An in-depth analysis of the government's higher education white paper warns of a future sector polarised between a small group of elite universities and the large majority forced to lower tuition fees to less than £7,500 per year.
The paper, published by the Higher Education Policy Institute on 18 August, argues that elements of the new higher education system will drive down the prices charged by universities but at the expense of social mobility.
According to Hepi, the controls being placed on student numbers will only amplify existing disparities between institutions.
Oxford, Cambridge, Imperial and LSE are the obvious winners from the proposals, since they are the most selective and turn away candidates with AAB grades—the threshold above which no recruitment restrictions apply.
Other universities, including some Russell Group and 1994 Group members, will have no option but to drop their fees in the next few years to avoid dramatic cuts to their student numbers, Hepi claims.
This is because each university is losing a further 8 per cent of its centrally-allocated student numbers so that the government can create a pool of 20,000 floating places. Only institutions which are charging an average of less than £7,500 per year will be eligible to bid for these places to replace what they have lost.
“[These proposals] largely address the financial consequences of proposed fees higher than anticipated by the government,” says Hepi. “However, their logic is to create two sets of institutions—a new binary divide…the choices available to students will be no greater and the burden on institutions no less than now. And the cost—in terms of disruption and uncertainty for institutions and the financial cost to students and taxpayers—is likely to be considerable.”
Social mobility is threatened as students with AAB+ are concentrated in fewer universities and the most selective institutions are left with less leeway to make ‘contextual’ offers to promising students from disadvantaged backgrounds with lower grades.
Hepi also predicts that institutions that fail to ‘play the game’ could become unviable and that some universities will protect their reputations by maintaining higher headline fees but use large fee waivers to lower their average student rate.
In order to maintain student numbers, many universities will look to offer merit-based scholarships, potentially diverting resources from widening participation.
“An arms race will have been created, with no beneficiaries other than those students with AAB+ grades,” Hepi concludes.
Beside the impact on higher education, Hepi argues future taxpayers will be hit following the government’s miscalculation of the long-term default rate on the much larger loan scheme needed to meet the cost of higher fees.
The report outlines a scenario in which an annual disparity of £0.5 billion could accrue between government estimates and actual, future write-offs. This represents a problem for future generations who will have to meet any shortfall in revenues when it arises years down the line.