Policy

Upfront fees, perks for the rich, and the social mobility problem

Got cash? Feeling flush? Pay your money up front and enjoy the university YOU want to attend.

photo by alancleaver_2000

photo by alancleaver_2000

David Willetts, Minister for Universities & Science, is looking at proposals that allow rich students (or rich parents) to pay higher fees up front to attend university. These places would be ‘off quota’, so they would not change numbers going through standard channels of application.

But Willetts’ argument is facing a backlash from the outset. Willetts suggests that social mobility will improve because there will end up being more places available to students who cannot afford to pay straight up.

While the proposals have not yet been agreed and details are yet to be finalised, that hasn’t stopped negative opinion from emerging. Twitter has been awash with it this morning. By example, two major complaints of the idea are:

  1. Rich people will be able to choose the institution they wish to attend, thus making some universities more elitist;
  2. To cite social mobility is upsetting for many who simply see this move as an opportunity for rich people to buy a place while a standard student doesn’t have this guarantee.

Today’s report in The Guardian highlights the complexities and potential problems, but also the possible benefits from the new ideas under discussion.

There is no answer to what’s under discussion, because no detail has been agreed. On top of this, we’re already facing massive changes in terms of fees and funding both for students and for universities. This new proposal is yet another alteration that adds to the confusion. It’s almost impossible to find a solid base to work from to help higher education or students at the moment.

Entry requirements are set to be the same for those looking to pay more, yet there is still much chatter on Twitter of buying places without the grades. Willetts said on Radio 4 that this type of practice is not under proposal.

If entry grades are, therefore, set to be the same as standard places, what benefits would someone paying up front have?

  1. Practically guaranteed place to the institution you choose to pay for (because it’s not a place under quota);
  2. Money paid now means there is no need to think about loans and paying off in the future.

The first point is much more powerful than the second. Rather than worry about an oversubscribed institution, one payment after you get the grades is all you need to go where you want.

Yes, it’s a perk. Yes, entry is based on wealth (after grade requirements have been met). But that doesn’t mean it cannot be used positively. The detail needs to be careful so as not to create an elitist normality. Additionally, much of the cash should be redistributed to help less affluent applicants and the like. In no way should this be seen solely as a money-making exercise for institutions, even if institutions require more cash. Balancing the books this way would set a dangerous precedent.

Unfortunately, discussion has been limited this morning because of the angle given to the new proposals. In mixing advantages for rich people with improving social mobility, any chance of debate and constructive discussion over these proposals has been blown out of the water.

http://twitter.com/wesstreeting/statuses/67867820486180865

If, despite the almost immediate backlash, the government proposals become a reality, I imagine they will ditch the ‘social mobility’ justification. I wouldn’t be surprised if they’re looking to move away from that angle already.

—

UPDATE: When I mentioned a backlash, I wasn’t exaggerating.

In fact, such opposition meant the government had to rush out a statement on this matter. David Willetts said:

“We will only consider allowing off-quota places where it contributes to the coalition commitment to improve social mobility and increase fair access.

“There is no question of wealthy students being able to buy a place at university. Access to a university must be based on ability to learn not ability to pay.

“We have been discussing the idea of charitable donors and employers endowing additional places on a needs blind basis which will be subject for consultation in the higher education white paper.” [Source]

Wonkhe has also posted on the off-quota places issue and admitted, “May need to update later on as things move”.

It is a fast moving day. And It’s only midday at time of writing this! To put it into perspective, the final (amusing) thought can go to Thomas Graham:

http://twitter.com/thomasgraham/statuses/67908848303878144

Tuition Fees and the Future

Oxbridge and Imperial want to charge £9,000 in fees from 2012. The highest amount possible.

While we’re well aware of student protests and unhappiness with higher fees, it’s still no surprise that universities are announcing the wish to charge students top whack for tuition.

original photo by RachelH_

original photo by RachelH_

Take away the controversy of higher fees for a moment and focus on what’s happening to see why a varied market in fees is unlikely.

The Browne review wanted to see no price cap in place. A big, scary thought for many future students. But the cap hasn’t been removed; it has merely been raised.

Under current terms, the natural move by universities will be to charge the highest possible amount. This is because they face:

  • A near total removal of public funding for teaching;
  • The unrestricted ability to charge fees of £6,000;
  • A requirement to create an ‘access agreement’ for universities choosing to charge above £6,000, up to a maximum of £9,000;
  • A need for the average tuition fee to be £7,500 in order to simply recoup the losses from the removal of funding.

In turn, this means:

  • Universities need to find more money from somewhere in place of public funding;
  • £6,000 isn’t enough, on average;
  • An access agreement is required for £6,000.01 just the same as it is required for £9,000, so there is little incentive to charge below the £9,000 maximum.
  • As the average £7,500 required is above the unrestricted cap, all universities are likely to require a written access agreement.

