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					Independent review of Higher Education and
Student Finance
Higher Education Funding




16th July 2010




Opinion Leader                               1
Contents
1. Background and objectives ............................................................................................................. 3
2. Method and sample ......................................................................................................................... 4
3. Notes on reading this report........................................................................................................... 8
4. Executive Summary ........................................................................................................................ 10
5. Deciding to go to university .......................................................................................................... 18
6. Role of government, parents and graduates in financing higher education ......................... 28
7. Awareness of the key facts about graduates and the current system ................................... 32
8. Perceptions of the current system ............................................................................................... 35
9. Response to rationale for the proposals for a new system ...................................................... 40
10. Response to proposals for a new system ................................................................................. 45
11. Attitudes to debt and the financial implications of the proposals for a new system......... 60
12. Conclusions and recommendations .......................................................................................... 66


Appendices
Appendices 1-6                    recruitment questionnaires
Appendix 8                        confidentiality agreement
Appendices 9-12                   discussion guides
Appendix 13                       slide pack for full time students
Appendix 14                       part time students’ information pack




Opinion Leader                                                                                                                                2
1. Background and objectives

1.1 Background
The Independent Review of Higher Education Funding and Student Finance was launched on the 9th
November 2009. It realises the government’s commitment to review the operation of variable tuition
fees made in the Higher Education Act 2004. The review is tasked with making recommendations to
the government on the future of fees policy and financial support for full and part time
undergraduate and postgraduate students. Its Terms of Reference set out that it will analyse the
challenges and opportunities facing higher education and the implications for student finance and
support, and in doing so, examine the balance of contributions to higher education funding by
taxpayers, students, graduates and employers. The review’s first Call for Evidence sought views on
the strengths and weaknesses of the current system for higher education funding. This was followed
by a Call for Proposals to build a reformed funding system that would address the challenges of
widening participation and enhancing the quality of higher education tuition, while ensuring the
financial sustainability of the system. The information collected from the Call for Proposals was used
to develop some initial, exploratory proposals for a new system which were evaluated using
qualitative research. The research aimed to draw out reactions to the principles for reform, as well
as testing reactions to the way those principles were manifest in particular design features of the
potential new system.


1.2 Objectives
The objectives of the qualitative research were to understand:
    -   Understanding of, and attitudes towards, the relative balance of contributions between
        students/graduates and the state towards the cost of higher education
    -   Awareness and perceived importance of returns generated for individuals and society by
        participation in higher education
    -   Understanding of a potential new fee and funding regime, in terms of key concepts and
        terms, and the language used to describe it
    -   Attitudes to a new fee and funding regime, relative to the current regime
    -   Insight into the likely impact of proposals on student choice (whether to attend higher
        education, which institution to attend and which subject to study)
    -   Attitudes towards student debt, including debt aversion, in relation to expectations about
        graduate wage returns and an understanding of the nature of income-contingent student
        loan repayments
    -   Insight into the information, advice and guidance necessary to help students negotiate any
        changes to the current fee and student finance system




Opinion Leader                                                                                      3
2. Method and sample
The research approach was two-fold. The first phase involved setting up a young persons’ advisory
board, of 8 young people, to help develop the research materials. This phase was designed to ensure
that:
    -   The stimulus used to convey the key elements of the research was clear, straightforward and
        understood by young people attending the workshops
    -   The approaches and techniques used in the workshop were appropriate and stimulating for
        young people
    -   The questions/areas of concern that young people might have about the issues surrounding
        the future of higher education funding were included


The second phase, the main research phase, involved conducting a series of workshops and triad
interviews to gain an in-depth understanding of students’, potential students’ and parents’ attitudes.


The workshop and triad interview approach ensured that:
    -   Attitudes to the proposals and the wider issues surrounding higher education could be
        explored in depth
    -   Participants felt empowered within their groups to articulate careful and considered
        responses in an intimate working environment
    -   Meaningful insight was produced from a collaborative and creative dynamic where opinions
        expressed considered not only individual experiences but the shared experience of the group


2.1 Summary of the overall approach
Eight half-day workshops with 20 people in each and six triad interviews with year 12 and 13 pupils,
their parents, first year undergraduate higher education students, and prospective part time
undergraduate students were conducted in four locations across England. The locations – Bristol,
London, Newcastle and Nottingham – were disparate to ensure a good geographical spread. A
diagram of the research approach can be seen below.




Opinion Leader                                                                                       4
Schematic of overall approach
                                 Set-up workshop

     Phase        Young Persons’ Advisory Group
         1          Gap analysis of key research questions and 4 first
                                 young people (4 in on key
                    Comprising 8 approach focussed year 13questions
                    Gap-analysis
                    year HE students)

  Output : The advisory group helped develop the stimulus materials to be
           used in the workshops. They also inputted into the design of
           the workshops and ensured that the issues which young people
           themselves believed to be important were included


     Phase        Workshops & depth interviews
         2           4 x workshops with year 12-13s
                     2 x workshops with parents of 12-13s
                     2 x workshops with HE students in year 1
                                                                -


                     6 x triad interviews with potential part time students

  Output: An in-depth understanding of the views of key groups regarding the
                                                  “
          key issues that surround the funding proposals, as well as other important
                                            ”
              issues relating to HE funding, both from an individual and a citizen perspective.
              Recommendations on how to best communicate with prospective students
              about changes in the current fee and finance system

2.2 Sample
The workshops and triad interviews were broken down as follows:
     -   4 x workshops with pupils in year 12 & 13
     -   2 x workshops with parents of year 12 & 13 pupils
     -   2 x workshops with HE students in year 1
     -   6 x triad interviews with potential part time students
The workshops had the following structure:
 Workshop        Participant group          SEG               Gender                Region
 1               Year 12 & 13 pupils        C2DE              Male                  Newcastle

 2               Year 12 & 13 pupils        BC1               Female                London

 3               Year 12 & 13 pupils        BC1               Male                  Nottingham

 4               Year 12 & 13 pupils        C2DE              Female                Bristol

 5               Year 1 HE students         BC1               Male and Female       London

 6               Year 1 HE students         C2DE              Male and Female       Nottingham

 7               Parents of year 12 & 13s   BC1               Male and Female       Newcastle

 8               Parents of year 12 & 13s   C2DE              Male and Female       Bristol

Opinion Leader                                                                                    5
The workshops had the following additional recruitment criteria:
     -   At least 12 BME participants across the sample, spread over different categories
     -   50% of prospective students should be ‘certain’ to go to HE, with the other 50% ‘likely’ to go
         to HE
     -   At least half of students to be considering (prospective students) or attending (year 1
         students) HE institutions away from home
     -   Across the sample, the participants should be studying or intending to study a broad range of
         subjects
     -   Parents all had children in year 12-13 (50% in year 12, 50% in year 13) of which 50% were
         ‘certain’ and 50% were ‘likely’ to go to HE. Half of their children were considering universities
         away from home. Half of their children were male and half female


The triads had the following structure:
     -   2 x considering either an academic or vocational course
     -   2 x considering doing a degree but finance is a barrier
     -   2 x working and considering a degree to develop their career


 Triad    Participant group                                          SEG     Gender      Region
 1        Considering either an academic or vocational course        BC1     Male        Nottingham

 2        Considering doing a degree but finance is a barrier        C2DE    Female      Nottingham

 3        Working and considering a degree to develop their          BC1     Female      London
          career

 4        Considering either an academic or vocational course        C2DE    Male        London

 5        Considering doing a degree but finance is a barrier        BC1     Male        Newcastle

 6        Working and considering a degree to develop their          C2DE    Female      Newcastle
          career


The triads had the following additional recruitment criteria:
     -   Include a wide range of ages
     -   All to be considering HE in the next academic year
     -   Range of types of course
     -   50% male, 50% female
     -   50% BC1, 50% C2DE


2.3 Format of the workshop and triad sessions
Throughout the workshops and triads, participants were presented with information about a number
of issues relating to the future funding of higher education, including facts about the current and

Opinion Leader                                                                                          6
potential new system and benefits of being a graduate. The format involved giving participants
information, evaluating their understanding of, and attitudes towards the information, and then
evaluating their broader attitudes towards the proposals in light of the information provided. The
materials shown to participants and the discussion guide can be found in appendices 9-14.
Information given to participants came from a number of sources.




Opinion Leader                                                                                  7
3. Notes on reading this report
Qualitative and deliberative research reporting
The findings in this research are based on a qualitative sample which is large enough to provide in-
depth indicative findings. However, the findings are not statistically robust and should not be treated
as such. Differences in demographics have been highlighted in this report; however, this is based on
small qualitative sub-samples and should be treated as indicative rather than definitive. As a
qualitative piece of research the terms ‘many’, ‘some’ and ‘a few’ have been used throughout to give
an indication of the strength of opinion about the issues discussed in the research. We have
presented the findings of one of the exercises undertaken (a quiz examining knowledge about the
current system and some facts about graduates) in a more quantitative way, which is possible due to
each participant’s completion of a questionnaire.


This research was deliberative in nature, with participants being asked for their initial reactions to
the issues before being given additional information about the topics discussed. This report has been
structured in an order which mirrors the order of the research sessions to show the development of
participants’ perceptions and any shifts in opinion during the course of the sessions, including the
effect of receiving additional information. As such there are aspects of the report which may appear
to be repetitive, which is indicative of the lack of shift in perceptions.


How we refer to participant segments
Full time students have been referred to as ‘students’ in the report and these include prospective
higher education students (pupils in years 12 and 13) and 1st year HE students. Parents of pupils in
years 12 and 13 have been referred to as ‘parents’ and prospective part time students referred to as
‘part time students’.     Potential part time students were recruited according to 3 segments
(considering either an academic or vocational course, considering doing a degree but finance is a
barrier and working and considering a degree to develop their career). There are, however, instances
where there is a degree of overlap between some of the views expressed by participants in different
segments.


Points to note about participants’ responses
–   Participants responded both in terms of how proposals may impact on them personally and how
    they might impact on students/graduates more generally (and whether they think this fair).
    -   For example, those in lower socio-economic groups were critical of the household income
        threshold where students no longer qualify for grants, despite this being well outside their
        own income levels.
–   Participants did not always draw out or realise the possible consequences or conclusions of their
    points of view.
    -   For example, they may have thought that government should contribute more than
        individuals to the cost of higher education funding, but do not necessarily consider or realise
        that this would mean an increase in government spending, which would have to be funded
        by the taxpayer or result in spending cuts elsewhere.
Opinion Leader                                                                                       8
–   Although they may have stated a preference between various options, this does not mean that
    participants’ favoured option is necessarily liked in absolute terms (it could be that they consider
    it the ‘least unpalatable’ option). There was also some disconnect between participants
    favouring the high level principle for changing the way that higher education is funded and
    agreeing with how this principle plays out in practice.
    -   For example, many said that increasing private contributions was the best option for
        changing how the higher education system is funded, however they did not necessarily
        favour this option outright (they might hope that funding the system remains the same) and
        they may have been critical of the proposals for putting this principle into practice.
–   Participants discussed how they thought the system should be changed but did not necessarily
    think or realise that these changes might impact them personally.
    -   For example, they may have said that in order to make savings there should be fewer
        graduates, but they may not have considered that this might impact on them and prevent
        them or their children from gaining a university place.
–   Students were not always fully aware of their household income and so not fully aware of how
    proposals may have impacted them.
    -   For example, they may have thought that they would be eligible for a maintenance grant
        when they were not, or vice versa.
–   Participants did not always draw distinctions between maintenance and tuition costs when
    discussing higher education funding. Whilst many understood the difference, and at times
    discussed both aspects spontaneously, they often thought in broader terms about the total cost
    of higher education funding.
    -   For example, when discussing individual versus government contributions to higher
        education funding, most did not discuss distinctions in terms of funding maintenance versus
        tuition.
–   Some participants had certain assumptions that were difficult to overcome even after being
    presented with information demonstrating the contrary.
    -   For example, when presented with a case study scenario involving a possible increase in
        tuition fees, although it was made clear that the cost of this would be covered by a loan and
        that an increase in overall graduate debt would be offset by an increase in non-repayable
        maintenance support, some participants believed that this would made university more
        expensive and less accessible.


It is because of all of the above that there may be apparent inconsistencies or contradictions in the
research findings. This may also contribute to the fact that there are relatively few differences
between the participants (e.g. across socio-economic groups), perhaps less than might be expected
given the financial implications of the proposals. Any differences have been drawn out throughout
the report and highlighted in a dedicated section within the conclusions.




Opinion Leader                                                                                        9
4. Executive Summary

Deciding to go to university
Participants cited numerous benefits of going to university, which were consistent across socio-
economic groups. These focussed on self-development (including increasing self-reliance and
resilience), academic advancement, social development and long-term financial benefit. For some,
going to university was seen as a way to keep their options open, putting off choosing a career or
having to get a job in a difficult job market. For part time students, a core benefit was improving job
prospects, including career advancement.


Participants cited fewer drawbacks than benefits of going to university. Drawbacks were primarily
financial, with debt being the most significant concern for students and parents across socio-
economic groups. For full time students and their parents, graduate debt and a lack of money at
university were the most significant concerns. There was also concern amongst these groups about
poor post-graduation job prospects due to the current economic climate. Some participants also
blamed poor graduate job prospects on a burgeoning number of graduates. The financial burden of
paying tuition fees up-front was the most significant concern for part time students, whilst their
circumstances meant that maintenance was less of an issue.


For most, the benefits of going to university were thought to outweigh the drawbacks. This was
primarily because of the belief that a degree leads to higher lifetime earnings, which ultimately
outweigh the debt incurred. However, when examining at which point drawbacks may outweigh
benefits, for most it was if maintenance costs were to become prohibitively expensive or if debt
upon graduation was perceived to be too great.


Sources of information used by full time students and parents in the decision to go to university,
particularly in relation to funding, were broad and included siblings, friends, school, university
information packs and websites. Some called for a central source of information about student
finance, ideally with an entitlements calculator. Many part time students were currently unaware of
the financial support available and consequently had not sought information about this.


Role of government, parents and graduates in financing HE
Most full time students and parents believed that the cost of providing higher education should be
shared amongst government, graduates and parents. Most full time students and parents believed
that graduates should financially contribute because they will personally benefit from higher lifetime
earnings and better job prospects. Some believed that making a personal contribution would
demonstrate a commitment to studying and ensure that students take the decision to go on to
higher education seriously. Some also believed that it was unfair or inappropriate that government
should subsidise a student’s lifestyle choices (particularly if this involves stereotypical student
behaviour with lots of social activity).
Opinion Leader                                                                                      10
Some parents believed that they had a responsibility to help their child with their future study
and/or career choices, and also to help support them whilst at university. However, the extent to
which parents felt able to financially support their children varied, particularly by socio-economic
group, with parents from lower socio-economic groups feeling less able to provide financial support.


