From Hardship to a Helping Hand - guest essay

From Hardship to a Helping Hand: it is time for Universities to rethink Student Money Support

Introduction

 “Yours Sincerely, Oliver Twist!”

This is how a student signed an email to me in my role as manager of a Higher Education (HE) Money Support Service. No doubt, his was tongue firmly in his cheek but he was letting me know how he felt about coming to me for a handout.

At that time, I was facilitating a steering group, leading the Personal Finance strand of the University Wellbeing Strategy. Meetings took place in a building once occupied by Emmeline Pankhurst circa 1894 in her role as a Manchester Poor Law Guardian(Worthington, 2002). What would she make, of hardship handouts, not in the street of Victorian England, but in seats of world-class tertiary education in 2018?

“Hardship“ has become embedded in the parlance of the HE sector. The affordability issue grew over the years, as government attempted to shift the opportunity of tertiary education from the privileged few into the reach a third of 18 year olds (UCAS, 2017).

However, “hardship” need not be an inevitable consequence of wider participation. HE institutions should shake Dickensian undertones and move away from providing support under the banners of Hardship, Crisis and Emergency. Instead, they should focus on raising money confidence of students. They should promote money knowledge, resourcefulness but, more importantly, self-awareness into personal attitudes to money. HE institutions should consider incentivising engagement with money support services and, instead of topping up incomes, use funds to help students build up assets.

Historical Context and Time to change

In 2004, the government introduced the Access to Learning Fund (ALF) replacing pre-existing hardship Loans and grants. This change was prompted by the Higher Education Act 2004, which introduced variable higher tuition fees (UK Government, 2004). The aim of the ALF was to provide “simpler and more transparent arrangements for students in financial difficulty (Department for Education and Skills, 2003).

 For 2013-14 alone, a £37 million budget was allocated to the ALF nationally. Multiplied by the ten years it ran, this was quite an investment in hardship. Over those ten years, institutions reported back annually with head count data. In 2014, funding was withdrawn, leaving institutions to their own devices. Most have continued to provide hardship schemes administered using a version of the former ALF guidance.

If the ALF was introduced in response to concerns that fee increases may deter those from low income backgrounds from entering HE, then time has proven the worry unfounded. The Department of BIS 2014 report “National Strategy for Access and Student Success in Higher Education” stated

“UCAS data shows that, between 2012 and 2013, application rates for 18-year-olds to fulltime undergraduate courses have increased by one percentage point to 35 per cent. It also reports the highest recorded rates of applications from people from disadvantaged groups – continuing a pattern of substantial increases over the past 10 cycles.” (Department Business for Innovation and Skills, 2014)

In those 10 cycles, no attempt was made by government to explore the difference ALF made to the millions of funds recipients. Emmeline Pankhurst, writing in her memoirs of the Poor Law Guardians, could almost have been describing the ALF accounting process when she wrote:

“I found that the law was being very harshly administered. The old board had been made up of the kind of men who are known as rate-savers. They were guardians, not of the poor but of the rates”. (Pankhurst, 1914) .

The government has arguably changed their stance as they now call for “a robust approach to evaluation,” so the sector understands “which of their activities have the greatest impact on access, student success and progression”(Department Business for Innovation and Skills, 2014). With little historic data to steer them, it must hard for HE institutions to decide whether it is strategically wise to continue to invest in money support.

However they do now need to decide their own strategy on money support; devise their own rationale and priorities and, more importantly, evaluate outcomes and impact. Instead of being “rate savers” focusing on good hardship fund accounting, attention should be on meaningful interventions that benefit students and fulfill strategic aims of retention, progression and success.

Financial Capability – whose job is it anyway?

One might object here about whether responsibility lays with universities to deliver money support. The government provide the statutory funding and plenty of supporting guidance. Help is available via independent agencies too, for example, the consumer guru Martin Lewis takes a lead in championing student finance matters. It could be reasoned, that resources such as these should suffice in providing money guidance.  Surely if the issue is that statutory funding is not enough, then this is a matter for the central governments of the UK and not the universities role to provide a money top up.

