Why it is wrong to splurge on student support

By A.G. | LONDON

THE University of Oxford today became the fourth English institution to announce the level of tuition fees it will charge from autumn 2012, and the first to detail how students from poor families will pay less.

In an open letter, Andrew Hamilton, vice-chancellor, said that while students from families with an annual income of more than £25,000 ($40,000) will be charged the maximum sum permitted by government, namely £9,000 per year, those whose parents brought home less than £16,000 and were thus in the bottom quintile in the earnings distribution will pay just £3,500 to cover their first year and £6,000 per year thereafter.

The University of Cambridge, Imperial College London and the University of Exeter have all said they will charge full whack for tuition, with yet-to-be-announced subsidies for students from low-income families. None of the monies, at Oxford or elsewhere, must be repaid until after the students have left university and are earning an annual salary of more than £21,000.

Tuition fees were introduced because, as more and more young people entered higher education, the need to reduce the state's share of the bill became more and more pressing. Just weeks after becoming prime minister in 1997, Tony Blair was handed a blueprint for asking students to contribute towards their university education, which had been commissioned by the previous Conservative government. Amid great outcry that poor families are more debt averse than rich ones (and there were some studies that supported the claim), the new Labour government introduced tuition fees in 1999.

What happened next shows that such fears were misplaced. The introduction of tuition fees was followed by a small blip in the popularity of university, as youngsters attempted to secure a free place, leaving fewer to apply the following year. Since then, however, demand has increased almost unrelentingly, with the exception of a second small blip, due to the same reasons as the first, when tuition fees were almost trebled to £3,000 in 2006. Now the fees will be tripled once again in many institutions. (Vice-chancellors of England's 130 universities and colleges have until April 19th to fix their fees for 2012, as I wrote in the current edition of the paper.)

For all the continuing chatter about debt aversion, I suspect that Oxford has failed to strike the right balance with the package it has outlined today. Right at the end of Mr Hamilton's letter is a box detailing the university's proposed spending on various forms of student support. It has three categories: financial support for existing students; outreach to raise the aspiration and attainment of potential students; and support to prevent existing students from dropping out of university. It shows that the university currently spends 55% of its investment in student support on financial measures, which it proposes to increase to 63%. Meanwhile spending on outreach will fall from 22% to 18% of the total, as will spending on retention.

Now I know that the coalition government recently pulled the plug on the AimHigher programme, which was supposed to encourage state-school children to aspire to a university education. (As an aside, recent studies have found that an astonishingly high proportion of new mothers want their offspring to go to university, though grim reality hits by the time the little cherubs have reached school-leaving age.) It was incredibly cheeky for the government to then insist that universities both provide and pay for this work.

Yet it is precisely this sort of meaure that appears to make a difference. The reason why Oxford University takes just 55% of its undergraduates from state schools is firstly because it demands the highest entry qualifications, and students from outside the state system are more likely to achieve these. However that is not the whole story: if it were, then the university would hit its benchmark of taking 70% of students from state schools. The discrepancy is mostly down to the fact that fewer state-school pupils apply to elite institutions than do their privately educated counterparts.

Many potential state-school students have already ruled themselves out of Oxbridge by making poor subject choices before applying for higher education. Others have been dissuaded from applying by hidebound teachers and careers advisers, who deter them from aspiring to such things. Those that do apply tend not to seek financial advice until the final stages of their application or later. Throwing money at successful candidates utterly fails to address the underlying problems.