104. Our inquiry has demonstrated a widespread
conviction that a significant link exists between students' economic
circumstances and their propensity to complete their studies in
good standing. Whilst more work is needed to establish how the
various factors that influence retention and non-completion interact,
we believe there is a prima facie case for believing that
any deterioration in the quality and levels of student financial
support could have a detrimental effect on retention and successful
completion, and that this is therefore an important aspect of
the issues that we have been considering.
105. Financial support for students studying at English
universities is available from two main sources: local education
authorities and the university or college. Box 2 shows the principal
sources of support administered by local education authorities
and funding sources administered by individual universities and
colleges. Additional sources of financial support are available
for parttime students (including fee support, loans for
course related costs, Disabled Students Allowances and help from
Access Funds); NHS Bursaries available for students on some healthcare
courses; some students may be eligible for certain social security
benefits; and extra allowances may be available if students have
dependants. Career Development Loans are available to students
who are not eligible to apply for other financial support schemes.
|This is a period of significant change in the arrangements for students' financial support. We recommend that the Department for Education and Employment, working with individual universities, should monitor closely and report on the operation of the new financial support arrangements.Fourth Report from the Education and Employment Committee, Session 2000-01, Higher Education: Access, HC 205, paragraph 70.
106. Professor Diana Green drew the attention of
the Sub-committee to research commissioned by Universities UK
into the links between student debt and likelihood of successful
completion of higher education programmes. The project would also
analyse the benefits and adverse impacts of termtime working
and its effects upon universities' teaching programmes.
We expect the results of the research to be carried out by
Universities UK into the effect of student debt on student retention
to make a useful contribution to informed policy-making for future
student financial support arrangements.
107. The introduction of means-tested tuition fees
and the replacement of maintenance grants with student loans was
the most radical change in higher education finance and student
financial support in 30 years. There is a clear need to evaluate
carefully the consequences of this change. During our inquiry
concern was expressed that the new arrangements for students'
financial support may put the poorer students under more, perhaps
undue, pressure, with a consequent increase in non-completion.
We recommend that the Government should commission as a matter
of urgency research on the effect of new arrangements for students'
financial support on completion rates, particularly with regard
to lower socio-economic groups.
|Box 2: Sources of financial support|
administered by local education authorities
TUITION FEE SUPPORT
For 2000-01 annual tuition fees are £1,050. Support is available, on a means-tested basis, for the cost of these fees. Grants are payable to students on the basis on parental/student income. The Government estimates that from 2001/02 around half of all students will receive grants to cover the entire cost of their tuition fees.
Loans to students are available to help cover the cost of living while completing an approved course of higher education. The level of loan that students are entitled to varies with location of study, type of course, stage of course and the length of the academic year. The student and his or her family may be required to contribute up to 25 per cent of the level of the loan depending on income levels. Repayment of the loan will be triggered once income exceeds £10,000 a year, with repayment amounting to 9 per cent of annual income above this amount, collected by the Inland Revenue on behalf of the Student Loans Company. Total repayment costs are the value of the original loan, index-linked to inflation.
Supplementary grants are available for some students who require additional support depending on their circumstances. Students eligible for these grants include those with disabilities, those with dependents including lone parents, students with additional travel costs in certain circumstances and those leaving care to enter higher education.
administered by individual universities and colleges
Access funds are normally in the form of a grant to the student from the university or college, and are available to help students who are in financial difficulty. These funds can help with living expenses and course costs including childcare, travel, accommodation, books and course equipment. Students must normally have begun their course before they can apply for these funds. The university or colleges decides which students will receive payments and how much each payment will be, depending on the student's circumstances, how many other applications have been received and the level of access funds available to be disbursed that year.
Hardship loans are available in addition to normal student loans. To be eligible, students must have already applied for their full student loan entitlement. Hardship loans are added to the total sum borrowed via the student loan, and are repaid in the same way.
From Fourth Report from the Education and Employment Committee, Session 2000-01, Higher Education: Access, HC 205, Annex 2.