Universities offering money support and Information Advice and Guidance (IAG) may in fact be failing in that responsibility. The National Union of Students Poverty Commission in their report “Class dismissed: Getting in and getting on in further and higher education” were scathing about HE providers, stating:

“there is a market in poverty: the tertiary education environment has either knowingly or unknowingly commodified class. It has generated specific income streams by monetising inequality and risk. This ‘poverty premium’ is endemic and is present throughout the various educational transactions, services and consequences relating to people from working class backgrounds.”

And that:

“Student loans are recycled into extraordinary profits for landlords and bus companies while students experience poverty.”(NUS Poverty Commission, 2018)

Universities of course are landlords, providing accommodation and charging rents which the NUS say are “exceeding what is affordable”. 

The assertions by the NUS suggest that HEIs are neither sufficiently independent nor impartial to deliver money guidance. The alternative of leaving money guidance to NUS affiliated advisers or third sector leaders such as Citizens Advice, would perhaps be better for students.

How could the provision of on campus money IAG be better for students? Well, a review of research on what matters to young people in terms of advice provision states:

“Young people want their advisers to specialise in working with young people […] Due to a strong sense of belonging and identity, young people tend to be far more comfortable getting advice from advisers who are focused solely on their age group rather than on the public as a whole. […]

They need a ‘powerful friend’ to advocate for them and “value the ability of their advisers to get things sorted out” (Kenrick, 2009).

Compared to non-student specific agencies, expertise could be claimed by HEI money support staff, who are members of the National Association of Student Money Advisers, which claims to be:

“… the UK’s leading experts regarding student finance and student money issues.” (NASMA, 2018)

Indeed, in spite of their criticism, the NUS poverty commission doesn’t ask for HEI to stop providing guidance but to simply “ensure information, advice and guidance meets the needs of learners not providers” (NUS Poverty Commission, 2018).

Students experience better outcomes when they have a sense of “belonging” and feel “supported and encouraged” in their day to day encounters with university staff (ARC Network, 2015). So the delivery of high quality money IAG within the HE institutions should arguably lead to better outcomes than if this help were provided off campus.

The government wants to “develop a more joined-up approach to the provision of effective information, advice and guidance through the schools and further education sectors and into and beyond higher education”. Rather than “static” IAG they want more personalised programmes of support, embracing the needs of the students and also their “parents, carers and other key influencers” (Department Business for Innovation and Skills, 2014).

If now is the time for HEIs to review their support fund provision; they would be wise to also look at their IAG model and the competencies of those tasked to deliver it.

Given the lack of ALF data, the HE sector could look instead towards the wealth of research carried out by the Money Advice Service (MAS) to inform its money IAG strategy.

 MAS have identified that young adults have a preference for receiving guidance from family, peers or near peers (Harrison, Marchant and Ansell, 2016). MAS have also identified money tips that young people respond well to. They guide that young people need IAG to be achievable, include calls to action, not be over simplified and that it also should be empowering rather than reprimanding(Malton and Clarkson, 2017).

Such research finding could help a university establish schemes such as peer money mentoring or guidance to help parents of students.

Of course not all HE students are 18 to 24 years old but MAS research embraces all segments of the population so their resources should serve as a useful toolkit whatever the age of the student.

Aligning to the national strategy of financial capability may help students see their money issues as part of a bigger picture and knowledge of the strategy provide a continuum for beyond graduation

What is Financial Capability?

If a University decides to deliver money IAG to improve financial capability, what does this actually mean? There does not seem to be a single universally accepted definition. Currently the MAS states that improving financial capability and wellbeing means “addressing all the factors that influence people’s behaviour around money: skills and knowledge, our attitudes towards money, motivation to take action, and the accessibility of financial services”. (The Money Advice Story, 2016)

Orton described a financially capable person as someone who “has the skills and confidence to be aware of financial opportunities, to know where to go for help, to make informed choice and to take effective action to improve their financial well-being”  and an “enabling environment” is one which “promotes the acquisition” of these skills (Orton, 2007). Perhaps financial capability requires “the use of pedagogical methods that enable people to practice and gain competency” (Johnson, E. and Sherraden, M. (2007). So, perhaps Financial Capability ought to be a taught option supplementing a student’s subject of choice. Then again, why should a university take on responsibility for teaching anything other than the courses their customers are paying for?