Most participants believed that the government contribution to the costs of tuition and support for
students is important for a number of reasons: there was the perception that the government
benefits from higher taxes from graduates throughout their lifetime and a more skilled workforce
able to generate wealth and deliver better public services. Some students and parents believed that
government contributions to higher education are important in making it accessible to students from
a wide range of different backgrounds, and avoiding a system based on the ability to pay. When
completing a ‘pie chart’ exercise, marking relative proportions that the government vs. graduates
should pay towards higher education, most full time students and parents believed that the
government should pay at least half the cost of higher education.1 This is because the personal
benefits of higher education were seen by many to match the benefits to society.


After receiving information about benefits to graduates of higher education, most participants did
not change their minds about the proportions that government vs. graduates should pay. However
some of the students did make changes, suggesting that students should contribute more, in light of
the information about graduates earning more money and being more employable in the long term.


In order to understand participants’ levels of understanding of the key aspects of the current higher
education funding system and some of the financial benefits to graduates, participants completed a
quiz exercise and were presented with additional information. Many full time students and parents
were aware that, in general, graduates earned more than non-graduates and that there were
differences in projected earnings according to the course studied and university attended. Part time
students were less aware of the financial benefits of being a graduate and differences in average
graduate salaries. Full time students and parents had a good understanding about the different ways
in which the government supports students. However they had low levels of knowledge about the
fact that the government subsidises tuition costs and that England has a more generous support
package for students than some other countries. Most were unaware that the value of a degree had
remained unchanged over the past 15 years.




1
    It is important to note that this exercise did not focus on actual amounts of money, rather on the principle of the burden of funding.
Opinion Leader                                                                                                                               11
Understanding of, and attitudes toward, the current funding and student
finance system
Most full time students and parents believed the current system to be fair, since it is free at the
point of use, loans and grants are available for tuition fees and maintenance, and the repayment
terms were perceived to be affordable. There is some surprise across the groups that the
government subsidises the loan rate, as well as surprise that the government pays off the loan after
25 years (and a feeling amongst some that this is not appropriate as the government should continue
to try and retrieve this money). A few from lower socio-economic groups thought it was unfair that
students were currently expected to pay tuition fees, primarily because tuition had been free in the
past.


Conversely, part time students believed that the current system is unfair towards part time
students since they are not afforded the same access to preferential loans and grants as full time
students. Some part time students believed that the current system fails to account for the diversity
of part time students’ circumstances. They thought the current system assumes that part time
students have greater access to funds than full time students and they point to family, work and
other financial commitments that full time students may not have.


Attitudes to the case for reform of the current system
Students, part time students and parents recognised the current financial challenges faced by the
government and many believed it was reasonable to expect funding for education to be cut as well
as for other public services. However, education was regarded as a high priority for the country,
particularly in terms of ensuring its economic recovery. It is because of this that a few parents
believed no cuts should be made in higher education spending; current funding levels should be
protected.


When presented with a trade-off between achieving savings in the higher education system by
reducing participation, cutting the unit of funding per students, or increasing private contributions,
most believed that the system should be financed by increasing private contributions and there
was overall agreement amongst participants that, in principle, those households who could afford to
pay more should do so. However, some students and parents, particularly in higher socio-economic
groups, believed that the government should reduce the numbers of people attending university
rather than seeking greater private contributions. They believed that this would increase the value of
degrees and improve graduate job prospects.




Opinion Leader                                                                                     12
Attitudes to proposals for a new system
Participants were presented with an outline of potential changes to the HE funding system. It was
explained that these potential changes would not necessarily be taken forward, but were presented
to evaluate their reactions to the principles for reform and potential ways to embed those principles
in a new funding system.


Although participants had previously indicated that the most palatable option for financing higher
education would be by increasing private contributions, when presented with the details of the
proposals for a possible new system, they found them unappealing overall. The concerns with the
proposals focused on: the perceived low level of the income threshold for not receiving maintenance
support (£60,000) which was considered too low to render higher education affordable, the
suggestion that maintenance loans might be abolished, and both that the fee cap might rise, and that
this might result in variable fees.


In terms of the proposals for potential changes to maintenance costs, there was general support for
greater maintenance grants for those on lower incomes. However, the abolition of loans is seen as
the most problematic aspect of the proposals for a new system. Many students and parents believed
that any potential shift in responsibility from the student to the parent to cover maintenance costs
would be unfair (although many current students admitted that their parents did already provide ad
hoc financial support, and prospective students expected this to happen, generally they resisted the
idea that this parental support should be formalised). Some students said they would feel guilty
having this expectation of their parents, and some suggested that any such shift would erode their
independence, particularly if it meant they would have to live at home, having insufficient funds to
live away. There was concern by participants across the workshops that some parents might not be
able or willing to pay. In such instances, they suggested that there should be additional hardship
support for students. Students and parents across socio-economic groups thought it would be unfair
to expect those who earn over £60,000 per year to cover their child’s maintenance costs in their
entirety. Some (across socio-economic groups) thought that this threshold was not sufficiently high,
others called for a broader range of factors to be taken into account when deciding on parents’
ability to pay, such as the number of children likely to go on to higher education.


Students and parents also expressed concern about the proposal to encourage greater variability in
fee setting by raising the fee cap. Some (across socio-economic groups) commented that variable
fees might create or reinforce a two-tier higher education system, where the differences between
what they considered to be the ‘best’ courses/universities and ‘worst’ courses/universities would be
reinforced through different pricing (the best being the most expensive). Some participants were
concerned that, despite being offered loans to cover the full cost of fees, more expensive courses
would not be accessible for those on lower incomes. Those from lower socio-economic groups were
more debt averse and concerned that the tuition fee premium of a more expensive course was not
necessarily worth the associated debt, despite the possibility of higher wage returns. A few from
lower socio-economic groups commented that even if they were willing to pay for more expensive
Opinion Leader                                                                                    13
courses, they would feel that courses charging higher fees would not be for ‘people like them’ and
would be more likely to attract wealthier students. Participants did not necessarily trust universities
to set variable fees, assuming that all universities might automatically charge the maximum amount
permitted. Participants wanted reassurance that there would be some kind of external, independent
regulation of fee setting.


In terms of any increase in fee levels, some thought that £6,0002 would be too high a cost to pay for
tuition, on the basis that this was seen as being double the current level. It is important to note that
before receiving information about how tuition costs were funded (partly through tuition fees and
partly through government subsidy) there was a widely held belief that current tuition fees cover the
entire cost of tuition. However, the proposal that loans would be available to cover the full cost of
tuition fees, made the figure acceptable for some, supported by the repayment terms which were
perceived to be fair. The proposal to increase the amount of interest on student loans to cover the
government’s cost of borrowing was not met with concern in the main, as this would not affect
monthly repayment amounts (only the duration of repayment), and a few commented that it would
be appropriate to introduce this higher rate to prevent the government from losing money. It was
suggested that certain criteria would make higher fees more acceptable, including transparency in
how course costs would be calculated, indications of higher standards of tuition and better facilities
and indications of subsequently improved job prospects and improved earning potential.


Part time students, on the other hand, believed that the proposals for a new system would be fairer
than the current system, since it would offer parity with full time students. They felt that introducing
greater support for part time study through access to a fee loan would be a way to acknowledge
their value, in a way in which the system is not currently felt to do. They believed that the new
proposals would be likely to increase the access and opportunities for people to study part time.
They also suggested that part time students would no longer be prohibited by up-front costs and
therefore would be more able to take up part time study with less personal financial risk. However,
there was some concern about a potential rise in tuition fees and a feeling that higher overall cost
along with higher interest rates could deter some prospective students (a few said this would deter
them, whilst others were concerned for other people more broadly).


Likely (reported) impact of the proposals for a new system on university
choices
Most believed that the proposals for a new system would have an impact on university choices.
However very few students said that it would prevent them from attending university; those who did
think it would prevent them were those who did not want to ask their parents for additional support
(across the socio-economic groups) and some felt that their parents might not be able to afford to
pay the maintenance costs (across the socio-economic groups). We suggest that this reaction can be
attributed partly to participants not being fully aware of how much their parents earned and

2
    The amount of £6,000 was presented as the level at which fees would be capped
Opinion Leader                                                                                       14
therefore thinking that they might not be entitled to sufficient maintenance costs. The main impact
was thought to be increased scrutiny in the course and university chosen to ensure that they were
making the best choice. They said they would give greater consideration to the choice of course (due
to variable fees) and the location of the university (due to the impact of maintenance costs). Some
students and parents from lower socio-economic groups said that they would opt for a less
expensive course as a result of variable fees despite the offer of a loan for the full tuition fee amount
(however, some were prepared to pay for more expensive courses to get a better degree).


The impact of the proposals for potential changes to maintenance support was perceived by full
time students and their parents to be an increase in the proportion of students attending a local
university and staying at home. There was some concern that this would lead to some students
choosing an inferior course since their choice would be limited to universities within commuting
distance. Some participants thought that this choice of an inferior course could be reinforced if the
introduction of variable fees acts to highlight what they considered to be the ‘best and worst’
courses and ‘best and worst’ universities. Some full time students said that they would need to use
other sources of income to pay towards maintenance costs, for example, a few mentioned taking a
gap year to work and save.


Most full time students and parents said that the potential changes to tuition fees would not deter
them/their child from going to university. This was primarily because students would receive a loan
for the full amount. Variability in fees would mean that the choice of course would be scrutinised
further. Firstly, students would need to assess their preparedness to pay, and some participants from
lower socio-economic groups and some participants from higher socio-economic groups suggested
that those in lower socio-economic groups were more likely to opt for less expensive courses.
Secondly, if courses were more expensive, students would need to assess whether this cost was
justified in terms of improved job prospects.


Some part time students thought they would be more likely to go university if they had to access to
tuition loans to defer the payment of tuition costs, whilst others might be put off by any increase in
fees.


Attitudes to debt and the financial implications of the proposals for a new
system
Participants’ attitudes to debt and levels of debt aversion play a major role in their reactions to the
new system and so were examined in-depth. Findings show that students were less debt averse
than parents and they expressed less concern about paying back graduate debt after university. This
is something they had largely come to terms with in making their decision to go to university. The
potential increase in the duration of debt repayment (due to the slightly higher interest rate) under
the proposals for a new system was not particularly concerning for most students, as the repayment
terms were thought to be fair and not particularly onerous.


Opinion Leader                                                                                        15
However, when given the option, most students would prefer to receive access to a higher
maintenance loan rather than a grant at a lower level (i.e. more cash in hand now) to help ensure
they had sufficient funds to pay for their cost of living expenses at university. Concern about finances
whilst at university was more acute than levels of debt in the main for most students and parents.


Part time students welcomed access to loans to defer the costs of their tuition fees. All part time
students suggested they would prefer a grant but recognised that this would be unlikely to be
affordable for the government, especially in the current economic climate. As such, assistance with
the cost of tuition fees was their primary concern. They said that they would rather have a
government loan, with a low rate of interest, than rely on other sources of income. They believed
that there was a place for employers to contribute and that they should be encouraged to do so.
However, there was recognition that employers, especially small businesses, may not be in the
financial position to do so.


Information requirements
For full time students, a key information requirement posed by the proposals for a new system was
around choice of course so that they could feel they were making an informed decision. This would
include information on contact hours, quality of tuition, quality of facilities, resulting job prospects
and earning potential. They also wanted a clear and easy way of working out the personal financial
implications of the proposals for a new system for their particular circumstances, including an
entitlements calculator. Parents wanted this information too and called for information to be
disseminated in a more systematic way than it is currently.


Part time students, whose knowledge of the current system was much patchier than their full time
counterparts, wanted comprehensive and consistent information from a clear, central source. They
suggested that this should include information on the benefits of getting a degree.




Participant recommendations for changes to the system
Suggestions made by many participants
-   Grant allocation based on ability to pay: means testing system for establishing the amount of
    maintenance grant received by students. It should take into account more than household
    income, to include factors such as the number of children, disposable income etc.
-   An independent body to regulate variable fees: to prevent universities setting their own fees
    and to demonstrate that courses offer value for money
-   Subsidies for courses in the national interest: e.g. medicine and sciences, should receive
    additional support from the government, for example, through government subsidy of courses
    and/or students (participants were not aware that this happens under the current system). They
    also believed this despite the fact that students studying some of these courses would receive
    higher wage returns.

Opinion Leader                                                                                       16
Suggestions made by a few participants
-   Universal maintenance loans preferred to targeted, non-repayable grant support: maintenance
    loans would reduce the onus on (middle and higher income) parents to contribute towards
    maintenance costs and enable those whose parents were unable to afford to contribute to
    maintenance costs to attend a university away from home
-   Student contracts: setting out what students can expect from a course and options for redress if
    the course fails to deliver these




Opinion Leader                                                                                   17
5. Deciding to go to university

5.1 Summary
Participants cited numerous benefits of going to university, which were consistent across socio-
economic groups. These focussed on self development (including increasing self-reliance and
resilience), academic advancement, social development and long-term financial benefit. For some,
going to university was seen as a way to keep their options open, putting off choosing a career or
having to get a job in a difficult job market. For part time students, a core benefit was improving job
prospects, including career advancement.


Participants cited fewer drawbacks than benefits of going to university. Drawbacks were primarily
financial, with debt being the most significant concern for students and parents across socio-
economic groups. For full time students, and their parents, graduate debt and a lack of money at
university were the most significant concerns. There was also concern amongst these groups about
poor post-graduation job prospects due to the current economic climate. Some participants also
blamed poor graduate job prospects on a burgeoning number of graduates. The financial burden of
paying tuition fees up-front was the most significant concern for part time students as their
circumstances made maintenance less of an issue.


For most, the benefits of going to university were thought to outweigh the drawbacks. This was
primarily because of the belief that a degree leads to higher lifetime earnings, which ultimately
outweighs the debt incurred. However, when examining at which point drawbacks might outweigh
benefits, for most it was if maintenance costs were to become prohibitively expensive or if debt was
perceived to be too great upon graduation.


Sources of information used by full time students and parents in the decision to go to university,
particularly in relation to funding, were broad and included siblings, friends, school, university
information packs and websites. Some called for a central source of information about student
finance, ideally with an entitlements calculator. Many part time students were currently unaware of
the financial support available and consequently had not sought information about this.




5.2 Benefits of going to university

At this stage in the discussions (workshops and triad interviews), participants were asked their
spontaneous opinions about the benefits and drawbacks of going to university and the tipping points
which would result in university becoming a less attractive option. Participants were not shown any
information at this point.


Participants cited numerous benefits of going to university, which are outlined below.
Opinion Leader                                                                                      18
Financial benefits
Overall, the long-term financial benefits of going to university were considered to be one of the most
compelling reasons by both students and parents. For some students across a range of socio-
economic groups, the financial benefits were, in fact, the main reason for going to university.
Students and parents expected that graduates would be in a better position than non-graduates to
get a well paid job.


