HE funding policies and Widening Participation in HE: A UK perspective

1. HE funding policies and Widening Participation in HE: A UK perspective Lorraine Dearden (Institute for Fiscal Studies and Institute of Education)

2. Outline 1. IMPACT OF HE FUNDING SYSTEM ON PARTICIPATION • How does HE funding work in the UK and what is its impact on participation? 2. WIDENING PARTICIPATION • Why is there such a socio-economic gap in HE participation and how can we narrow this socio-economic gap?

3. Current HE funding arrangements – 2008/09 • Fees of up to £3,145 for which a subsidised student loan is universally available • Means tested Maintenance Grant worth up to £2,835 (not repayable) • A Student Loan for Maintenance - worth up to £4,625 if living away from home (slightly more if study in London) • Bursary of at least £315 for those paying maximum fees and getting full Maintenance Grant (provided by HE institution) • All loans paid back after graduation at 9% of earnings above £15,000 • Written off after 25 years • Can take up to 5 year holiday (loan term extended) • £15,000 not uprated with inflation cf all other support • Significant tax payer subsidy involved with these loans

4. HE funding arrangements over time • Funding arrangements have changed constantly over the last 20 years and this looks likely to continue • Broad consensus that all the changes that have occurred have had little impact on HE participation and in particular on participation rates for lower socio-economic groups • But lots of changes tend to happen at the same time and most analysis does not try and disentangle the impact of different elements of the reforms • E.g. recent UUK paper suggested that impact of introducing fees in 2006/07 was zero, when really meant that the impact of changing fees, loans and grants in 2006/07 was zero • Important point when considering policy changes for the future • But still substantial gap in the HE participation by socio-economic status

5. 1. Impact of Funding Arrangements • Work carried out by IFS and IOE (Dearden, Fitzsimons and Wyness) has tried to disentangle the effects of various elements of funding reforms over the last 15 years using data from the LFS • Still ongoing work and haven’t analysed the 2006/07 reforms • Data for this only just become available • Can only look at impact of reforms on individuals aged 18/19 (because of data limitations) • We rely on huge variation over time for different types of potential HE students • Use a number of approaches to try and find the causal impact of the reforms using this variation over time and across UK countries • Don’t have a clean policy change that was available for a lot of Susan’s work

6. How the reforms affected each income group Low income Medium income High income

7. Broad Findings • Introducing up front fees and/or abolishing grants in 1997/98 had impact on HE participation BUT • For low and medium income groups this was wholly offset by increase in generosity of student loans • Small decline in participation for high income groupsas loans did not offset cost of upfront fee • Impact of increasing/decreasing loans and grants similar (not significantly different) • As long as increase in fees and/or decrease in grants accompanied by a commensurate increase in (subsidised) loans there is no effect on HE participation • But Fees do have impact on participation

8. 2. Widening Access to HE • In UK children from poor backgrounds remain far less likely to go to university than more advantaged children • This widening in socio-economic inequalities in higher education participation occurred in 80s and 90s • (Blanden and Machin, 2004; Machin & Vignoles 2004; Raffe et al. 2006) • Why has this happened? • Where and how do we intervene?

9. ESRC research using longitudinal administrative data • Administrative data on all state school pupils from age 11 to age 19 • Age 18 in 2004/05 • Data on HE participants AND non-participants • Know their family background and achievement throughout school

10. Allowing for prior achievement: 15 3 13 5 10 6 63 86

11. Raw socio-economic gap in HE participation rates at age 18/19 for females (left-hand panel) and difference after adding in controls (right hand panel)

12. Raw socio-economic gap in HE participation rates at age 18/19 for males (left-hand panel) and difference after adding in controls (right hand panel)

13. Raw ethnic gap in HE participation rates at age 18/19 for males (left-hand panel) and difference after adding in controls (right hand panel)

14. Key findings on HE participation • Once we allow for prior achievement, poorer and richer students have similar HE participation rates. • If disadvantaged pupils improve in secondary, they are as likely to participate in HE as their advantaged counterparts • All Ethnic minority students are more likely to participate in HE than Whites (even in raw figures with exception of Black Caribbean and Other Black students).

15. Quality of HE provision • Once we allow for prior achievement small, but significant, socio-economic gap in participation in high status institutions • Black-Caribbean, Bangladeshi and Other Black tend to access less prestigious institutions • Chinese, Other Asian and Mixed ethnicity access more prestigious institutions

16. What type of state intervention? • Intervention needs to be early and needs to tackle low achievement in schools • HE funding policies can only play a small role in reducing socio-economic gap in HE participation • Better advice and guidance earlier on • Maintain expectations between the ages of 14 and 16 (when big changes occur)

17. Low achievement • Poorer students attend lower quality schools • Access – who gets into “good” schools • Gifted and Talented schemes across schools • Standards – all schools should be “good” • Improving teacher quality important • Incentives for schools to focus on HE • E.g. HE outcomes in secondary school league tables by HEI status/subject

18. Advice and guidance • Still need to address the issue of advice and guidance • Particularly on type of HEI • Accountability in the system to ensure good advice • like idea of HE participation rates in school league tables • Simplify admissions to university • One admission test? More detailed measure of A level results (use some sort of SAT to take guess work out of quality of A levels?) • University offers only made when actual results are known?

19. What kind of HE do we want? • The conundrum Put the onus on universities Lower admissions standards Put the onus on schools Higher academic standards/better advice