This is why, back in November, I suggested that the cap will become the price. If different prices do occur, my guess is that they will be £6,000 and £9,000; the two caps.

Now that the Office for Fair Access (OFFA) have been issued with guidance for universities charging fees, commentators suggest that there’s not much stopping all institutions charging the maximum. David Willetts even states in the guidance to OFFA:

“It is, of course, not within your legal powers to impose any quota for how many institutions charge what level of graduate contribution, and that is consistent with our policy of an autonomous higher education sector, where institutions take their own decisions.”

Willetts suggests that further legislation may be required if all institutions charge the same amount. Universities, therefore, either face further turbulent times further down the line (when matters are already less favourable for them right now), or they face some kind of climb down from the government. Neither situation would be pleasant for anyone. Not for the government, not for the public, not for universities, and not for students.

OFFA’s role is to “promote and safeguard fair access to higher education for lower income and other under-represented groups” [source]. The government is, therefore, one step removed from social mobility arguments that could continue if access agreements don’t make the situation much better than they already are. Essentially, the ball is now in OFFA’s court.

But they’re in a tough position. You can see why £9,000 is being tipped as the way all universities will want/need to go. That’s before you take into account the idea of prestige. As soon as one institution suggests a lower fee, it will appear to be less worthy than those charging a higher amount, regardless of the realities.

There is little surprise that Oxbridge and Imperial are touting £9k fees. But it will only take one or two less ‘prestigious’ universities wanting to charge top whack for everyone else to follow suit. They’ll feel the *need* to follow suit, even if they’re thinking about charging slightly less.

When £3,000 fees were introduced in 2006-07, only Leeds Metropolitan offered a lower tuition fee (around £2,000). The move didn’t work for them and they eventually charged £3,000 like everyone else.

Will we see a repeat of this, with only a handful of institutions introducing lower fees? Who knows? The expectation remains — and is growing daily — that everyone will want to use £9,000 as the standard tuition fee.

As with everything in the future, only time will tell. But if we do see the tripling of fees as the norm, be sure to expect further moves in years to come. This is only the beginning of what may be a pretty long journey.

A new cap or a new price?

The government today responded to the Browne review recommendations.  A few brief details on government proposals:

  • A rise in the tuition fee cap up to a possible £9,000 (including a lower cap of £6,000);
  • higher interest rates on loans, up to 3% above inflation;
  • students pay back once they earn above £21,000;
  • slightly higher maintenance grant for students from families earning below £25,000;
  • Introduction of £150m ‘National Scholarships Programme’;
  • greater loan support for part-time students.

For greater detail, Times Higher Education have put together the main detail in the proposals.  There will be a lot more discussion throughout the week across the media, that’s for sure.  Then there’s the small matter of a demo in London on November 10…

Wordle: David Willetts - 3 Nov 2010, response to Browne & HE proposals

Just after the majority of teaching funding was slashed by the government, universities are going to have to find a lot of money from elsewhere.  So it’s unlikely that institutions will want to charge less than £9,000 if possible.  As with many capping exercises of the past, expect to see the cap become the price. Chances are that £9,000 will become a standard figure, with £6,000 being charged by any universities that cannot work toward the extra agreements.  Whether or not you agree with a full marketisation of higher education in a cap-less system, it’s hard to see a variable rate up to £6,000 or £9,000 do more than push the standard price up across all institutions.

This situation is clearly one in which the financial burden will be placed on students.  Those in favour of these changes are keen to say that it is graduates, not students, who will pay back the debt.  These graduates are still the same individuals, regardless of what you call them.  Students don’t pay up front at the moment, so the government is not proposing any type of revolutionary change.

Today’s proposals appear to be more of an offsetting exercise in regard to government debts. People won’t be saddled with credit card or mortgage style debts, but neither are they faced with that under today’s system.

Graduates will likely pay back more over 30 years.  The lower debt we currently have, coupled with a cut off of 25 years, is not much different to a higher debt and a cut off of 30 years.  The only real difference is the amount of time many individuals spend paying money back.  Some call this a stealth tax.  Some say that NUS and other opponents to fee hikes are scaring potential students unnecessarily.

Yet these proposals will make an impact.  And alternative measures have been offered.  For example, NUS released a blueprint outlining a graduate tax long before the Browne review was announced.  That graduate tax was essentially ignored.  The type of graduate tax dismissed in the Browne report was a basic, pure graduate tax; not the one offered by NUS.

For all the discussion going on today and all the debate within government, today’s proposals are not all that different to what is currently on offer.  Yes, graduates won’t find themselves having to pay scary amounts every month once they’re earning over £21,000, but those payments will go on for much longer than they do today, because:

  1. The fees will be higher;
  2. The interest rate will be higher than inflation;
  3. The cut off before remaining debt is written off will go up from 25 years to 30 years.

Some complaints regarding the graduate tax offered by NUS suggested that many graduates would have to pay back more than they do now.

However, at a time when fees are set to potentially treble, that argument cannot work.  There are pros and cons to everything.  Despite mentioning NUS recommendations, I’m not suggesting any particular solution here.  My main issue is that people are not being listened to.

And while debate rolls on regarding the future of HE, it’s difficult for anyone to sensibly debate the issues because the goal posts keep being changed.  Is it any wonder so many people are angry at Liberal Democrat moves to support higher fees when every single Lib Dem MP signed the NUS pledge that they would not support those very proposals?

Situations change and decisions do need to be updated based on new developments.  However, much of the situation was known when those pledges were signed and many alternatives had been proposed, including by Lib Dems themselves.

With an almost total cut in government funding for university teaching, much higher fees will not provide universities with extra income.  Those fees will also, therefore, result in no change to the student experience.  The individual is set to pay more for the same and, quite possibly, more for less.

It is, therefore, no surprise that so many students, academics, parents, and other individuals are unhappy with what’s happening in higher education right now.

As things stand, I imagine there will be a considerable turn out in London on November 10.  Mario Creatura recently said:

“I’m concerned that the decision to protest has been built on a foundation of emotive language gleaned from activists and the headlines which were ultimately based on Browne’s recommendation rather than what the coalition has actually said.”

Now the coalition has spoken.  Creatura was worried that the London demo may protest too many issues and cover too much ground.  But I feel this shows the magnitude of what is happening.

The Conservatives have been fond of saying “We’re in this together”, so why can’t people covering all aspects of higher education say the same thing?  The issues may be plenty and cover a large proportion of HE, but that’s exactly the reason why solidarity is necessary more than ever.

Far from diluting the noise, a collective effort may be exactly what’s needed to point out why the situation must be taken more seriously and with greater focus on the bigger picture.

The government wants students to have more of a say in what’s important to them regarding higher education.  I couldn’t agree more.  It’s time to speak up.

Universities: A non-market market?

With a Browne Report and a Comprehensive Spending Review out of the way, it’s now clear to see what the future holds.

Wait, no it’s not.  The future is more clouded than ever.  Fiddlesticks.

If you’ve had any interest in Browne and the CSR, you’ll have seen plenty of commentary.  I don’t want to go over the same stuff, although I’ve made lots of notes and can post more at popular request… 😉

Instead, I’ll keep in brief.  And I’ll leave most of the words to others.

Giles H. Brown, Editor-in-Chief of HE policy journal, Perspectives, explains that universities can’t be viewed the same way as businesses:

“Research suggest tertiary education is unlikely ever to operate as a market in a way an economist would recognise (Brown 2008); we are therefore likely to remain market-like, but not a market, in the same way as we are increasingly having to be business-like, but cannot operate truly as a business.  Like it or not, we cannot strictly separate the sector from the market; we are increasingly dependent on the ‘market’, while recognising the importance of retaining some degree of autonomy from it.”

[Perspectives, Vol.14, No.3, 2010]

So how much autonomy will there be?  Times Higher Education (THE) highlights concern.  This week’s editorial stresses that Browne claims to be offering universities freedom, but actually introduces a ‘state-controlled and regulated industry‘.

The Higher Education Policy Institute (HEPI) has published their response to the Browne Report, dismissing much of it as a serious way forward.

Then there are the concerns surrounding fees.  Prospective students be warned; if Browne’s proposals go through, there may be no real market on fees, much like now.  THE reports that most unis may have to charge around £8,000 just to get by.  This has led NUS to say the spending review informs an entire generation, “you’re on your own“.  And these possible fee rises may not even accurately factor in the natural decline in 18-21 year olds from 2012.

This may also have a knock-on effect for widening participation.  Steve Smith, President of Universities UK (UUK), explains:

“We know we are facing a demographic downturn from 2012, with a 15.6% decline in the 18- to 21-year-old age group within the decade – not the only cohort, but a major one, for student recruitment: already this year the participation rate has fallen from 41% to 39.7%.  Unless we can raise the attainment levels of 16-year-olds, the numbers coming into higher education from the lower socioeconomic groups will not increase at the pace we would like them to.”

[Perspectives, Vol. 14, No. 3, 2010]

Compare this with Browne’s wish for a further 10% of students to enter higher education.  Getting a particular percentage into HE is not the point.  Widening participation isn’t about greater numbers, it’s about ensuring that those who can benefit from HE are given that chance.  Some people enter HE who would have benefited from something else and I believe just as much effort should be placed on helping these individuals.  One positive aspect of the Browne Report is its recognition that better careers advice and prospective student guidance should be given to allow greater understanding and to give individuals a better chance in making decisions that suit their individual needs.

But can we achieve these things under a market system that doesn’t necessary work like a market?

These are strange times.  Bonkers, in fact.  All of us will be affected one way or another.  And nobody really knows how yet.

But there is one certainty: No matter what your opinion is — even if you don’t care — none of us can put our head in the sand.