        "When I leave I want the qualifications that would help me get a highly paid job and
        a job that I’d enjoy."
                                                          Year 12 - 13 male student, Nottingham, BC1


Getting a good job
Many students believed that getting a university degree would allow them to get a ‘good job’ which
was a combination of having a job they enjoy and which gave them job satisfaction, more prestige
and typically, higher remuneration than a job which did not require a degree.


Self-development
Self-development was perceived by many students and parents to be an important outcome from
attending university. A number of aspects of university study were cited as contributing to self-
development. These included becoming independent, developing self-confidence, becoming more
open-minded, being exposed to new people and ideas and improving communication skills. Some
thought that living away from home was an important aspect in enabling young people to develop,
since they became more self-reliant and resilient and needed to develop skills such as budgeting,
cooking, cleaning, etc. and developed new social networks.


        “Cope in different situations and when you meet new people going out with them
        and things like that.”
                                                                 Year 13 female student, Bristol, C2DE


        “What I have seen in mine when they’re older instead of leaving after 6th form
        they've got a little bit more maturity before they go out into the world.”
                                                        Parent of year 12 - 13 student, Newcastle, BC1



Social benefits
The social benefits were perceived to be linked with self-development in terms of coping in new
situations, being exposed to new people who had had different experiences and ideas and
consequently improving social skills.



Opinion Leader                                                                                     19
Students believed that the social aspects of going to university were important, however, this was
not top of mind for parents. Year 12 & 13 students looked forward to meeting new people and
making new friends. Moreover, year 1 higher education (HE) students said that this was one of the
most enjoyable aspects of going to university. Year 12 & 13 students also looked forward to the extra
curricular activities such as socialising e.g. going to pubs, bars and parties and sports.



        “Making friends and having fun.”
                                                                Year 13 male student, Nottingham, BC1


Academic benefits
For a few students in each workshop, the pure academic pursuit of their chosen subject was the key
driver for going to university. Some were primarily interested in finding out more about their chosen
subject area and a few wanted to become academics.


        “I just think furthering your own knowledge, like that satisfaction where you think
        ‘yeah I learned all of this by myself’.”
                                                                   Year 13 female student, London, BC1


Keeping options open
Some students did not know what they wanted to do in their life or which career they wanted to
pursue and thought that going to university was likely to give them more opportunities once they
had decided on their future plans. Others were concerned about the lack of job opportunities in the
current economic climate and believed that going to university was a better option than trying to get
a job. A few were going to university to put off getting a job and mentioned other friends who were
doing this too.


        “It is something to do while I make up my mind what I want to do."
                                                             Year 1 HE male student, Nottingham, C2DE


Benefits of going to university for part time students
Most part time students thought the main benefits of going to university were to further personal or
career-orientated goals. For those considering either an academic or vocational course and those
who are working and considering a degree to develop their career, the main benefit was to get a
better job; one which had more responsibility, was more interesting and was better paid. The global
recession and the rise in graduates entering the job market were given as reasons why part time
students felt compelled to obtain qualifications. Further study, in their view, would increase their
professional credibility, help to secure their jobs in the long-term and lead to job progression.




Opinion Leader                                                                                      20
        "[Climbing] a series of mountains which I felt represented the journey that I've been
        on. Yes, I feel like it's a mountain and I haven’t reached the peak and it's like I've
        been climbing for a long time."
Part time female student, working and considering a degree to develop their career, London, BC1


        "At the moment I'm working in the office doing administration. I get to see the other
        side of everything they do and that has really inspired me to be a part of that and so
        I can see quite a direct opportunity there in the place that I work, but I wouldn’t be
        able to progress in the field that I want to without a degree. I would need it to be
        able to go further."
Part time female student, working and considering a degree to develop their career, London, BC1


5.3 Drawbacks of going to university
Participants cited fewer drawbacks than benefits of going to university. The most fundamental
drawbacks were financial, with debt being the prominent concern for students and parents. The cost
of living expenses was identified as significant, which was of concern to students and parents, with
tuition costs being perceived as less significant. Students (especially those in year 1 HE) expressed
concern about having a lack of money at university. There were some drawbacks relating to studying
such as exam stress and concerns about the difficulty of completing the course. Other drawbacks
related to living independently such as being homesick, having a poor diet, washing clothes etc.


Some year 12 & 13 students and parents of year 12 & 13 students were concerned that they might
not get a job or get a poorly paid job after going to university. This was partly due to the
unfavourable current economic climate which they feared would result in a lower demand for
graduates. Some also believed that there were too many graduates currently which had caused a
devaluation of degrees. Students gave examples of people they knew who had graduated and were
in poorly paid jobs e.g. stacking shelves.


Some students thought that some students were unlikely to benefit from attending university, either
because they were doing a degree which they felt had little value, or because the individual was not
taking the course seriously.


Debt after graduation
Anxiety about debt levels after leaving university was the most concerning drawback for students
and parents. Some parents were concerned that if their children did not get a good degree, they
would still have high levels of debt which they would be less able to pay off than if they were able to
get a well-paid job after graduation.


        “Like a big pile at the end of it that you have to pay back.”
                                                                  Year 12 female student, Bristol, C2DE


Opinion Leader                                                                                      21
           “Its going to take you a whole while to pay it back you won’t be able to do it straight
           away.”
                                                            Year 12 - 13 male student, Nottingham, C2DE


Cost of living expenses/Lack of money at university
Lack of money was a bigger drawback for year 1 HE students than year 12 & 13 students and parents.
Some year 1 HE students were currently experiencing a lack of money to pay living expenses,
particularly those studying at universities in London. Some had taken part time jobs to pay towards
these expenses. Some parents and students suggested that they/their child would need to take a
part time job in the future in order to supplement their income. However, they commented that
there was a lack of part time jobs and that they would not want to work if this might impact on their
studies.


Students and parents expressed particular concern over their ability to pay for accommodation and
other living expenses for those living away from home. Some year 1 HE students in London said that
they had spent their maintenance loans too quickly which made it difficult for them to finance the
cost of their living expenses towards the end of each term. Despite these concerns, it is worth noting
that participants did not say that they were unhappy about the current levels of maintenance
support either at this point or during the more detailed discussion about the current system (sections
6 and 7).



           “Well, depending where they go but it is mainly the living cost when they are away,
           going away from home.”
                                                             Parent of year 12 – 13 student, Bristol, C2DE
Cost of tuition fees
The cost of tuition fees was mentioned by a few students and parents from lower socio-economic
backgrounds as a concern. However, it was perceived as being less of a concern than the cost of
living expenses. This was partly because the cost of tuition fees is deferred to after graduation, while
the cost of living expenses impacts directly on cash-in-hand to finance a student’s standard of living
while at university. Some participants also noted the headline sums involved to point out that the
annual cost of tuition fees were lower than the annual cost of living expenses.


Drawbacks of going to university for part time students
For part time students, financial considerations were the overriding factor when deciding which
mode of study (whether full or part time) and when to study. For those considering doing a degree
but finance is a barrier, the cost of full time study was considered prohibitive due to loss of earnings
and their existing financial outgoings.




Opinion Leader                                                                                         22
        "…the financial side has got to be a big drawback, even though hopefully you’d
        benefit afterwards. At the time it's really expensive to study, so it's not making it easy
        for you to take that path."
Part time female student, working and considering a degree to develop their career, London, BC1


Those considering either an academic or vocational course reported that they were considering part
time study because they could not afford the loss of earnings associated with studying full time.
While they acknowledged that they would nevertheless have to make some financial sacrifices in the
short term to enable them to study, they hoped that their investment would be recuperated in the
future through higher earnings. Those who were working and considering a degree to develop their
career also considered finance an important factor in their decision to study part time. They
highlighted the importance of continuing work to ensure they could meet their financial obligations
and commitments. These part time students also felt apprehensive about studying and changing
career after being in varying periods of employment in their lives, but they felt that the benefits
outweighed the risks.


All types of part time students highlighted up-front tuition costs as one of their main concerns when
assessing whether, where and what to study. Those considering either an academic or vocational
course were most worried about the potential loss of earnings from having to take time off work, but
were also worried about the cost of living expenses and travel. For those who were considering doing
a degree but finance is a barrier the potential erosion of job security, which part time study might
bring, was their biggest concern. They were worried that, at a time when “jobs are too few and far
between”, it was important not to jeopardise their job security by letting their productiveness fall as
a result of taking on further study; for instance, due to being tired at work and turning up late. Those
who were working and considering a degree to develop their career were worried about the unseen
and unknown costs of further study especially travel costs.


        "*I’m worried about+ taking time off and being able to support the family, even
        though my course is just under £1,000, it’s a bit hard to find £1,000."
Part time male student, considering either an academic or vocational course, London, C2DE


Most part time students thought that the difficulty of financing their studies would impact on the
intensity at which they could study. Those who were considering a degree but finance is a barrier,
thought that their need to continue full time work would increase the length of time needed to
complete their degree. Those who were working and considering a degree to develop their career
also hoped that studying for longer, at a lower intensity would help to reduce the cost of study.
Those considering either an academic or vocational course suggested that they would study full time
they could, and if they had access to funding it would increase the time they could spend studying.




Opinion Leader                                                                                        23
5.4 Tipping points which make university choice less likely

Benefits vs. drawbacks
For most students and parents, the benefits of going to university outweighed the drawbacks. The
main reason for this was the perception that gaining a university degree would result in graduates
being able to get a better paid job than non-graduates, and the prospect of higher lifetime earnings
was perceived to considerably outweigh the debt incurred. Some participants across the socio-
economic spectrum mentioned other reasons why they thought that the benefits outweighed the
drawbacks, such as a degree enabling people to get a job, or a good job, and becoming more
independent. The current arrangements for paying back loans (i.e. over a long time, the £15,000
salary threshold and low repayment amounts) were perceived to limit the impact of graduate debt
on students.



          “In the long run you get more back, a lot more salary than you would get in a
          normal job.”
                                                              Parents of year 12 – 13 student, Bristol, C2DE


A few participants believed that the decision to go to university was dependent on a number of
factors such as the ability to get a well paid job, the quality of the degree course and the class of
degree.


          “I feel like if I go to a crap university then it’s not worth going.”
                                                                       Year 13 female student, London, BC1


Benefits versus drawbacks for part time students
Most part time students believed that the benefits of pursuing higher education outweighed the
drawbacks because they thought it would help them achieve their goals of earning more money or
changing their job. One participant who was working and considering a degree to develop their
career described the sense of fulfilment achieved through study.


          "Even the experience of having done it, you felt a sense of fulfilment that you
          haven't before and even if you did nothing with it you thought “Well I achieved
          that” and if you enjoyed the course it is worth it."
Part time female student, working and considering a degree to develop their career, London, BC1


Those considering doing a degree but finance is a barrier expressed mixed views about the balance
of benefits and drawbacks. Some believed there was a trade-off between the debt accrued through
studying and the potential opportunities to be gained from further study.



Opinion Leader                                                                                           24
They highlighted both the financial and time cost of higher education. Some had existing debt which
made it difficult for them to finance their study. The high upfront cost of courses was a key tipping
point for them. Those considering either an academic or vocational course emphasised the time cost
involved in part time study. These part time students often worked long hours and many had
children, which placed an additional demand on their time. The time pressure of part time study was
a key tipping point for these students, who were reluctant to give up important family time.


Tipping points which impact on university choice
Participants were asked about what circumstances might make them decide that the drawbacks
outweighed the advantages of going to university. This was a spontaneous discussion and
participants were not prompted with specific scenarios. The most common reasons given were
financial, either not being able to afford to pay for maintenance costs or concerns about escalating
levels of debt on graduation. There are no trends relating to socio-economic groups in terms of
tipping points. Some parents and students said that if maintenance costs became too high, they/their
child would have to live at home and attend a local university. A few year 1 HE students said that if
they were no longer able to afford their living expenses, they would give up their course and try to
enter the job market. Some year 12 and year 13 students said that they would work during a gap
year(s) to help finance their university education. Some students (particularly year 13 students)
found it difficult to imagine a situation where they would not go to university (except not getting the
required grades) because they had already made the decision to go to university.


The tipping points for part time students
For all part time students, if the cost of studying became more expensive, they think it would
probably put them off studying or at least made them rethink their options.


Those working and considering a degree to develop their career emphasised the potential burden
higher education study would place on their existing commitments, such as current employment,
paying bills, the mortgage, and the costs associated with children. It was the extra financial burden
that part time study would bring that was likely to provide the tipping point for these students.


5.5 Current sources of financial support
Most students in year 12 had not considered in detail how their university study would be financed.
On reflection, however, some believed that they would help to finance their university education by
doing a part time job, with minimal help from their parents. Year 1 HE students were using a range of
sources of income, including parental support, student loans, overdrafts and part time jobs. Those
from C2DE households were more likely to have a part time job. The vast majority of year 1 HE
students were using student loans to help with the cost of living expenses with the exception of two
students in London, one of whom had invested the loan in an ISA. The levels of parental support
varied considerably, with some parents providing all of the cost of living expenses and others making
only minimal contributions. However, there were no differences according to socio-economic group.


Opinion Leader                                                                                      25
Parents of year 12 & 13 students expected to pay towards their children’s living costs. For some, this
would involve topping up the maintenance loan and for others, it would involve paying specifically
towards accommodation costs. Others expected their children to live at home and would provide
board for them. Parents from C2DE households were more likely than BC1 parents to expect their
children to help finance themselves at university with a part time job.


        “You find out what they can get in maintenance and student loan and you think
        ‘well that’s not going to cover it’ so you’re thinking you have got to find some
        money as well as her working.”
                                                             Parent of year 12-13 student, Bristol, C2DE
        “You want to see your kid do well so I think it is a fair request for those that can
        afford it to pay a bit towards it”
                                                          Parent of year 12-13 student, Newcastle, BC1



Sources of finance for part time students
Most part time students expected to rely on the income from their job to finance their study. A few
had savings which they would use to pay for tuition fees and some were considering taking out loans
to pay for these.


Some part time students received support from their employer. Whether employers supported part
time students’ studies and whether they were willing to help meet the cost of their study varied
according to both the employer and the choice of course. Those considering a vocational course
tended to want, or need, to study a course directly related to their employment to advance their
career. In this instance, there was often support from their employers to pursue higher education.
Where the employer would not, however, benefit from a part time student pursuing higher
education, they rarely supported them.


Some employers were unable or unwilling to provide financial support for their employees. Those
who were working and considering a degree to develop their career described how some of their
employers had offered to support them in other ways, for example, by allowing flexible working
hours so they could study.


        "They wouldn’t help the costs but they do offer support. I've spoken to my boss and
        she thinks it would be a brilliant idea, so I know that I've got their support if I did need
        time off... But with regards to money, I think that’s a different issue."
Part time female student, working and considering a degree to develop their career, London, BC1


Some of those considering doing a degree but finance is a barrier and those considering courses
unrelated to their current job had not yet told their employer for fear that they would not support
their decision to study.

