than it’s ever been, competition for graduates has never been as fierce. The country’s top employers have increased their graduate recruitment by over 7% in the last year and average starting salaries are now at £30,000. We also know from historical trends that when the economy is growing graduates turn away from teaching as a career choice. You could speculate that this trend is replicated across public service roles. We need bold action to address this gap between available graduate talent and recruitment challenges in areas of high social need.

The time is right for a student loan relief programme for top graduates entering public service roles in areas of need. The idea is not new and it has been tried before. In the United States, the ‘Public Service Loan Forgiveness’ programme was introduced in 2007 and has created incentives for graduates to enter traditionally hard to fill roles in social work, teaching and other vital public services. The scheme writes-off any remaining student loan debt after ten years of full-time employment in public service, government or non-profit agencies. The programme is now huge and some 300,000 participants are expected to benefit from the scheme when the first ten-year mark is reached in 2017.

Support for a student loan relief programme in England is building. Before the 2015 general election, the influential think tank Policy Exchange called for a student loan repayment scheme where government would cover monthly student loan repayments for teachers working in priority subjects. Last year, the Association of School and College Leaders called for a loan forgiveness programme and the charity Teach First have long called for loan write-off scheme.

An American study on student behaviour found that the prospect of debt repayment can reduce the chance of graduates picking ‘public interest’ jobs. If a programme could be introduced to cover, reduce or even write-off student loans for those entering public service – and in particular for those going to ‘cold spots’ – for a set period of time it could help attract and retain the best talent to where it’s most needed. Such a programme would also send a powerful signal that public service is valued and recognised by government and society at large as worthwhile and rewarding.

Any new loan incentive should be wrapped up in a new National Public Service programme. Having a dedicated and focused team behind the incentive would allow it be loudly promoted on university campuses. The programme could attract and cajole quality graduates to enter careers with a purpose in areas of greatest need. The team would be able to strike wider ‘cold spot’ deals with local councils and businesses adding incentives into an offer for prospective graduates. Some of this is already happening. Derby City Council recently offered people moving to the city as social workers £15,000 towards a mortgage deposit. Wrapping up incentives like this under a national loan relief programme could tip the balance to incentivise some of the country’s top talent to go where they are needed the most.

The costs of any student loan relief scheme would vary widely depending on the nature of the incentive. The Policy Exchange model of covering student loan repayments for those in challenging schools was costed as £37m. This would have saved teachers on the programme £3,800 over the period of this parliament. A full write-off programme for those undertaking five years of service could save graduates £40,000 over their career. This is against a backdrop of figures predicting that only 27% of graduates are expected to repay their loans in full. Given the long-term recruitment challenges in areas of need and the absence of alternative bold national action, we cannot afford to not try a relief programme.

We should act on repeated calls for a student loan relief programme and we should use the opportunity of such an initiative to bring more talented people into public service in those areas where the need is greatest. The problems are well known and long-standing. We should take every opportunity available to improve public services where they are needed the most and, in-turn, contribute to addressing deep social issues that have persisted for too long. A National Public Service programme could make a marked difference to getting the best talent to take up the challenge of public service.

Joint article by Lord Andrew Adonis and Josh MacAlister, Chief Executive of Frontline and an Associate Fellow of IPPR

– GDP growth and teacher applications: From PE report:
“DfE funded research into the reasons why graduates choose to enter teaching show  “a strong and significant negative correlation  between number of applicants to ITT and  GDP growth over the last fifteen years. When GDP falls, the number of applicants rises”.”
– Policy Exchange paper:
– Student loan behaviour:
– IFS figures:
– Derby scheme: