Money

Why fees don’t act as a deterrent to uni

Would higher tuition fees put you off university? A study by the University of Leicester suggests demand for places will be strong even if fees went up by triple their current amount.

730 university applicants were asked if they would be put off by higher fees. The majority said they would still apply. Slightly more than 10% would be put off by a £10,000 yearly fee.

Prospective students don't feel locked out over fees (photo by subcircle)

This is surprisingly low in contrast to the recent NUS & HSBC survey that asked a similar question to current university students. Asked if they would have been deterred by higher fees, a whopping 78% said they would have been put off by fees of £10,000. [Click for full survey report in Word (doc) format]

So why the difference? The NUS survey asked students already in HE. Those students are more than aware of the fees burden, so it’s clear they would be alarmed by an even higher cost.

The Leicester study went the opposite way and asked sixth formers; those not yet in the higher education system. With so many people applying to universities, I’m sure most students don’t feel they have much choice but to accept whatever price they have to pay.

At a time when university is considered the only route to career success by many, the focus on applying won’t rest on fees. Suggest everyone had to pay £50,000 a year under these circumstances and I doubt even then you’d have a majority turning away from uni.

Bursaries and scholarships are available to cover some, if not all, costs. These schemes would have to grow if fees were to rise. Sadly, students most in need of this financial assistance are not sufficiently aware of such schemes.

The Office for Fair Access (Offa) reports that bursaries are not attracting poorer students. The “chaotic patchwork” of bursaries are not doing the job of supporting students most in need. Those at a financial disadvantage are far more likely to attend a university with lower bursaries. The links are clearly not joining up.

Nik Darlington recently complained that he found the NUS/HSBC survey to be unrealistic. He argued that by asking current or former students about fees, “This will not give you a realistic market opinion – these respondents are biased having already paid less than half of that amount for their current or former studies. You have to be putting the question to future students for satisfactory realism”.

While the Leicester survey did put the question to future students, I don’t believe that survey can paint a full picture either. The answers aren’t surprising. So long as prospective students deem university to be the usual route forward after school, most students won’t appear to be put off by fees.

Darlington says Leicester have offered “vastly more robust research“. Nevertheless, the results may be missing the wider point. Put both sets of answers together to see why. Before university, any fee is just a price that needs paying. During university, that fee doesn’t seem quite so obligatory. The change of opinion is important.

And how about after graduation? Are current fees worthwhile and, if so, would higher fees still be acceptable? I am skeptical about the £100,000 graduate premium in these changing times. Would a graduate-only survey highlight resentment over fees even at their current levels?

How important is opinion in these matters anyway? It seems that views vary, even amongst students. And as Ferdinand von Prondzynski suggests, “the electoral impact of fees may be much less predictable than one might think”.

The future is going to be tough, whatever happens. We have an ever increasing number of questions and very few answers. Even if the Browne Review recommends higher fees, as is expected, the coalition government have to work a reasonable solution. Under the circumstances, finding that solution will prove difficult.

And that last sentence is a contender for understatement of the year…

David Willetts: Student burdens and imaginative thinking

Universities are topping the news agenda again this morning. Lucky us.

Or maybe not.

David Willetts, the universities minister, has said that students should see tuition fees “as an obligation to pay higher income tax”.

Oh dear. Then again, we shouldn’t be such a “burden on the taxpayer”, should we?

photo by bisgovuk

Education, like health, like defense, like transport…like most things, is a taxpayer burden. We know taxes must be paid, even if we don’t like it, but we want them to be reasonable and to work.

The welcome expansion of higher education means we cannot expect all funding to come from the public purse. The system has changed too much to expect that.

But one thing about HE hasn’t changed over the years. That is the amount universities help the country achieve through both teaching and research. Based on this alone, public funding must still be the main way to help fund the system. It is reasonable to think that graduates should also contribute toward the future of higher education. But how much?

Willetts asks what can be done to ensure students can get more out of higher education. He asks for clarification on what we are getting in return for our investment:

“The system doesn’t contain strong incentives for universities to focus on teaching and the student experience, as opposed to research.”

This is a fair point in itself. Graduate repayments take 9% of your earnings above £15,000. This is too much of an ‘income tax’ when there is no specific and identified benefit.