Opinion Leader                                                                                         26
       “I don’t think they’ll be interested at all… I just don’t think they’ll entertain it.”
Part time male student, considering doing a degree but finance is a barrier, Newcastle, BC1




Opinion Leader                                                                                  27
6. Role of government, parents and graduates in financing higher
education

6.1 Summary
Most full time students and parents believed that the cost of providing higher education should be
shared amongst the government, graduates and parents. Most full time students and parents
believed that graduates should financially contribute because they personally benefit from higher
lifetime earnings and better job prospects. Some believed that making a personal contribution would
demonstrate a commitment to studying and ensure that students take the decision to go on to
higher education seriously. Some also believed that it was unfair or inappropriate for the
government to subsidise a student’s lifestyle choices, particularly if this involves stereotypical
student behaviour with lots of social activity.


Some parents believed that they had a responsibility to help their child with their future study
and/or career choices, and also to help to support them whilst at university. However the extent to
which parents felt able to financially support their children varied, particularly by socio-economic
group, with parents from lower socio-economic groups feeling less able to provide financial support.


Most participants believed that the government contribution to the costs of tuition and support for
students is important for a number of reasons: there is the perception that the government
benefits from higher taxes from graduates throughout their lifetime, and a more skilled workforce
able to generate wealth and deliver better public services. Some students and parents believed that
government contributions to higher education were important in making higher education accessible
to students from a wide range of different backgrounds, and avoiding a system based on the ability
to pay. When completing a ‘pie chart’ exercise, marking relative proportions that the government vs.
graduates should pay towards higher education, most full time students and parents believed that
the government should pay at least half the cost of higher education.3 This is because the personal
benefits of higher education were seen by many to match the benefits to society.


After receiving information about benefits to graduates of higher education, most participants did
not change their minds about the proportions that government vs. graduates should pay. However
some of the students did make changes, suggesting that students should contribute more, in light of
the information about graduates earning more money and being more employable in the long term.



At this stage in the discussions, participants were asked for their initial responses to the proportions
which students and the government should pay towards higher education. It was not about
increasing or decreasing current government or individuals’ spending on higher education. In order

3
    It is important to note that this exercise did not focus on actual amounts of money, rather on the principle of burden of funding.
Opinion Leader                                                                                                                           28
to understand in principle the role of government, students and parents in contributing towards the
cost of higher education, participants were asked to complete a pie chart exercise (see appendix 13).
This exercise was completed before and after key facts about higher education funding and the
financial benefits to graduates were presented to participants, in order to determine the impact this
information had on perceptions about the relative proportion the government and graduates should
pay. The approximate average proportions for each participant group were then calculated.


6.2 Rationale for the students and parents paying towards higher education
The vast majority of students and parents accepted that they had a role in paying towards higher
education. The main reason students and parents agreed they should contribute towards higher
education was a recognition of the personal benefits graduates enjoy, including securing better jobs
and higher lifetime earnings. Some students and parents believed that by making a personal
contribution to the cost of higher education, students were more likely to take the decision to go to
university more seriously than if they did not have to contribute towards it. Some students also
believed that it was unfair for the government to subsidise some aspects of the student lifestyle e.g.
drinking and partying. A few students believed that it was a personal choice to go to university and
they therefore had a responsibility to pay towards this.


        “If it is a smaller amount (that the graduate contributes to higher education) you’re
        not going to be as dedicated.”
                                                                Year 12 male student, Newcastle, C2DE


        “If you’re getting it for free you might think ‘oh I might just muck about for three or
        four years doing nothing,’ whereas if it was your money you know it is a waste of
        money and you would try hard.”
                                                                  Year 12 female student, Bristol, C2DE


Many students believed that the personal benefits of getting a degree were equally matched by the
benefits to society. They believed that the benefits to society included the additional tax which
graduates pay due to having higher average earnings, the benefits to public services from having
graduate employees and the additional wealth generated for the country by graduates in their jobs.


Parents felt they had a responsibility to help their child with their future choices, including helping to
support them while they were at university. The extent to which parents were able to support their
children varied, with parents from lower socio-economic backgrounds feeling less able to support
their children than those from higher socio-economic groups. Some parents, however, also felt that
their contribution should be voluntary.




Opinion Leader                                                                                         29
6.3 Rationale for the government paying towards higher education
The reasons most frequently cited for the government paying at least half of the cost of higher
education were due to the perception that the government benefits from higher taxes from
graduates throughout their lifetimes, as well as having a more skilled workforce able to generate
wealth and deliver better public services. At this point in the discussion, participants had not been
told that there may be less budget available to pay towards higher education so they were not
considering the ability of the government to afford to pay for this.


Some students and parents believed that the government should help finance higher education to
make it accessible to students from a wide range of different backgrounds and avoid a system which
is based on the ability to pay.


        “Well in the long term I am thinking if I get a better job I am paying more in taxes so
        they were going to get more money out of us.”
                                                               Year 12 male student, Newcastle, C2DE


        “I don’t think it is just the individual that benefits from a good education, I thought
        the country does. If you had got a doctor it is not just the person benefiting from the
        income but the whole society benefits.”
                                                           Parent of year 12 - 13 student, Bristol, C2DE


Some students and parents thought that the government should pay towards the cost of higher
education because they believed the total cost or the amount of debt incurred would be too high for
them to pay off post-graduation. A few parents from higher socio-economic groups believed that
they should be entitled to some help from the government towards the cost of their child’s higher
education because they had paid taxes throughout their working lifetime.


        “I just thought its going to be literally impossible for someone to pay back all of that
        money even if they were in a good job.”
                                                               Year 13 male student, Newcastle, C2DE


Some students, however, believed that if the government did cover the total cost of higher
education it could result in too many people studying, which they feared would lessen the value of a
degree. A few students also believed that the government would be unable to afford to finance the
total cost of providing higher education.


Most participants believed that the government should continue to give more support to those
students/households who were least able to afford to go to university, in order to ensure fair and
equal access to higher education. Furthermore, some participants believed that courses which
benefit the country most should be subsidised to encourage more people to gain these skills, for


Opinion Leader                                                                                       30
example medicine and some science subjects. Most participants were not aware that the
government already subsidises these courses.


        “I thought they should encourage more working class people to go to university
        because if you were not born with a silver spoon in your mouth it’s a lot more
        difficult.”
                                                         Year 12 - 13 male student, Nottingham, BC1



6.4 Balance of contributions towards the cost of higher education
All of the participant groups believed that the government should either pay approximately half or
more than half of the cost of providing higher education, the remainder being paid by the individual.
Within most participant groups, however, there were some people who thought that the
government should pay a greater proportion, others who thought that the contribution should be
equal and others who thought that individuals should pay more.


After receiving the information about higher education and the benefits to graduates, most
participants did not change the proportions they felt should be provided by the government and
students to the cost of attending university. The main reason for this was because they did not
believe that the fundamental reasons behind their initial opinions had changed. Some of the
students did, however, change their perceptions about the proportions which the government and
students should contribute after receiving the information, tending to reduce the proportion that the
government should contribute in light of the information about graduates earning more money and
being more employable in the long term.



        “I think you should be paying more yourself because of the amount of money you
        make when you get a job it’s well worth getting into debt.”
                                                              Year 13 male student, Newcastle, C2DE


Some students thought that the government should pay more after receiving the information about
higher education and the benefits to graduates, because of the additional amount that graduates
earn in a lifetime resulting in increased tax revenue for the government. This led a few students to
think that they were paying twice (once to go to university and again in increased taxes).




Opinion Leader                                                                                         31
7. Awareness of the key facts about graduates and the current
system

7.1 Summary
In order to understand participants’ levels of understanding of the key aspects of the current higher
education funding system and some of the financial benefits to graduates, participants completed a
quiz exercise and were presented with additional information. Many full time students and parents
were aware that, in general, graduates earn more than non-graduates and that there were
differences in projected earnings according to the course studied and university attended. Part time
students were less aware of the financial benefits of being a graduate and differences in average
graduate salaries. Full time students and parents had a good understanding about the different ways
that the government supports students. However they had low levels of knowledge about the fact
that the government subsidises tuition costs and that England has a more generous support
package for students than some other countries. Most were unaware that the value of a degree had
remained unchanged over the past 15 years.


In order to test participants’ level of understanding of the key aspects of the current higher
education funding system and the financial benefits of studying, participants completed a quiz
exercise. Participants then discussed their responses to the information delivered in the quiz and the
impact that the specific facts had on their perceptions of the current system. In doing so, participants
considered the effect the information about the personal benefits of being a graduate had on their
perceptions about the extent to which the government and students should contribute towards
higher education funding.


7.2 Awareness of facts about graduates
Many of the facts shown to students and parents were well known. Many students and parents knew
that graduates earned more than non-graduates. Many were also aware that courses and
universities had varying projected potential earnings for graduates. Some students were also
unsurprised by the average levels of graduate debt.


             “I think most of these facts you’re told before you apply to uni, so most of the
             figures don’t seem strange to us.”
                                                                       Year 1 HE student, London, BC1


Some students and parents questioned the average starting salary of £24,0004 that was presented to
them, as it was higher than they would expect and seemed to go against their personal or anecdotal
experience. It is quite common for participants to question ‘facts’ which go against their personal
experience or other anecdotal evidence they may have come across. However, it is worth noting that

4
    Association of Graduate Recruiters' Annual Survey
Opinion Leader                                                                                       32
there were a few students from higher socio-economic groups who were disappointed that the
average starting salary was not higher and said that they knew non-graduates who were earning
more than this amount.


       “I’ve got a nephew who graduated doing product design, the problem is he can’t get
       a job and is working in a garden centre watering plants.”
                                                          Parent of year 12 – 13 student, Bristol, C2DE


Awareness of facts about graduates - part time students
Part time students were shown the same facts about graduates as full time students and parents (see
appendix 13 for details). They were less likely than full time students to be aware of the facts. They
were also more likely to question the validity of some of the facts, especially where they were not in
line with their experiences. Few were aware of the extent of the broad differences in salaries
between graduates and non graduates and were even less aware of the differences in the earning
power of different courses than other participants.


Those considering doing a degree but finance is a barrier thought the facts about the graduate
starting salary and graduate earning power were misleading based on their own experiences.
Participants claimed their friends had not enjoyed the same benefits post graduation.


       "...I know a lot of my friends who finished university at the same time really struggled
       to find employment, whatever degrees they had done… and *Some+ had to choose
       alternative careers. Of course there were many benefits to graduating, but I don’t
       know if it's as clear cut as it looks on there (information sheet)."
Part time female student, considering doing a degree but finance is a barrier, Nottingham, C2DE


There was general agreement amongst all part time students that if facts about graduates were more
widely known, increased numbers of students would probably be encouraged to study. Part time
students thought that providing better information about wage returns would be a good selling point
to prospective part time students. It was thought, however, that the effect on part time students
would probably be limited because they felt that financial information would not be enough to
convince them to study, as other factors may have more significance in their decision-making
processes, such as their professional or personal commitments.




Opinion Leader                                                                                      33
7.3 Awareness of facts about the current system
The results of the quiz were analysed to determine any differences between participants’ knowledge
about the current system and some of the facts about graduates. The results are discussed below.


The majority (7 in 10) participants were aware of the range of types of government support available
for graduates.


Students and parents had low levels of knowledge about the extent to which the government
currently supports the higher education system. Over two thirds of participants were unaware that
the government contributed towards tuition costs and believed that these were covered by tuition
fees. Around two thirds of participants thought that England did not provide the most generous
support when compared to some other countries (US, Canada, New Zealand).



       “I was surprised by how much it actually costs the government and how much they
       subsidise.”
                                                        Parent of year 12 - 13 student, Bristol, C2DE


       “I thought England would be rubbish, they are giving you money but they expect it
       back with interest as well.”
                                                              Year 1 HE student, Nottingham, C2DE


Almost 8 in 10 participants thought that a degree was worth more or less than 15 years ago, with 2
out of 10 participants correctly answering that it had stayed the same. Around 4 in 10 participants
thought that it had got worse and around 3 in 10 participants thought that it had got better. In
discussions, some participants thought that earning power had increased because the government
and society had come to place increasing importance on going to university. Some participants also
thought that the UK economy had become increasingly reliant on a highly-educated and skilled
workforce and therefore had created increased demand for graduates. Some participants, however,
thought that the value of the degree had reduced because of the increase in the number of people
with degrees and the perceived lack of jobs for graduates.


       “I suppose the media representation and the constant negative kind of impact
       makes you just think automatically that it’s got worse and it’s going to get worse
       and it will never get better.”
                                                               Year 13 female student, London, BC1




Opinion Leader                                                                                     34
8. Perceptions of the current system

8.1. Summary
Most full time students and parents believed the current system to be fair since it is free at the
point of use, loans and grants are available for tuition fees and maintenance, and the repayment
terms were perceived to be affordable. There is some surprise across the groups that the
government subsidises the loan rate, as well as surprise that the government pays off the loan after
25 years (and a feeling amongst some that this is not appropriate as the government should continue
to try and retrieve this money). A few from lower socio-economic groups thought it was unfair that
students were currently expected to pay tuition fees, primarily because tuition had been free in the
past


Conversely, part time students believed that the current system is unfair towards part time
students since they are not afforded the same access to preferential loans and grants as full time
students. Some part time students believed that the current system fails to account for the diversity
of part time students’ circumstances. They thought the current system assumes that part time
students have greater access to funds than full time students and they point to family, work and
other financial commitments that full time students may not have.


At this stage of the discussion, participants were given a presentation and received information
about how the current system is funded (see appendix 13 for details). Participants then discussed
their more informed responses to this system.


8.2 Response to the current system
When shown information about the current system, most participants considered the current system
to be fair. The terms of the student loan were perceived to be fair since repayments were only made
once graduates were earning over £15,000 and could afford to make repayments. The repayment
levels were perceived to be manageable and did not represent a burden for graduates. A table
showing a range of different income levels and the corresponding loan repayment amount was
shown to participants and this had the effect of reducing students’ and parents’ concerns about the
impact the student loan would have on their future earnings.


The ability to repay the debt quicker and earlier if you want was also perceived as fair, as it reduces
the amount of interest that is paid on the loan. Participants had not considered the implications of
paying back a graduate loan quicker e.g. that it might not be financially advantageous to do so.




Opinion Leader                                                                                      35
        “When you think ‘£28,000’ you hear that one figure [of graduate debt] but you look
        at £5 per week of £346 a week [the loan repayment rate of a graduate earning
        £20,000p.a.] you can’t really knock that, you won’t even notice it go out.”
                                                                       Year 1 HE student, London, BC1


        “I think the repayments are probably something that you could budget for so I don’t
        think it would be a problem.”
                                                         Parent of year 12 - 13 student, Newcastle, BC1


Students and parents thought that having access to loans and grants ensured higher education was
free at the point of use, enabling students from all socio-economic backgrounds to study the course
of their choice.


