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De-risking the tuition fees gamble

The governments hike in tuition fees is a genuine revolution. It changes the rules of the higher education game for universities, students and the government and many of the consequences are unknowable. In particular, we don’t know how students from poor families will respond. Will many of them, as critics fear, decide not to go to university? This is one of the gambles ministers are taking and potentially the most politically toxic element of the new policy. If, come the next election, voters believe poor students are turning away from uni then tuition fees will continue to hang round Nick Cleggs neck like a burning tyre. Hence the government is moving now to defuse the electoral timebomb. This is what lies behind Cleggs media work on fees this week and the letter going today from ministers to the Office for Fair Access.

Picture 5 With the National Scholarship Fund the government is taking a concrete step to try and encourage students from poor families by reducing the cost. Clearly, for those students who win funding from the £150m a year fund, a £6,000 a year reduction in fees will be a big help. But theres only enough money for 48,000 students (roughly 16,000 in each year of intake). And on average, even taking account of the fund and everything else ministers say is great about their plans, the Institute for Fiscal Studies has concluded that students from the poorest 30 per cent of families will be worse off under the new system.

So, even with the money from the fund, an economically rational response by students from poor families would be to turn away from university. Furthermore, the whole debate about tuition fees is forcing into students minds the question of what their degree means for them financially over the rest of their working lives. And they are going to get better (though still seriously flawed) information about that. What are they going to do as it dawns on them that while an Oxbridge degree is worth hundreds of thousands to the (mainly rich) kids who go there, the degrees offered to many poor students offer no likely improvement in lifetime earnings?

These kinds of issues illustrate why Clegg cannot rely on actually succeeding in getting more students from poor families into university. So the government is taking further steps to de-risk the gamble.

Ministers are attempting to shift responsibility for the problem onto universities. This is partly rhetorical. Ministers are castigating elite universities for being bastions of privilige. But its also partly mechanistic, embedded in the guidance being sent in the letter today from Vince Cable to the Office for Fair Access. Universities are only going to be allowed to charge more than £6,000 in fees if they meet objectives for “wider participation” agreed with OFFA in (now annual) plans. Failure will be the fault of overpaid vice-chancellors, not frowning politicians.

Ministers will be hoping that the new OFFA regime will be enough to do the trick, even if the Dailys Mail and Telegraph dont like the idea of better qualified students from middle class families (and fee paying schools) being turned away in favour of council estate kids with worse grades. After all, there is a large pool still of applicants who are currently rejected by universities. Surely there is enough unmet demand from poor students to cover any dip caused by fear of the new regime?

Maybe, maybe not. Who knows what is going through the minds of 15-year olds now? But just in case the OFFA gambit doesnt work, ministers are shifting the goalposts. Paragraph 6 of the letter sent to the Higher Education Funding Council for England by Cable before Christmas to OFFA states:

“Social mobility, fair access and widening participation should be a key strategic objective and you should continue to require an annual Widening Participation Strategic Assessment (WPSA) from all institutions. This should cover not only young people from low income backgrounds but all those from groups under-represented in HE, taking into account issues facing disabled students, ethnic minorities, part-time and mature students.”

In other words, the crunch targets universities will have to meet are being blurred. Instead of a relentless focus on students from poor families, there will be a bunch of other targets that sound appealing to potential Lib Dem voters.

If necessary, this should allow universities to reach their new access targets even if they admit fewer poor students.

Like George Bush on that aircraft carrier, Clegg will be able to declare victory even if hes losing the war on the ground.


And by the way, none of this will fulfil Cables promise that universities would only be able to charge over £6,000 in “exceptional” circumstances, or explain where Simon Hughes – the governments new “Access Czar” has disappeared to – or resolve what is really the key question for both universities and the Treasury: how to ration student loans so that government debt does not go through the roof. On that, the core-margin model I floated a few weeks back [see item D at para 16 here] seems to be gaining some traction.