One way of tackling the funding issue and that of student benefit is, according to Willetts, to look at systems of education provided by London University and Open University, providing more affordable teaching in HE. Methods like distance learning and local learning would certainly benefit some, but there’s already a lot of this going on, especially within further education. HE in FE is not a new concept. The format is welcome and useful, but it isn’t enough to transform the education system, especially if sufficient funding from the right sources is not forthcoming.

If the coalition government – whether through Vince Cable or collectively – is keen on reducing university places in coming years, a lot needs to change before it can work for students in general. Access needs to be guaranteed to all those who would benefit from HE. Additionally, those students need to be easily identified and given the help to understand what HE can do for them.

I’m not saying it’s an easy task, far from it. We need to tackle widening access as a priority before we start reducing the number of available spaces at universities. The system is already failing students with good grades who cannot get in to university. Widening participation doesn’t stand a chance when even already engaged and achieving students are unable to fulfil their potential.

I noticed that Newcastle University has been taking on local applicants with lower A-level grades for the past 10 years. Success stories such as Newcastle’s highlight mechanisms in place that allow access to all who would benefit. Even those who don’t achieve so well earlier on in life can go into HE and improve their chances considerably.

David Blanchflower suggests we look to Dartmouth College in the US for a way to combine widening participation with successful funding models. This would mean lifting the cap on tuition fees. But would that matter if half the students would receive scholarships and financial aid when it is needed? Would all this financial aid be possible anyway? I’m not sure, but the method is worth exploring in a time of big changes.

Graduates in the US are also far more likely to donate to their place of study. In the UK, graduate donations are nothing like as forthcoming, although they seem to be rising.

It is expected that Lord Browne’s review into higher education funding will list higher fees amongst its recommendations. Time will tell what comes out, but it seems we are being readied for this outcome. Willetts has said that people need to see the difference between a credit card debt and a graduate debt that is more akin to paying higher income tax.

I know the difference and it doesn’t have me sighing with relief.

If the fees cap is lifted – or removed altogether – the burden on the government and on students will increase hugely. Higher fees still won’t benefit the government due to the drain that loans have on the economy in the first place.

Willetts has, therefore, set out the need to “think much more imaginatively” regarding fees. He suggests that graduates may have to pay more for their education in the future, but they will be more accepting if they recognise the worth. That worth, he argues, can only come about through an improved teaching focus.

As far as students are concerned, imaginative thinking will certainly need to go beyond this.

How real is the graduate earning premium?

As we approach summer, there will soon be another group of graduates looking for jobs. Soon after, another set of students will hit campuses around the country for their Fresher year. Two very different starts, full of very different hopes and fears.

One of the reasons touted for going to university is that you’ll be better off. Statistics suggest that graduates earn more over their lifetime than those without a degree.

Is the vague term of ‘graduate premium’ a good enough reason to spend three or more years of your life in Higher Education?

Also, is the earning premium all it’s cracked up to be? What will it end up meaning for you? Do you expect to earn more than non-graduates over your working lifetime? If so, how much more?

photo by James Cridland

I’m sceptical about the overall relevance of a graduate earning premium. We are currently in a time of change, both economically and educationally. More people than ever are applying to universities. With huge intakes of students, there are still not enough places to allow everyone in, even if they’ve got good grades.

With so many people doing undergraduate study and collecting degrees, will the term ‘graduate premium’ mean as much in a couple of years? And a few years after that? And in 20 years?

I’m sure some people end up earning a lot more off their studies than if they’d taken a different route, but it’s not guaranteed. Far from it. Many students will graduate into more humble circumstances and may not achieve the dizzy heights they were hoping.

Indeed, students aren’t convinced about their future career prospects. According to a report by High Fliers Research:

45% of those leaving uni believe their prospects are ‘very limited’;
A third of those polled think most entry-level jobs will be taken by last year’s graduates;
1 in 6 students would have questioned university study had they realised how tough the graduate job market is.

If student numbers stay as they are, any premium is likely to slow to the point where it becomes misleading. Even if graduates remain, on average, better off than non-graduates, it won’t mean much if most of the population needs a degree. Any ‘premium’ would become a ‘norm’.

The High Fliers report suggests that students don’t expect to make as much money as they used to. Expectations are now an average of £22,000 for their first job. That’s down 3.1% on last year’s expectations.

Nevertheless, university is not about commanding a higher salary. It can certainly help you toward that goal, but using study in a vague attempt to make more money in nonsensical. Chasing a big pay packet is a time-consuming and pointless exercise when taken in isolation.