Some were surprised that the government subsidises the loan rate and felt that this subsidy
demonstrated that the government is supporting higher education. However, a few thought it was
inappropriate for the government to lose money on the loans.


The additional grants available to students with low household incomes were considered fair since it
was perceived to make it easier for these students to access university.


The fact that the government pays off the loan after 25 years was surprising to some, however, a few
thought that this money could be better used to improve the financial support to current students.


A small minority of parents and students thought that it was unfair that students were expected to
pay tuition fees. The reasons for this were either because tuition fees had not been charged in the
past or because education up to 18 is free to students and therefore education post 18 should be
free too. Most participants did not outline how they thought the additional cost which would be
incurred should be funded.


Response to the current system - part time students
Most part time students were previously unaware of the current financial support system available
to part time students. Some part time students agreed that it was fair to support full time students,
especially school leavers who were unlikely to have a regular income. Participants thought, however,
that the current system was unfairly advantageous to full time students. Despite being more likely to
have a regular income, part time students did not think it was fair to have a less generous support
package available to part time students. They did not think it was right that they were penalised for
entering higher education at a later period in their lives.




Opinion Leader                                                                                      36
       "I don’t understand why there is a distinction other than part time students are more
       likely to be working. I don’t see what the difference is and I think it should be the
       same."
Part time female student, considering doing a degree but finance is a barrier, Nottingham, C2DE


Part time students thought that there were unlikely to be many students eligible for support under
the current system because of the high threshold by which people were eligible for financial support,
which made part time study difficult for many. Some part time students believed that the current
system failed to adequately take into account people’s levels of disposable income and ability to pay
towards university costs, for example, the number of children they had and their financial
commitments including mortgage and bills.


Many part time students across socio-economic groups thought that they were worse off compared
to full time students. Part time students thought that full time students had more financial support
from the government in the form of grants and loans as well as help from parents. Part time students
thought it was wrong to assume they were financially better-off because some had considerable
financial commitments which resulted in them having low levels of disposable income.


        "… taking the time off and being able to support the family, even though my course is just
        under £1,000, it’s a bit hard to find £1,000."
Part time male student, considering an academic or vocational course, London, C2DE


Part time students also thought that full time students enjoyed a range of benefits which part time
students did not have access to. There was a perception that full time students were able to focus
more on their study since part time students were not aware of the extent to which full time
students work part time. Some also thought that full time students were more likely to be brighter,
more confident when studying, and more used to learning environments.


8.3 Sources of information about the current system
Most year 12 students had not begun to find out information about student finances and very few
had received any information. One participant had received a talk from a university representative at
school and another had received a student pack which included information about grants and loans.


       “Inside [the booklet] it had loads of information in there about how much would be
       taken out and it had a table similar to that [on loan repayment amounts+.”
                                                               Year 13 female student, Bristol, C2DE


Year 13 and year 1 HE students received information from a wide range of sources, the most
common being presentations from universities, booklets on student finance (often direct from
universities), and from teachers at school. A few year 1 HE students from higher socio-economic
groups had received lessons in the sixth form about student finances.
Opinion Leader                                                                                       37
Parents’ main sources of information were via presentations at their child’s school as well as from
information their child received from universities. Parents would like to have more information
about how the student finance system works since they felt reliant on the information they received
from their children, which was not always passed on. Some parents wanted a pack containing
information on student finances when children reached 17 years of age.


Students and parents thought that face-to-face explanations about student finances were perceived
to be the most effective way of explaining student finances. Some students said that one-to-one
discussions with school/college staff were the most effective since they can provide a thorough
explanation.


        “They go through it step-by-step.”
                                                                  Year 13 female student, London, BC1



        “They come to your school and do a presentation like this, that’s better I think.”
                                                                  Year 1 HE student, Nottingham, C2DE


Some students also believed that booklets provided a useful summary of how the system works.
Other students, however, did not value leaflets as they were not interested in receiving them.


        “They came to our school and handed out leaflets and stuff and we put them in the
        bin straight away, you’re not interested in that sort of thing.”
                                                                  Year 1 HE student, Nottingham, C2DE


A few students and parents had used the internet to search for information about student finances.
The most frequently used site was www.studentfinancedirect.co.uk. While this site was thought to
contain useful information about student finance, participants were frustrated at the lack of a tool
that can be used to work out specific entitlements. The direct.gov site has this information available,
however, very few participants were aware of this.


Some year 1 HE students across the socio-economic spectrum said that they were not very
interested in student finances when they were applying to university and that no information
sources would have been particularly valued.


Some year 1 HE students said that they would have liked to have found out information about how
much things cost and felt that there was more emphasis placed on how much they would receive.




Opinion Leader                                                                                      38
        “We were not told how much living costs are. Just [that] my rent will be most of my
        costs.”
                                                                        Year 1 HE student, London, BC1


Sources of information about the current system - part time students
While part time students thought there was support available for full time students, the majority had
not looked for information on funding for a part time course because they were not aware it was
available for part time students. They were also unaware of the best place to source information
about higher education funding.


        "You're not always aware of what you are and are not entitled to and it’s just
        obviously speaking to the right person and getting [advice] on the phone. That would
        make a big difference, or the website to be clearer."
Part time male student, considering either an academic or vocational course, Nottingham, BC1


Most students would, however, look on the internet if they did want to find out any information.


        "You can find out about anything on the internet. If I need to find out information on
        anything I always start on the ‘net and then go from there. "
Part time female student, working and considering a degree to develop their career, Newcastle,
C2DE


Only one part time student had found information on higher education funding. She sourced the
information from a university website and whilst she found it useful, she suggested it was a little bit
confusing.


        "I looked into it briefly. There was quite a lot of information but it was a little bit
        confusing… it was useful. It definitely gave me some guidelines and I thought there
        was a link to another website and phone number where you could follow it up even
        more..."
Part time female student, working and considering a degree to develop their career, London, BC1




Opinion Leader                                                                                      39
9. Response to rationale for the proposals for a new system
9.1 Summary
Whilst most thought that it was reasonable to expect funding for education to be cut as well as for
other public services education was regarded as a high priority for the country.


When presented with a trade-off between achieving savings in the higher education system by
reducing participation, cutting the unit of funding per students, or increasing private contributions,
most believed that the government should finance the system by increasing private contributions.
There was overall agreement amongst participants that, in principle, those households who could
afford to pay more should do so. However, some students and parents, particularly in higher socio-
economic groups, believed that the government should reduce the numbers of people attending
university rather than seeking greater private contributions. They believed that this would increase
the value of degrees and improve graduate job prospects.


Participants were shown a presentation outlining the rationale for reforming the current system and
asked to consider 3 broad options which the government could adopt to reduce the amount spent
on higher education (see appendix 13 for details).



9.2 Response to the case for reform
At this stage, participants were shown a presentation outlining the rationale for reforming the
current system. The case for reform was then discussed without reference to the 3 options.


Full time students, part time students and parents recognised the current financial challenges faced
by the government and many believed it reasonable to expect funding for education to be cut as well
as for other public services. However, education was regarded as a high priority for the country,
particularly in terms of ensuring its economic recovery. For this reason, a few believed that cuts
should not be made in higher education spending; higher education funding should be sacrosanct.


       “They have got to make cuts because all government departments are making cuts
       so that’s reasonable.”
                                                         Parent of year 12 - 13 student, Bristol, C2DE


        "...that (cuts in HE funding) is offset by what the government actually gets from it
       as well, because they can tax all the benefit that the graduates get, so I thought
       that's not a good reason really."
                                                     Parent of year 12 - 13 student, Nottingham, BC1




Opinion Leader                                                                                     40
There was overall agreement amongst participants that, in principle, those households who could
afford to pay more should do so. The reason given for this was that people who were better off
would not be as affected by a reduction in the support available as those on lower incomes.


        “I do think that those rich people, their parents can afford it and it wouldn’t
        dissuade them from going to university because they will still be able to [afford it+.”
                                                                    Year 13 female student, Bristol, C2DE


Students and parents recognised that there were more students going to university now than in the
past, which had increased the cost to the government.


While students and parents identified the personal benefits graduates enjoy, for many participants,
this was not considered a valid reason for increasing the amount students and their parents had to
pay towards higher education. The main reasons for this were that the current system was thought
to provide a fair balance between the individual and government, whereas the proposals for a new
system were perceived to significantly increase the onus on parental contributions toward university
costs. When discussing this, it was apparent that at this stage participants did not consider the
implications of not increasing parental contributions i.e. who should pay for the shortfall in budget
available to support the system. However, most participants did not believe that they or their
children should be either worse off at university, have more debt or have reduced opportunities to
go to university.


Response to the case for reform - part time students
Part time students were presented with information about the rationale for changing the support
available for part time students to be in line with full time students, to encourage more part time
students to study (see appendix 14).


All part time students felt positive about this change, which would provide access to education for
those who had previously been put off by having to pay tuition fees up-front. This change was
thought to potentially increase the diversity of students studying.


        "...it would open doors for certain groups of people who just wouldn’t have been able
        to do it at all before, so it has to be looked at as a positive thing in that respect..."
Part time female student, considering doing a degree but finance is a barrier, Nottingham, C2DE



        "I think the part where it says that ‘there may be some part time students for whom
        the current package is not sufficient’ and that's quite important because quite a lot of
        people are slipping through the net. It could be perfect for them to do a part time
        course but due to the funding its holding them back and that’d be the worst case


Opinion Leader                                                                                        41
        scenario. Someone’s trying to better themselves but they can’t because of the
        financial side."
Part time female student, working and considering a degree to develop their career, London, BC1


One part time student, for whom finance is a barrier, suggested that it should be more explicit why
the government wanted to encourage part time students and the benefit this would make to the
country as a whole.


        "...they should say the reason for potentially changing the system is to give people a
        better chance and more opportunity to do well for themselves, to have a better life,
        to have a better job, get a grip on things. They should word it like that..."
Part time male student, considering doing a degree but finance is a barrier, Newcastle, BC1


Part time students thought the most important reason for changing the system was to encourage
those who want to study but might not be able to do so due to existing financial commitments and
lack of finance.


        "If people were looking to better themselves they should be rewarded.”
Part time female student, considering doing a degree but finance is a barrier, Newcastle, C2DE


9.3 Response to the options regarding HE funding
At this stage in the discussion, participants were presented with three options faced by the
government related to achieving savings in the higher education system by reducing participation,
cutting the unit of funding per students, or increasing private contributions (see appendix 13).


Option 1 – reducing the amount of money available per student to enable more students to
attend university
This option was rejected by the vast majority of students and parents. Participants believed that
reducing the amount of money per student would have the greatest impact on those who were least
able to afford to go to university i.e. those on lower incomes, which is considered to be unfair and
elitist. They assumed that the total amount available to support higher education would be reduced,
which they thought would lead to graduates making an increased contribution to the cost of higher
education. They thought that this would lead to increased levels of graduate debt, which they
perceived to be most off-putting for those on lower incomes. Some students and parents did,
however, believe that there should not be an increase in the number of students attending university
because they thought this lessened the value of a degree.


        “If you make it more accessible then really the degree starts to lose its meaning and
        it’s more common which means that employers won’t think of it as a brilliant
        attribute so you’re not really going to have a competitive edge over other
        candidates in jobs.”
Opinion Leader                                                                                     42
                                                             Year 12 male student, Newcastle, C2DE



Option 2 – reducing the numbers of people attending university
Many students and parents believed that the government should not reduce the number of people
attending university because they thought there should be equal access to university, benefitting
both graduates and the country as a whole.


       “To reduce the number of people attending university – it’s cutting off people’s
       opportunities to learn.”
                                                               Year 13 female student, Bristol, C2DE


       “They shouldn’t reduce the number of people at university because we need
       professional people, don’t we?”
                                                        Parent of year 12 - 13 student, Bristol, C2DE


However, some students supported a reduction in the numbers of people attending university.
Students from higher socio-economic backgrounds (BC1) were more likely to support the reduction
in student numbers than those from lower socio-economic backgrounds (C2DE). Those who
supported this idea believed that reducing the number of students attending university would
increase the value of a degree. Some students were concerned about the difficulty of getting a job
with the current number of graduates. Some thought that there were currently too many students at
university and that reducing the number of places would increase the competition for university
places, helping to ensure that only those who were the most dedicated received a university place.
Some students and parents also believed that some degrees had far less value than others and that
these should be abolished to save money.


       “There are a lot of new degrees out there, you can take your degree on David
       Beckham but what job will that get you?”
                                                        Parent of year 12 - 13 student, Bristol, C2DE


Option 3 – increase the amount of money received from sources other than the taxpayer
Option 3 was preferred by the majority of students and parents across a range of socio-demographic
backgrounds. The main reasons given were that there were the fewest negative implications for
students and because the cost is likely to be shouldered by those who were the most able to pay, e.g.
households with high incomes, and other sources, e.g. employers. Some students thought that by
raising more money from households with higher incomes, there would be more funds available to
help students on lower incomes, which they thought encouraged greater accessibility. At this stage,
the amount of the potential threshold for not receiving a maintenance grant had not been discussed.




Opinion Leader                                                                                    43
       “It’s only asking for contributions from those who can afford to pay so obviously if
       they are not able to pay it is a bit fairer.”
                                                             Year 13 male student, Newcastle, C2DE


Some students and parents thought that business should play a more active role in supporting the
higher education system, as they had a vested interest in employing highly-skilled graduates.


       “If they want a particular student for engineering then why isn’t the industry paying
       something to the university?”
                                                             Year 13 male student, Newcastle, C2DE


Although they would not be impacted personally by lower levels of maintenance support, some
parents from lower socio-economic groups commented that they thought it unfair from a broader
citizen’s perspective because it would place too great a burden on parents to pay for their children’s
university education.


Response to the options regarding HE funding - Part time students
Part time students’ opinions around each option were mixed. Their views and opinions varied
according to what each individual student understood to be fair and this even differed between part
time students with the same priorities. Those considering doing a degree but finance is a barrier and
who were looking to improve their job prospects agreed that the numbers of students attending
higher education should be reduced.


       "I think it's something that should be looked at, particularly with certain courses
       where there really is too much supply but not enough [employer] demand and not
       enough jobs out there."
Part time female student, considering doing a degree but finance is a barrier, Nottingham, C2DE


Other participants considering doing a degree but finance is a barrier conversely suggested that it
would be wrong to reduce the amount of money available, or reduce the amount of people able to
attend university. The majority of part time students therefore thought that it was fairer to find
finance from additional resources.


Part time students thought that promoting part time study should be a priority for the government.
This included those who believed that there is an over-supply of graduates since they believed that
they would personally benefit from having fewer ‘competing’ graduates in the marketplace. Part
time students thought there was unique added value to working at the same time as studying
including making students more prepared for the area of work they want to move into/continue in.




