Raising the fee cap "would create a price market"

Posted by mjs76 at Sep 21, 2010 07:30 AM |
Important new market research from the University of Leicester provides an insight into what might happen in the UK Higher Education sector if tuition fees rise.

Lord Browne, a crossbench peer and President of the Royal Academy of Engineers, is currently overseeing a Government review into university funding which is expected to recommend changes to tuition fees and a possible increase. Earlier this year, the University of Leicester commissioned a survey of university applicants to examine what might happen if this came to pass.

Higher tuition fees would dissuade some people from applying to university – but not as many as some previous studies had suggested. Increasing the home/EU fees to £7,000 (from their current level of £3,290) would raise the percentage of potential applicants rejecting university from 6.3% to 10.3% if all universities moved to the limit of the cap. These figures were slightly higher among applicants from lower socio-economic groups but the overwhelming majority of students would still seek to attend university.

A stronger trend in the results indicates a ‘flight to perceived quality’. In other words, significantly more people would apply to ‘prestigious’ universities – which could create shortfalls at other universities.

A likely outcome of this ‘flight to quality’ is that those ‘other universities’ would try to compete on price. So instead of pretty much everyone charging the £3,000 maximum across the board, as now, a £7,000 cap could see many courses actually charging considerably less than the maximum in an effort to maintain their share of preferences. This raises the very real possibility of a university price market.

Or rather a course price market, as the survey results indicate that the percentage of applicants deterred by higher fees varies enormously across subjects. Arts and humanities applicants, for example, were more likely to be dissuaded by higher fees than aspiring medical students.

The survey was conducted for the University of Leicester by OpinionPanel, a specialist higher education market research company, who interviewed 730 young people about ten named universities. You can see tabulated results in the press release.

Richard Taylor, the University of Leicester’s Director of Marketing, said:

It’s encouraging to see the numbers in the survey still opting for higher education holding up – but we should not be complacent. We have a particular interest as Leicester is the most inclusive of Britain's top-20 leading universities with the greatest proportions of students from under-represented groups. A university education remains a good investment; the average gross additional lifetime earnings for graduates are £160,000."

The University’s Vice-Chancellor, Professor Sir Robert Burgess, added:

Increasing fee levels and creating a true market is only desirable, however, if supported by a comprehensive system of bursaries and scholarships to ensure that students from poorer backgrounds or families with little or no experience of higher education are not disadvantaged.”

The University of Leicester asked our Students’ Union to comment on these results. They said:

The Students’ Union and the NUS oppose the introduction of increase tuition and move towards the marketisation of higher education. Proposed projected fees increases of £7,000; the average student is looking to graduate with an estimated debt of £32,992 (based on 2010 living costs). When taking into account that the estimated premium of lifetime earnings of an arts graduate is only £34,494, suddenly the economic argument of attending University weakens. The Union believes that the pursuit of academic study and research should be the intrinsic motivation for entering higher education and refuses to support any action that alters students’ deciding factor of which course a student applies for towards ability to pay rather than academic factors.”

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