Uni Choices

The student experience can’t be judged based on future situations and perks that aren’t guaranteed. If money is the only thing driving a person, degree study may well be a mistake.

Personal choices over the institution you study at are often based on small points, uni facilities, and various random attractions. No matter, because they’re still based on what you see and what’s actually on offer. While you can check tables for suggested future earnings based on subject, it’s still a shot in the dark that’s frayed with uncertainty.

Your future is important. So important that you need to rely on yourself to push for the best employment terms. As a student or graduate, you’re in a great position. While the job market is tough, you are the most important piece of the jigsaw. The key isn’t where you did your degree or what you studied. That won’t help you command a huge earnings premium. You’re better off showing how you made use of and continue to make use of your learning and experiences.

A dedicated student who effectively pieces together their experience at one of the lowest ranked unis can easily sweep the floor with a half-hearted, uncertain student from a top ranked uni. Graduate premium doesn’t count for anything if the person doesn’t push their achievements and seek to do better with each new day. Your degree award doesn’t command a premium by itself. The piece of paper you get is more a sign of the skills you’re building up personally. Don’t let your achievement stop at that piece of paper…let it be the true start.

What does ‘graduate premium’ mean for you?

Russell Group on HE fees and funding

The Russell Group has today released its first submission to the Independent Review of Higher Education Funding. Student leaders are outraged that the report suggests an increase in debt repayment rates, lower repayment thresholds for graduates, and a real interest rate on loans.

photo by a.drian

The report says:

“Increasing the rate of repayment will have an impact on the size of the contributions made by the lowest, as well as the highest earners. However, it might be argued that the current repayment rate is generous, and that it might reasonably be increased without putting undue pressure on low earners.”

Professor Michael Arthur, Chair of the Russell Group, said on Radio 4 that they have taken the “big picture issue” and looked at many different ways of funding HE.

Sadly, many funding methods and savings mechanisms are largely dismissed in favour of increasing the burden on students/graduates.

I say ‘students/graduates’, because Michael Arthur also said that “It’s not the students who pay back…It’s the graduates when they’re earning over £15,000.”

Okay, so graduates pay back. But they were students. And it was necessary for them to be students and to receive loans in order to become graduates. I don’t personally feel it’s important to take the term ‘student’ subjectively here by suggesting the student doesn’t pay back. The discussion is about individual people. The individual pays back.

I’m sure the individual is more concerned with the amount they’re expected to repay, as opposed to the importance over being called a ‘student’ or a ‘graduate’.

Going back to the report, the Russell Group looks at the following funding improvements and opportunities:

income from efficiency savings;
income from private sources;
endowments and charitable donations;
business income;
international activity.

They conclude that these elements provide only limited help and are not significant enough on their own. It appears that the only feasible solution is from an increase in money from students/graduates. By paying back earlier and/or at a higher rate of interest, HE funding would be greatly helped, they argue.

The report doesn’t go the whole hog by suggesting a higher fees cap, but as Times Higher Education explains:

“The paper suggests that there are only three ways to offset the projected deficit among Russell Group members: cutting staff numbers, raising fees for home undergraduates and increasing fees for students from outside the European Union.

“The document then goes on to explain how cutbacks and fee hikes for non-EU students would fail to remedy the situation.”

No alternative funding systems are discussed, such as the graduate tax proposed by NUS, or a Business Education Tax as proposed by UCU. What impact does the Russell Group feel these alternatives would have? Do they believe the current system is the only feasible one? If so, why has there been such chronic underfunding, as they report?

One important aspect of the Russell Group’s report is where it argues that academic attainment before the age of 18 is “the most important factor in whether a student will go on to higher education”. It has been suggested that “educational inequality begins at a very young age” and I do believe this is a major issue.

While the Russell Group highlights that many countries are investing more in HE, they also cite a recent CBI report that suggests funding will come under ‘severe pressure’ in coming years at the very time when universities will need to keep up their competitiveness.

Unfortunately, the CBI report recommends “increasing support for universities through making savings in the student support system and increasing private investment, both from businesses and students”.

At some point, something will give. While governments in many other countries are investing in the future of their HE establishments, we face tougher times through less funding. Not only should we fight this, but also fight for a fairer funding system altogether. As UCU reports, “we need more imaginative ways to raise the necessary funds” to support HE.

The Russell Group’s second submission to the funding review is released on Monday, so we’ll see where that takes us…

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