Opinion Leader                                                                                     44
10. Response to proposals for a new system
10.1 Summary

Participants were presented with an outline of potential changes to the HE funding system. It was
explained that these potential changes would not necessarily be taken forward, but were presented
to evaluate their reactions to the principles for reform and potential ways to embed those principles
in a new funding system.


Overall, full time students and parents found the proposals for a new system, as they were
presented, less appealing than the current system. The concerns with the proposals focussed on:
the suggestion that maintenance loans might be abolished, and that the fee cap might rise, possibly
resulting in variable fees.


In terms of the proposals for potential changes to maintenance costs, there was general support for
greater maintenance grants for those on lower incomes. However, the abolition of loans is seen as
the most problematic aspect of the proposals for a new system. Many students and parents believed
that any potential shift in responsibility from the student to the parent to cover maintenance costs
would be unfair (although many current students admitted that their parents did already provide ad
hoc financial support, and prospective students expected this to happen, generally they resisted the
idea that this parental support should be formalised). Some students said they would feel guilty
having this expectation of their parents, and some suggested that any such shift would erode their
independence, particularly if it meant they would have to live at home, having insufficient funds to
live away. There was concern by participants across the workshops that some parents might not be
able or willing to pay; in such instances, they suggested that there should be additional hardship
support for students. Students and parents across socio-economic groups thought it would be unfair
to expect those who earn over £60,000 per year to cover their child’s maintenance costs in their
entirety. Some (across socio-economic groups) thought that this threshold was not sufficiently high,
and others called for a broader range of factors to be taken into account when deciding on parents’
ability to pay, such as the number of children likely to go on to higher education.


Students and parents also expressed concern about the proposal to encourage greater variability in
fee setting by raising the fee cap. Some (across socio-economic groups) commented that variable
fees might create or reinforce a two-tier higher education system, where the differences between
‘best’ courses/universities and ‘worst’ courses/universities would be reinforced through different
pricing (the best being the most expensive). Some participants were concerned that, despite being
offered loans for the full amount, more expensive courses wouldn’t be accessible for those on lower
incomes. Those from lower socio-economic groups were more debt averse and concerned that the
premium of a more expensive course was not necessarily worth the associated debt. A few from
lower socio-economic groups commented that even if they were willing to pay for more expensive
courses, they would feel that courses charging higher fees were not for ‘people like them’ and would

Opinion Leader                                                                                    45
be more likely to attract wealthier students. Participants did not necessarily trust universities to set
variable fees, assuming that all universities might automatically charge the maximum amount
permitted. Participants wanted reassurance that there would be some kind of external, independent
regulation of fee setting.


In terms of any increase in fee levels, some thought that £6,0005 would be too high a cost to pay for
tuition, on the basis that this is seen as being double the current level. It is important to note that
before receiving information about how tuition costs were funded (partly through tuition fees and
partly through government subsidy) there was a widely held belief that current tuition fees cover the
entire cost of tuition. However, the proposal that loans would be available for the full amount,
made the figure acceptable for some, supported by repayment terms which were perceived to be
fair. The proposal to increase the amount of interest on student loans to cover the government’s cost
of borrowing was not met with concern in the main, as this would not affect monthly repayment
amounts (only the duration of repayment), and a few commented that it would be appropriate to
introduce this higher rate to prevent the government losing money. It was suggested that certain
criteria would make the higher fees more acceptable, including transparency in how course costs
were calculated, indications of higher standards of tuition and better facilities and indications of
subsequently improved job prospects (and improved earning potential).


Part time students, on the other hand, believed that the proposals for a new system would be fairer
than the current system, since it would offer parity with full time students. They felt that introducing
greater support for part time study through access to a fee loan would be a way to acknowledge
their value, in a way in which the system is not currently felt to do. They believed that the new
proposals would be likely to increase the access and opportunities for people to study part time.
They also suggested that part time students would no longer be prohibited from up-front costs and
therefore would be more able to take up part time study with less personal financial risk. However,
there was some concern about a potential rise in tuition fees and a feeling that a higher overall cost
along with higher interest rates could deter some prospective students (a few said this would deter
them, whilst others were concerned for other people more broadly).


Most believed that the proposals for a new system would have an impact on university choices.
However very few students said that it would prevent them from attending university; those that did
think it would prevent them were those who did not want to ask their parents for additional support
(across the socio-economic groups) and those that felt their parents might not be able to afford to
pay the maintenance costs (across the socio-economic groups). The main impact was thought to be
increased scrutiny in the course and university chosen to ensure that they were making the best
choice. They said they would give greater consideration to the choice of course (due to variable fees)
and the location of the university (due to the impact of maintenance costs). Some students and
parents from lower socio-economic groups said that they would opt for a less expensive course as a


5
    The amount of £6,000 was presented as the maximum level at which fees would be capped.
Opinion Leader                                                                                       46
result of variable fees, despite the offer of a loan for the full tuition fee amount. However, some
were prepared to pay for more expensive courses to get a better degree.


The impact of the proposals for potential changes to maintenance support was perceived, by full
time students and their parents, to be an increase in the proportion of students attending a local
university and staying at home. There was some concern that this would lead to some students
choosing an inferior course, since their choice would be limited to universities within commuting
distance. This choice of an inferior course could be reinforced if the introduction of variable fees
acted to highlight the ‘best and worst’ courses and ‘best and worst’ universities. Some full time
students said that they would need to use other sources of income to pay towards maintenance
costs, for example, a few mentioned taking a gap year to work and save.


Most full time students and parents said that the potential changes to tuition fees would not deter
them/their child from going to university. This was primarily because students would receive a loan
for the full amount. Variability in fees would mean that the choice of course would be further
scrutinised. Firstly, students would need to assess preparedness to pay, and those in lower socio-
economic groups were more likely to opt for less expensive courses. Secondly, if courses were more
expensive, students would need to assess whether this cost was justified.


Some part time students thought they would be more likely to go university if they had to access to
tuition loans, whilst others might be put off by the increased fee amount.


At this stage in the discussion, participants had received a presentation and information about
proposals for a potential new system. Directly after receiving this information, and before more
considered responses to the proposals for a new system were solicited, participants were asked for
their initial reactions to the proposals to understand the key points which resonated with students
and parents.


10.2 Initial response to proposals for a new system

Overall, the proposals for a new system were perceived by students and parents to be less appealing
than the current system.


The concerns with the proposals focused on: the perceived low level of the income threshold for not
receiving maintenance support (£60,000) which was considered too low to render higher education
affordable, the suggestion that maintenance loans might be abolished, and both that the fee cap
might rise, and that this might result in variable fees.


Participants did, however, welcome the additional non-repayable grant support for students from
lower socio-economic backgrounds.

Opinion Leader                                                                                   47
Some parents and year 13 students across socio-economic groups thought that the attempt to
represent the proposals for a new system as having lower graduate debt was misleading. This was
partly because they thought that having lower debt levels was positioned as being a positive financial
aspect of the proposals, which they believed was not accurate since they felt that the maintenance
support was less generous under the proposals for a new system. Some also thought it was
misleading because students may need to take on additional debt in the form of bank loans or an
increased overdraft to pay towards their maintenance costs.


Initial response to proposals for a new system - part time students
Part time students’ initial reactions to the proposals for a new system were positive. The main aspect
highlighted was bringing the part time system in line with the full time system. Those considering
either an academic or vocational course felt that students would no longer be prohibited by up-front
costs and would therefore be more able to take up part time study at less financial risk to
themselves.


Those who were considering a degree but finance is a barrier believed that the proposals for a new
system recognised the value of part time students. Part time students did not feel like they were
significantly financially better off than full time students. Some thought that they were worse off
than students due to their existing financial commitments and therefore thought it was fair for them
to receive equality of support with full time students. Many part time students across socio-
economic groups believed that they were not financially better off than full time students due to
their high levels of existing financial commitments e.g. mortgages


        "It sounds like a better idea, it sounds as though they've realised that people who do
        work and have commitments, who can only study part-time are quite a sort of
        valuable asset."
Part time male student, considering doing a degree but finance is a barrier, Newcastle, BC1


10.3 Response to potential tuition cost changes
During this part of the discussion, participants considered in detail the potential tuition cost changes.


Understanding of tuition costs
Most participants understood the information explained to them about the potential changes to
tuition costs. Students and parents understood the key information, e.g. that there could be variable
fees, the tuition fees could increase up to £6,000, and that loans could be available to cover the cost
of tuition costs.


Participants wanted more information on how tuition fees were calculated so they could make an
accurate assessment of the value of different courses.

        “If I am getting six grand in a loan then what’s it going to pay for?”
Opinion Leader                                                                                        48
                                                              Year 12 male student, Nottingham, BC1


Understanding of potential changes to tuition costs - part time students
Overall, part time students understood the information presented to them. A few students felt that
some of the information was confusing, particularly the information about who pays for the course
(government or student), when they need to pay and how they need to pay. Students who think
finance is a barrier and those looking to improve their job prospects thought that the information
about funding and the relationship between the individual, the university and the government was
not clear.


A few part time students only wanted to know key headline information.


        "I just want to know, do I choose the course and do they give me the money, that’s
        all I want to know."
Part time male student, considering either an academic or vocational course, London, C2DE


Response to potential changes in tuition costs
Overall, the potential change to tuition fees was not well-received by any participant. Some of the
potential changes were perceived to be more acceptable than others, with the increase in the
interest rate being the most acceptable and the variability of fees the least acceptable. Government
subsidy of more expensive courses which are beneficial to the country, for example medicine, was
perceived to be positive.


Variable fees
The proposal regarding the introduction of variable fees was the most contentious aspect of tuition
cost reform. Many students and parents believed that introducing variable fees would create a
system which was less fair than the current system. The main reason for believing this was a concern
was that variable fees would create or reinforce a two-tier higher education system, where students
who had lower household incomes would be less likely to choose more expensive courses due to
being more debt averse and students who were better off being more likely to choose the more
expensive courses.


Some students and parents across socio-economic groups thought that variable fees might reinforce
a perception that some universities and courses were only for those from higher income households.
A few from lower socio-economic groups commented that even if they were willing to pay for more
expensive courses, they would feel that courses charging higher fees were not for ‘people like them’
and would be more likely to attract wealthier students.



        “The reality is that they (my child) would probably go for the cheaper one (course).”
                                                          Parent of year 12 - 13 student, Bristol, C2DE

Opinion Leader                                                                                      49
        ‘Medicine is going to cost me six grand and the other one (course) is going to cost
        me three then I’ll go for that and maybe I could have achieved a lot more with
        medicine.”
                                                                  Year 1 HE student, Nottingham, C2DE


Some parents and students believed that variable fees would create or reinforce educational
inequalities, whereby people from higher socio-economic groups had greater opportunities than
those from lower socio-economic groups.


        “It’s really bad actually because like it is widening the gap between who has a lot of
        money and who doesn’t.”
                                                               Year 12 male student, Nottingham, BC1


        “You will get the better-known universities putting their prices up and creating a
        class system. That’s going backwards.”
                                                       Parents of year 12 - 13 student, Newcastle, BC1


Some students and parents did not trust universities to set their own fees fairly. A few students and
parents expressed concern that some universities might charge more due to their prestige or brand
rather than as a reflection of the quality of the course. Students and parents wanted safeguards to
guarantee that students get value for money. Participants were asked who they thought should set
fees and were given a range of options including the university and an independent body. Most
students and parents want an independent regulator to set variable fees to ensure that the fees
charged were fair and represented value for money.


        “An independent body because the university will charge whatever they can get
        away with.”
                                                                        Year 1 HE student, London, BC1


Participants were asked to consider whether courses had different values and most believed they
did. Participants defined value in relation to societal and individual benefits as well as the cost of the
course. Some courses were perceived to have greater value to society such as medicine and some
science courses. Some courses were perceived to have greater value to the individual by enabling
them to command a higher graduate salary due to the course and/or the university. Participants also
recognised that some courses were more expensive to provide, due to the equipment needed,
contact time, lecturer salaries etc. Students and parents recognised that some courses were better
than others, due to having a better reputation, better lecturers, better facilities etc. Some students
and parents expressed the view that having variable fees would make the differences between
courses and universities more explicit, resulting in a clear demarcation between what they
considered to be good universities and courses and poorer universities and courses. Most students

Opinion Leader                                                                                         50
and parents thought that this was a negative change because they felt that some students would be
discouraged from paying for more expensive courses due to being debt averse, and that those on
poorer courses or attending poorer universities would be more likely to feel that they were getting a
sub-standard degree. A few students believed that variable fees would be related to the quality of
the course and university and make it easier to choose a higher quality course.


A few students thought that variable fees were fair if they resulted in significantly higher future
earnings, either due to the course, e.g. medicine and dentistry, or because of the prestige of the
university.


        “You get what you pay for.”
                                                             Year 13 male student, Newcastle, C2DE


Participants identified some positive aspects of variable tuition fees. Some students and parents
thought that students would be more careful when choosing their university course. A few year 13
students thought that their ideal course could be cheaper than other courses. A few year 12 and year
13 students thought that higher fees could lead to better facilities, teaching etc. A few year 1 HE
students thought that variable fees could be used to incentivise students to take courses that were
more important to the country as a whole. Some year 12-13 students and a few year 1 HE students
across socio-economic groups thought that having variable fees would be a measure of the quality of
the course and university, with the more prestigious universities and courses having higher fees.


Proposals regarding an increase in tuition fee levels
Before receiving the information about how tuition costs were funded, i.e. partly through tuition fees
and partly through government subsidy, the vast majority of participants believed that tuition fees
covered the entire cost of their tuition. Therefore the rise to £6,000 was perceived by some as a
considerable increase in tuition costs, despite it being explained to them that this was partly due to
the government potentially reducing the direct funding which it gave to universities. The increase in
tuition fees was of most concern to year 12 and year 13 students. Some were concerned about
incurring higher levels of debt when they graduated. Participants thought that the debt levels would
be significantly higher as they could be paying nearly twice the current fee levels. They had not
necessarily considered the impact a reduction in maintenance loans would have on overall graduate
debt to the student loans. Whilst some year 1 HE students were concerned about rising tuition costs,
many were more concerned about the potential impact of variable fees. A few participants believed
that by adopting more of a market system, universities would seek to provide better courses and
better quality information about their courses, which could be used to make a more informed choice.


The potential increase in tuition fees was perceived by some participants across a range of socio-
economic groups to be mitigated by the repayment terms. However, the repayment terms were not
enough to stop some low-income students opting for lower cost courses.