108. It is argued that there is a gap between the
reality and the perception of student finances. It is only to
be expected that after a rapid series of substantial changes,
there should be some turbulence before a settled understanding
emerges. It would be valuable for research to be undertaken on
the nature and effects of any such gap that may exist. Some
argue that the key features that need to be more widely broadcast
to encourage wider participation in higher education are these:
- undergraduate tuition fees are payable by
those whose parents are means-tested as being able to afford them
(approximately 50 per cent of students from 2001);
- higher education is a good investment of time
and money and worth borrowing forwithin reasonable limitsbecause
most graduates in general earn higher incomes in the long run;
- student loans are subsidised; and are repayable
only after graduation;
- additional financial help is available for
a few of the least well-off students.
We recommend that the Government should seek to
tackle the problems of debt aversion and, where held, perception
of student debt, insofar as they affect student retention by reinforcing
its efforts to get across these messages.
|We believe that the income threshold for repayment of student loans in England and Wales, and also in Scotland and Northern Ireland, places too great a burden on graduates' income, and that the income threshold should be raised. Fourth Report from the Education and Employment Committee, Session 2000-01, Higher Education: Access, HC 205, paragraph 71.
109. We recommend that the Government should tackle
the consequences of student poverty for retention by improving
access to financial support for less well-off students, raising
very substantially the income threshold at which graduates have
to begin repayment and addressing concerns about debt escalation.
110. 'Bearing down' on the rate of non-completion
in our universities and colleges is an essential part of the widening
participation agenda. If we are to move towards achieving the
Prime Minister's target of half of the population experiencing
higher education by the time they are 30, a fundamental change
of attitude is needed to recognise and celebrate achievement rather
than to castigate failure. We wish to see a future for higher
education as part of a national commitment to lifelong learning,
in which the door will always be open for returners to complete
a course leading to the acquisition or renewal of knowledge and
skill, and, if desired, an appropriate qualification, and in which
each individual who studies at a university or college, for however
short a time, enjoys a challenging and rewarding experience.
133 Universities UK, New Directions for Higher Education
Funding, March 2001, paragraph 4.6. Back
£1bn Science Research Investment Fund was announced in the
2000 Spending Review and the Science and Innovation White Paper:
Excellence and Opportunity, Cm 4814. The fund consists
of £675m Government funding for higher education research
infrastructure, £225m from the Welcome Trust and £100m
to modernise Research Council institutes and to contribute to
larger projects. Back
paragraph 11 above. Back
17, paragraph 4; Q. 515. Back
paragraph 10. Back
232. See Q. 472. Back
141 Ev.p.135. Back
to HEFCE, the Open University's returns to the Higher Education
Statistics Agency showed that just one student had followed the
fulltime to parttime path in 1999-2000-Ev.p.122. Back
143 Ev.p.122. Back
13, paragraph 2. Back
Committee of Inquiry into Higher Education
(The Dearing Report), 1997. Back
paragraph 2. HEFCE has published two Reports on performance indicators:
for the period 1996-97 and 1997-98 in December 1999 (HEFCE 1999/66)
and on the period 1997-98 and 1998-99 in October 2000 (HEFCE 00/40).
a discussion of HEFCE benchmarks on widening participation, see
Fourth Report from the Education and Employment Committee, Session
2000-01, Higher Education: Access, HC 205, paragraphs 21
to 26. Back
Audit Office, Improving student performance: How English further
education colleges can improve student retention and achievement,
2000, HC 276. Back
276, para 2.4. Back
276, para 21.4. Back
18, paragraph 5. Back
Q. 122. Back
205, paragraph 64. Back
350, 457-8. Back
paragraph 39 above. Back
172, 470. Back
180, 245. Back
paragraph 49 above. Back
18, paragraph 11. Back
15, paragraph 6. Back
176 Ev.p.95. Back
See Interface between Social Security Benefits and Student
Support, report from the National Union of Students, the National
Association of Student Money Advisers and the Association of Managers
of Student Services in Higher Education to the Interdepartmental
26, paragraph 3.1. Back
over the age of 25 and other students classified as independent
are assessed on their own income. Back