Opinion Leader                                                                                      51
Some participants thought that it was acceptable to charge higher fees if there was:
    -   Greater transparency about how the cost of the course was calculated
    -   Provision of indications for future earnings
    -   Higher quality tuition
    -   Higher quality facilities
    -   More contact time
    -   More 1-to-1 tuition
    -   Better qualifications
    -   Better employment prospects
    -   More information to enable comparison between universities and courses, allowing students
        to make a more informed choice, e.g. quality of teaching, future earnings, student ratings
        etc.


        “At Oxford they get one-to-one tuition whereas in most universities it’s just the
        seminar. If you specifically want to speak to them you have to make an
        appointment.”
                                                                          Year 1 HE student, London, BC1


Most students and parents agreed with the proposal that the government should subsidise courses
that were important to the country if they cost more than the £6,000 fee cap. The main reason was
to reduce the potential for students to be put off studying these courses due to their cost. Some
participants believed that some of these courses should be subsidised if it was necessary to
encourage greater levels of participation.


Participants were asked for their responses to increasing the fee cap to £10,000. Most participants
believed that £6,000 was the highest reasonable amount for students to pay for fees and that a rise
to £10,000 would be too high.


Potential increase in interest rate on student loans
The increase in the interest rate on student loans was not perceived to be particularly problematic.
Some participants thought it was fair that the government should charge graduates the same
interest as it pays and that it should not lose money on the loan. A few parents from higher socio-
economic groups objected to this increase, since it would increase the amount of the graduate debt.


        “Well if they are paying them back at them sorts of rates it’s fair, isn’t it.”
                                                            Parent of year 12 - 13 student, Bristol, C2DE


Response to potential changes in tuition costs - part time students
Part time students all felt predominantly positive about the potential changes in tuition fee support.
They believed that the potential proposals would be likely to increase access and opportunities for
people to study part time.

Opinion Leader                                                                                        52
        "[If] they open it up and it makes it more accessible and I know that speaking for
        myself personally that it would make it more viable for me to look at that option."
Part time female student, working and considering a degree to develop their career, Newcastle,
C2DE


Some part time students thought that they would be more likely to go university due to access to
tuition loans, whilst a few might be put off by the increased fee amount.


All part time students thought that the proposals for a new system would have a positive effect on
their decision to go to university. Some part time students thought that it would make part time
study not only attractive but possible.


        "…you know, if I could get a loan for the fees for the course it would give me an
        option that I don’t have right now."
Part time female student, considering doing a degree but finance is a barrier, Nottingham, C2DE


Those considering either an academic or vocational course were more trusting of universities to
spend their tuition fees wisely than full time students. However, in order to ensure that they
received value for money for their courses, they wanted greater transparency in how institutions
spent their money.


        "So it would be nice to make sure that you’re getting what you’re paying for."
Part time male student, considering either an academic or vocational course, London, C2DE


Those who were considering doing a degree but finance is a barrier wanted a general increase in
quality and quantity of tuition, including more support provided to students. Specifically, these
students wanted to see approachable lecturers who had time to answer students’ questions about
their course. They also thought that universities should make a commitment to guarantee
opportunities to students from lower socio-economic backgrounds.


        “I would expect a lot more support than what I got when I was at university. It is
        about independent learning but you also want your lecturers to be more
        approachable than they are at the moment... So I would suppose if you were paying
        £6,000 per year you would be expecting a lot more than what you're getting at the
        moment I would think."
Part time female student, considering doing a degree but finance is a barrier, Nottingham, C2DE


Those working and considering a degree to develop their career through further study also
highlighted a possible ‘aftercare service’, through which universities could help part time students
get work once they complete their studies.

Opinion Leader                                                                                    53
       "I guess job placement or internship placements or something to help you with your
       career."
Part time female student, working and considering a degree to develop their career, London, BC1


10.4 Response to potential changes to maintenance costs
During this part of the discussion, participants considered in detail the potential changes to
maintenance.


Understanding of potential changes to maintenance costs
From the information provided, most participants understood the key changes to the potential new
maintenance costs, i.e. that no loans would be available for maintenance costs, grants would be
available for low income households, partial grants would be available for people who had incomes
between £25,000 and £60,000 and no grants would be available for students with a household
income over £60,000.


A few students in year 12 did not understand the difference between a loan and a grant and would
like the differences to be explained. Some year 12 & 13 students and parents of year 12 & 13
students wanted specific information about exactly what size grant they would be entitled to, e.g. a
grant calculator. Some students and parents wanted more information on the phrase ‘where they
were able to’ in relation to parental contribution to maintenance costs and wanted to know how
parental contributions would be calculated. Some parents and students questioned what would
happen if parents were unwilling to contribute towards their child’s maintenance costs.


A few students questioned the role that bursaries would play in the potential new system, although
they were not particularly concerned about them not being available.


       “It doesn’t mention bursaries.”
                                                          Year 12-13 male student, BC1 Nottingham


Understanding of potential changes to maintenance costs - part time students
Part time students thought the information presented in the session regarding the cost of living
expenses was clear and understandable. Those considering either an academic or vocational course
and those working and considering a degree to develop their career did, however, suggest that the
information could be more specific about how much funding part time students would receive.


       "It would be of more value to show exactly how much they're throwing in the
       system and how much they’re going to benefit people."
Part time female student, working and considering a degree to develop their career, London, BC1


Opinion Leader                                                                                   54
        "Because if you don’t know what the full grant is for a full time student then you
        would have no idea what 75% really means."
Part time female student, working and considering a degree to develop their career, London, BC1


Response to potential changes to maintenance costs
Some students were not aware of their household income and were therefore less aware of how the
potential changes to the maintenance funding would affect them personally.


Many students and parents believed that some of the potential changes to the financing of
maintenance costs were problematic. The most problematic aspect of the proposals for a new
system was perceived to be the abolition of maintenance loans. Despite choosing the option of
increasing the contributions of those who can afford to pay when presented with 3 potential options
for reducing spending on higher education, many students and parents believed that the shift in
responsibility from the student to their parent to cover maintenance costs was unfair, because they
would not benefit directly from their child’s university education. Participants believed that most
parents would be expected to pay more towards living expenses than they did under the current
system, since the grants available were not as large as the loans available under the current system.
Some students said that they would feel guilty that their parents were subsidising their maintenance
costs, even if they were able to afford it.


        “In reality I’d feel a bit guilty about putting this on my parents and all of my living
        costs and my travel they would have to pay for.”
                                                                 Year 1 HE student, Nottingham, C2DE


Some students were concerned that their independence would be eroded by their parents paying a
greater proportion of their maintenance costs. Some were concerned that their parents could be
more involved in the decision making regarding course choice and might veto their preferred choice.


        “You’re not going to be independent because it’s your mum and dad’s money.”
                                                                 Year 13 female student, Bristol, C2DE


Some students were concerned that their or other people’s parents might not pay some or all of the
student’s additional maintenance costs.

Many students and parents from all socio-economic backgrounds thought it was unfair that those
who earned over £60,000 per year would not receive any additional support towards the cost of
living expenses. Some students and parents felt the government was penalising parents with higher
incomes. Some participants did not think that £60,000 was a high enough threshold for all parents to
be able to afford to pay towards their children’s education. Others called for a wider range of factors
to be taken into account when deciding on the ability of parents to pay towards higher education


Opinion Leader                                                                                      55
costs, since people with higher incomes may have higher outgoings, e.g. children of university age,
mortgage, car loans etc.


        “I think over £60,000 with no help at all is a bit unfair because you could be working
        all the hours God sends...to earn that sort of money.”
                                                           Parent of year 12 - 13 student, Bristol, C2DE


Some students expressed concern at not being able to afford to pay for all of their maintenance costs
without access to a full grant or a loan.


        “I struggle as it is and would prefer a combination of loans and grants and a grand
        and a half will not go very far to paying my accommodation costs.”
                                                                   Year 1 HE student, Nottingham, C2DE


        “How are you going to live without the money? You are going to need the loan to
        get the money to live.”
                                                                 Year 12 male student, Nottingham, BC1


Students and parents welcomed the full grants available to help students on lower incomes to attend
university. Some thought that the maintenance grant would encourage people who were more debt
averse to attend university.


        “It usually is the higher class who probably go to university and people from a lower
        class – they will be able to go as well.”
                                                                   Year 12 female student, Bristol, C2DE


        “Yeah, it gets rid of the fear of debt really. I mean a grant is obviously better than a
        loan. Obviously you don’t have to pay it back. It means a better financial state for
        me anyway.”
                                                                 Year 12 male student, Newcastle, C2DE


A few students and parents appreciated receiving a partial grant, since they would not have to pay
this back.


        “People who have a middle income get a grant as well because they are always like
        left behind, like the lower ones always get a lot and the higher class people already
        have a lot of money but like the middle class don’t get anything so it is good that
        they get a grant as well”
                                                                   Year 12 female student, Bristol, C2DE




Opinion Leader                                                                                       56
Response to potential changes to maintenance costs - part time students
Part time students thought that the proposals for a new system for maintenance costs were an
improvement compared to the current system. One student described it as a “huge shift” by
increasing the amount of non-repayable help for part time students, particularly those on low
incomes. Those working and considering a degree to develop their career also thought that taking
into account the diversity of students’ situations was a positive step forward. However, part time
students wanted to make sure that the proposals for a new system took into account a range of
financial factors when assessing how much support people should receive. These included bills,
mortgages, rent, travel costs and children.


10.5 Impact of the proposals for a new system on university choices
Most participants believed that the proposals for a new system would impact on their or their child’s
decision to go to university; in particular, resulting in students being more likely to live at home,
reducing their independence. However, very few students (mainly from higher socio-economic
groups) said that the potential changes would result in them not attending university. Those that did
think it would prevent them were those who did not want to ask their parents for additional support
(across the socio-economic groups) and those that felt their parents might not be able to afford to
pay the maintenance costs (across the socio-economic groups).


The potential changes to tuition fees were expected to have a greater negative impact on the course
choices of students from lower socio-economic groups, whereas the potential changes to
maintenance costs were perceived to have greater negative impacts for students on middle and
higher incomes.


Many felt that the potential changes would result in them/their child giving closer scrutiny to the
courses and universities to ensure that they had made the right choice. They would give greater
consideration to the course (due to variable fees) which they thought was a good thing, and the
location of the university (due to the impact of maintenance costs) which they thought restricted
their choice of university.


Impact of potential changes to tuition fees
Most students and parents thought that the potential changes to tuition fees would not deter
them/their child from going to university. The main reason for this was perceived to be that students
would not have to pay the tuition costs at the point of use.


Most students and parents also believed that the potential changes to tuition fees would not affect
the subject choice, since the subject matter was an overriding consideration in going to university
which they were not prepared to sacrifice.


The main effect of introducing variable fees was perceived by students and parents to involve making
choices between more and less expensive courses. Students and parents from lower socio-economic
Opinion Leader                                                                                    57
backgrounds were more likely than those from higher socio-economic groups to say that they would
opt for a less expensive course if variable fees were introduced. However, some were prepared to
pay for more expensive courses to get a better degree. Those from higher socio-economic groups
were more likely to be prepared to pay a premium for a better quality course.



        “She may look at it and think that two universities offering the same course but one
        is doing it for X amount and another is doing it for X amount and think ‘oh I’ll go to
        the other one because it’s a little bit cheaper’
                                                            Parent of year 12 - 13 student, Bristol, C2DE


        “I think I would do the one that was less, even though I didn’t want to do that one as
        much”
                                                                  Year 12 female student, Bristol, C2DE


Impact of potential changes to tuition fees - part time students
Part time students had mixed reactions to the impact of potential changes to tuition costs. Some
thought they were more likely to go to university due to the access to tuition loans. However, a few
felt they may be put off studying due to the increase in tuition fees and increases in the interest rate.


Impact of potential changes to maintenance costs
Many students and parents believed that the potential changes in maintenance costs would not
affect their decision about whether or not to go to university. The main effect of the potential
changes was perceived to be an increase in the proportion of students attending a local university
and staying at home. Many students and parents (from a range of socio-economic backgrounds)
believed that they and/or other students would be more likely to live at home and attend a local
university due to them/their parents not being able to afford to pay the maintenance costs of going
to a university away from home. Some students and parents expressed concern that this would lead
to some students choosing inferior courses since their choice would be limited to the universities
within commuting distance. Some students and parents expressed concern that there would be
greater competition for local university places which could lead to some students not being able to
study their chosen subject or to go to university at all. This inferior course choice would be reinforced
if the introduction of variable fees acted to highlight what they considered to be the ‘best and worst’
courses and ‘best and worst’ universities. Some full time students said that they would need to use
other sources of income to pay towards maintenance costs, for example, a few mentioned taking a
gap year to work and save.


        “This is going to stop them doing what they want in life, they are not going to be
        able to go away from home.”
                                                           Parent of year 12-13 student, Newcastle, BC1


Opinion Leader                                                                                        58
Some students said that they would need to use other sources of income in order to pay towards
their maintenance costs at university. Some students said they would take a part time job. A few
said they would work during a gap year and use their savings, and a few said that they would need to
use an overdraft to pay towards their maintenance costs.


Impact of potential changes to maintenance costs - part time students
Whether or not the new proposals would have an effect on part time students depended on their
living situation. Many part time students said that the proposals were unlikely to have much effect
on their decision to study since they would not incur significant expenses by attending university.
There were, however, part time students from every group who thought it would have a very
positive effect on their decision to study if funding could pay for childcare, travel expenses and
books.


         "I think it would yeah, I think it’d help. It would increase my chances of going."
Part time female student, working and considering a degree to develop their career, London, BC1




Opinion Leader                                                                                   59
11. Attitudes to debt and the financial implications of the proposals
for a new system


11.1 Summary
Participants’ attitudes to debt and levels of debt aversion played a major role in their reactions to
the new system and so were examined in depth. Findings show that students were less debt averse
than parents and they expressed less concern about paying back graduate debt after university. This
is something they had largely come to terms with in making their decision to go to university. The
potential increase in the duration of debt repayment (due to the slightly higher interest rate) under
the proposals for a new system was not particularly concerning for most students, as the repayment
terms were thought to be fair and not particularly onerous.


However, when given the option, most students would prefer to receive access to a higher
maintenance loan rather than a grant at a lower level (i.e. more cash in hand now) to help ensure
that they had sufficient funds to pay for their living expenses at university. In the main, concern
about finances whilst at university was more acute than concern for levels of debt.


Part time students welcomed access to maintenance grants and loans for tuition fees. All part time
students would prefer a grant but recognised that this was unlikely, especially in the current
economic climate; assistance with the cost of tuition fees was their primary concern. They said that
they would rather have a government loan, with a low rate of interest, than rely on other sources of
income. They believed that there was a place for employers to contribute and that they should be
encouraged to do so, however there was recognition that employers, especially small businesses,
may not be in the financial position to do so.


Participants’ attitudes to debt and levels of debt aversion played a major role in their reactions to the
proposals for a new system and so were examined in depth. Students and parents were shown
graphs illustrating debt levels and repayment durations based on different graduate income levels.
See appendix 13 for details.



11.2 Attitudes to debt
Overall, whilst students expressed some concerns about debt, they were less concerned about
graduate debt and repayment than their parents. Most students accepted graduate debt as part of
getting a university degree, but some of those from lower socio-economic groups were reluctant to
take on significantly more debt.




Opinion Leader                                                                                        60
Most participants believed that the loan repayment terms were fair and affordable. Whilst some
students liked the idea that student loans were paid off by the government after 25 years, many did
not understand the rationale behind it.


            “Writing off means that the government are paying more. That seems like a stupid move.”
                                                                Year 13 male student, Nottingham, BC1


The increased duration of graduate debt, under the proposals for a new system, was not a major
cause of concern for most students and parents. Most did not think that this would affect whether or
not they went to university since it would not affect their finances whilst at university, which were
considered to be more important.


        “It doesn’t really matter how you pay it off as long as you have got enough to live
        off.”
                                                                        Year 1 HE student, London, BC1


Parents, however, were more concerned about debt levels post graduation because they did not
want this debt to become a burden for their children in the future. Some parents were also
concerned that they may have to take on debt in order to help finance their child’s living expenses.
Some parents were worried about their ability to pay back this debt since they would not have
access to student loans.


The cost of the repayment was thought to be manageable. Participants thought it was unlikely to
make a significant difference to graduate incomes. Students and parents welcomed the ability to pay
off the loan quicker for those who preferred to or were able to clear the debt.


        “You never miss the money. It’s not like it comes into your account and then
        someone takes it away. It’s just that you don’t see it.”
                                                                        Year 1 HE student, London, BC1


        “I would rather not have to think about debt at all and just pay it off.”
                                                                   Year 12 female student, Bristol, C2DE


A few students, however, were more debt averse and were reluctant to have to pay back a loan for a
longer period. A few thought that the government was trying to claw back more money from
graduates by increasing the duration it takes to pay back the loan.




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11.3 The effect of the proposals for a new system on people from different
backgrounds
Participants were shown pen portraits which illustrated examples of how people from a range of
household incomes were affected by the current system and how they would be affected by the
proposals for a new system. See appendix 13 for details.


The proposals for a new system were perceived by some parents and students to be fairer than the
current system, especially to people on low incomes, due to the additional grants available. The
proposals for a new system were, however, perceived to be less fair for those on middle and higher
incomes, due to the reliance on parental contributions towards maintenance costs.


Some students and parents were concerned that the proposals might not take into account the
disposable income available to parents (since they were unaware of the factors which were taken
into account when means testing), resulting in some parents being unable to afford the full
maintenance costs.


            “I really think they need to take into account the outgoings as well because
            some people have really high mortgages and more than one car.”
                                                                Year 1 HE student, Nottingham, C2DE


11.4 Loans vs. grants
Participants were asked to consider two options in relation to maintenance costs (see appendix 13).
Participants could either receive a larger maintenance loan or a smaller maintenance grant.


Most students and parents preferred having more cash in hand whilst at university and were less
concerned about debt levels when they graduated. They perceived it to be more important to be
able to pay their living expenses rather than being reliant on their parents and other sources of
income. This was regardless of whether or not their parents were able to help them.


Most students and parents believed that having access to a higher loan was fairer than having a
smaller grant. They thought it was fairer for the student, as they took on the responsibility for their
debt. They also thought it was fairer for parents, since they would not be paying as much towards
maintenance costs. Furthermore, some students believed that if students took on the loan
themselves, it would help to secure their independence and give them the freedom to choose their
own destiny.


Some students and parents thought that the loans were fairer because they promoted equal
opportunities which were not based on parental income.


            “Right, I am going to take this money and pay it back myself.”

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                                                               Year 13 female student, Bristol, C2DE


Some students believed that the potential new grant would not fully cover their maintenance costs
and could result in students taking out a loan at a higher rate of interest from other sources, e.g.
from a bank, making the student financially worse off.


11.5 Thresholds for maintenance grants
Many year 12 & 13 students found it difficult to make a judgement about threshold levels for
maintenance grants because they were less aware of parental incomes and ability to pay towards
maintenance costs. Some year 1 HE students, parents, and a few year 13 students thought that the
£60,000 cut-off for not receiving a maintenance grant was too low. Some participants across a range
of socio-economic groups suggested that this should be increased to £90,000 or £100,000.


Many students and parents believed the eligibility criteria for receiving maintenance grants should
be based on factors affecting their ability to pay. They thought that basing the system on household
income alone could result in some parents being unable to afford their child’s maintenance costs.
Students and parents thought the most important additional factors to consider were: disposable
income, number of children, and number of university age children.


A few parents from lower socio-economic groups thought that the lower threshold should be raised
to increase the number of students receiving a full maintenance grant.



11.6 Financial help for part time students
Part time students were asked what they thought a reasonable deal for part time students would be.
Many perceived it to be reasonable to have the funding system for part time students brought in line
with full time students.


        "The same as what it would be for full time students because most of the part time
        courses are going to take twice as long to do."
Part time male student, considering doing a degree but finance is a barrier, Newcastle, BC1


Assistance with the cost of tuition fees was a priority for part time students. They thought there
needed to be a move away from the up-front cost of tuition fees to a deferred method of payment in
the form of loans. Furthermore, students for whom finance is a barrier thought that they should be
entitled to loans and non-repayable grants to the same extent as full time students.


        "Well support on the fees most definitely, because once you are there there’s so much
        other hidden expense."
Part time female student, working and considering a degree to develop their career, London, BC1


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         "That's the biggest chunk I think that you now have to come up with up-front before
         you even start the degree. So that's the hardest part, the initial hurdle."
Part time female student, working and considering a degree to develop their career, London, BC1


Some of those considering either an academic or vocational course emphasised that it was not the
government’s money, but the taxpayer’s money and, as long-serving taxpayers, they should be
entitled to some form of financial assistance.


         "You seem to forget it ain’t the government’s, because we pay the taxes, we’re
         working already… So we deserve that, we deserve that little bit of help out of the
         government."
Part time male student, considering doing either an academic or vocational course, London, C2DE


All part time students would prefer a grant but recognised that this is unlikely to be possible due to
the current economic climate.


         "Everyone would want a grant, but I know to support the whole country studying part
         time with free grants really isn’t viable, especially when the government is really in
         debt as I've heard on the news today."
Part time female student, working and considering a degree to develop their career, London, BC1


         "If they made a loan out of it, there would be more money to go round… The way I
         look at it is if it’s a loan, yeah okay you were paying taxes anyway because you’re
         working, but they’ll give you that time to sort yourself out and to get yourself better
         educated, therefore the loan, they get their money back, or they get our money back,
         but the other way, they don’t get anything out of it."
Part time male student, considering doing either an academic or vocational course, London, C2DE


All part time students said that they would rather have a government loan than rely on other sources
of income. Lower interest rates make the government appear safer, fairer, and less threatening than
other sources of finance, such as bank loans, which are perceived to charge much higher interest
rates.


         "There's something less threatening about having a student loan where you know you
         don’t have to pay it back unless you're on a certain salary and it comes off through
         your wages so you don’t have it taken out after you’ve got your final wage, it's
         already gone. So there's something kind of reassuring about that..."
Part time female student, considering doing a degree but finance is a barrier, Nottingham, C2DE


Employer support for part time students
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Part time participants believed that there was a place for employers to contribute to employees’
studies. Part time students thought that employers should be encouraged to support their
employees, although they recognised that it would have to benefit the employer if it was going to
work. There was a feeling that companies, especially small companies, were often not in a financial
position to be able to provide support directly to their employees and would require incentives to
enable this to happen.


       "I suppose it's got to go to money again hasn’t it. You would have to actually
       encourage employers by giving them some kind of financial incentive to send their
       staff on training courses or university courses because I can’t imagine them wanting
       to do it for any other reasons unless they actually have to or it's going to really
       benefit them from a business point of view."
Part time female student, considering doing a degree but finance is a barrier, Nottingham, C2DE


A few participants said that their employer would offer non-financial support, for example, by
allowing them time off.


       “They wouldn’t help the costs but they do support. I've spoken to my immediate boss
       and she thinks it would be a brilliant idea, so I know that I've got their support if I did
       need time off or to change something or help with anything, I think they would help”
Part time female student, working and considering a degree to develop their career, London, BC1




Opinion Leader                                                                                       65
12. Conclusions and recommendations

Impact of the proposals for a new system on student choice
Participants thought that the proposals for a new system might lead to the following outcomes:


Greater consideration of university choices: Full time students believed the proposals for a new
system would mean that prospective students would give greater consideration to which course and
which university to choose, as a result of the potential changes to tuition fees and maintenance
costs.


For most students the proposals would not prevent them from attending university. Participants
welcomed the increased support available for students on lower incomes and most are prepared to
incur additional levels of debt in order to attend university.


Debt averse students choosing poorer quality courses: Students thought that the potential changes
to tuition fees could result in some students (in particular those from lower socio-economic
backgrounds) choosing less expensive courses which may be of poorer quality. Most, however,
believed that the rise in tuition costs in itself would not change the course which students intended
to study since this was one of the main reasons for going to university.


More students staying at home: Students thought that the potential changes to maintenance costs
were likely to result in greater numbers of students living at home and studying at a local university
due to students and/or parents not being able to afford to finance the cost of living expenses. Some
students said that they might delay going to university by taking a gap year to finance their study.
Others said that they would get a part time job, although some were concerned that this could affect
their ability to study for their degree. Students and parents thought that this would result in an
increased demand for places at local universities, which could result in some students not being able
to go to university.


An increase in part time university students: Most part time students believed that the proposals
for a new system would encourage more part time students to enter into higher education. Having to
pay tuition fees up-front was a currently a key barrier to part time students accessing higher
education and the ability to receive a loan to pay for tuition fees was perceived to remove this
barrier. Access to additional maintenance grants was also perceived to reduce the financial barriers
in terms of travel, childcare and other costs.




Opinion Leader                                                                                     66
Participants’ suggestions for changing the system
Participants made the following suggestions for changing the system:


Suggestions made by many participants
Grant allocation based on ability to pay: Many participants believed that using household income as
the primary basis for deciding the extent to which students receive a maintenance grant was
problematic since this did not necessarily reflect their ability to pay towards maintenance costs. This
was due to a perception that people with higher household incomes could have higher outgoings e.g.
mortgage, loans, cars etc. Participants therefore thought it was essential that the means testing
system for establishing the amount of maintenance grant received by students took into account
more than household income, to include factors like number of children, disposable income etc.


An independent body to regulate variable fees: Some parents and students thought there was a risk
that if universities were able to set their own fees for courses, they would charge what they thought
students would pay rather than charging an amount which accurately reflected the cost of the
course. Participants therefore wanted a high degree of transparency about how course fees were
calculated in order to ensure that students were receiving good value for money. Many believed that
an independent body should be set up to regulate course fees to ensure that they offered value for
money.


Subsidies for courses in the national interest: Many participants agreed with the sentiment that
spending on education needed to deliver the most beneficial outcomes for the country. Many
therefore believed that the courses which were most beneficial to the country, e.g. medicine,
sciences (and students studying these subjects), should continue to receive additional support from
the government, for example, through government subsidy of courses and/or students.


Suggestions made by a few participants
Loans preferred to grant: Some participants would prefer to have access to a larger loan rather than
a smaller grant, especially if their parents earned over the £25,000 threshold for receiving the full
grant. They believed that maintenance loans were fairer than grants since they reduced the onus on
parents to contribute towards maintenance costs, even though they increased graduate debt. This
option would enable those whose parents were unable to afford to contribute to maintenance costs
to attend a university away from home.


Student contracts: In order to justify higher fees, students expected their university and course to
deliver them additional value. Some thought that universities should be encouraged to enter into a
contract with students to set out what students could expect from a course and to offer options for
redress if the course failed to deliver these.




Opinion Leader                                                                                      67
Participants’ suggestions for improving their understanding of the proposals for a new
system (suggested by many participants)

Personalised information on how the system affects them
Students and parents wanted clear information about how the current system and proposals for a
new system worked. Currently, students and parents used a wide range of information sources but
there was no single source of information which was perceived to provide personalised information
about how the system affected them. Students and parents wanted a central source of information
that they could use to find out how the new system would affect them. We suggest that the
Direct.gov website, which has information on the current system and the student finance calculator,
could be promoted as the key place to go to for information about student finance. It was found that
very few participants were aware of this website as a source of information about student finances.


Comparative information needed to compare courses
With the introduction of variable fees, students say that they would need to give greater scrutiny to
which course to choose, taking into account location, university, value for money etc. In order to
make a more informed choice about the relative value of different courses from a range of
universities, students and parents say that they need to have detailed information about how the
courses compare in terms of the key aspects which were important to them e.g. average graduate
salary, contact time, quality of teaching, quality of facilities etc. A standardised way of collecting and
publishing this information would enable students and parents to make an informed choice about
which course is right for them.


Promotion of graduate benefits to part time students
Most part time students were currently unaware of the support available for part time students. It is
essential, therefore, to raise the awareness of any new system amongst this group. Many part time
students were not aware of the financial and non-financial benefits which graduates were more
likely to reap and believed that if this information was more widely available, it would encourage
greater numbers of people to study part time. Part time students suggested giving information to
school leavers at school as being the most effective way of reaching this group.


Key demographic and socio-economic differences

Full time versus part time students
-   Tuition costs were the main barrier for part time students in accessing higher education, whereas
    for full time students, there were broader financial concerns around debt and living expenses
-   Full time students were far more aware of the current funding system than part time students.
    Many part time students were unaware that funding was available to support some part time
    students
-   Part time students responded positively to proposals for changing the existing higher education
    finance system since this was perceived to give them a ‘better deal’ than the current system.

Opinion Leader                                                                                         68
    However full time students perceived proposals to be less fair, offering less support than the
    current system


Students versus parents
-   Whilst full time and part time students expressed concerns about debt, they were overall less
    likely to be concerned about this than parents


Socio-economic differences
-   Parents from C2DE households were more likely to expect their children to help finance
    themselves at university with a part time job than BC1 parents
-   First year HE students from C2DE households were also more likely to have part time jobs than
    BC1 students
-   Whilst most students across socio-demographic groups preferred the option of increasing the
    amount of funding from sources other than the government, some students from higher socio-
    economic backgrounds were more likely to support a reduction in the numbers of people
    attending university than students from lower socio-economic groups
-   Students and parents from lower socio-economic backgrounds were more likely than those from
    higher socio-economic groups to say that they would opt for a less expensive course if variable
    fees were introduced. This is despite them being aware of the proposals for improving the
    maintenance package. Others were prepared to pay for more expensive courses to get a better
    degree. Those from higher socio-economic groups were more likely to be prepared to pay a
    premium for a better quality course.




Opinion Leader                                                                                  69

				
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