In reality, responsibilities like budgeting guidance are more likely to fall to university support staff than academics. Birkenmaier cautions that it is important such staff are “first financially literate themselves”(Birkenmaier, J. and Curley, 2009). “The Case for Financial Literacy” cautions against the real risks of delivering financial literacy badly(Robson, 2012). Appropriate competencies should be part of the job descriptions and training of any staff delivering money support initiatives.

 Universities need to decide exactly what money support services they wish to deliver, resource them appropriately and have robust signposting and referral strategies to other IAG providers for matters that fall outside their remit.

The Hardship Brand

It may be time to move away from hardship, crisis and emergency branding. Though conceivably, these terms add gravitas to the circumstances being addressed by the interventions and in turn add kudos to the support fund provider. Like any form of branding the product or service name brings with it some level of emotional connectivity, positive, negative or even ambivalent associations (Schmalz and Orth, 2012).

It could be that terms like a “Helping Hand” with money would convey a better message than “Hardship Funds”. Language that normalises money issues would arguably help fund applicants recognise how the money is actually meeting their need. Extreme terminology may infer an undue sense of seriousness, making a student feel disempowered and believe that without intervention by the university the money problem could not otherwise be resolved.

In their report Borrowed Years the Money Advice Trust provided evidence that 18-24 year olds are likely to worry about money matters, but there was  “clear evidence that a majority of young people are trying to budget and actively manage their personal finances”(Money Advice Trust, 2016).  Given that “managing money well, is important to young adults – ranking above having a job they enjoy, keeping healthy and buying a home..”(Malton and Clarkson, 2017), how likely is it that they would identify with being in hardship or crisis when they need some help? The language of hardship may play to a young person’s tendency to worry rather than encourage their positive attempts to manage money well.

Nudges, short cuts and self knowing

If it is true that there is little evidence that financial education actually alters behaviours (West, 2012), what other proven methods might work better?

The Financial Service Authority’s review of behavioural economics literature concluded that financial decision-making has stronger links to psychology than money knowledge (de Meza, Irlenbusch and Reyniers, 2008). Behavioural economics could be used to nudge students towards improved money management choices.

The government Behavioural Insights Team developed the MINDSPACE acronym. This guides that in order to influence behaviour one must consider the impact of: messenger, incentives, norms, default, salience, priming, affect, commitment and ego of those they wish to nudge.  Arguably, MINDSPACE methodology could be too complex an approach for small money support services. A simpler model called EAST, guiding that interventions be made Easy, Attractive, Social and Timely - could be more achievable. (Service et al., 2014). 

Work done by the MAS and Ogilvy Change (a specialist behavioural interventions agency) is outlined in their report “How to use behavioural science to increase the uptake of debt advice” (Heather, Eleanor Tatam, Sam Kinloch, Colin Chu, 2017). They suggest 10 top tips to nudge clients into better service engagement that any small money team could follow.

Alternatively, the answer may lie in heuristics, “rules of thumb” or mental short cuts to help solve complex issues. Some useful tips outlined in “Young Adults and Money Management: behaviours attitudes and useful rules of thumb” could easily be followed by student money support services (Malton and Clarkson, 2017).

Other research suggests that support services should incorporate “stress coping skills, and measures to address agency, or self-efficacy into the advice and support” as they may be important factors effecting money management behaviours especially when people are under pressure (McNair et al., 2016).

So it seems a little self awareness could go a long way. As stated in the article by David de Meza et al.: 

“Financial capability involves knowledge and skills, but attempts to improve these may not lead to better outcomes. What people choose to know and what they do with their knowledge may primarily depend on their intrinsic psychological attributes” (de Meza, Irlenbusch and Reyniers, 2008).

Is it actually worth the effort though, if the recipients own intrinsic make-up has a more significant influence on the outcomes than education? The answer seems to be yes, as having low financial capability has a detrimental impact on mental health. So attempts to promote financial capability could have “beneficial spill-overs on psychological health in addition to the expected benefits associated with reducing problem debt and welfare dependency and increasing savings and general skills”(Taylor, Jenkins and Sacker, 2011).

The government are calling for universities to “dramatically improve their mental health offering for students” (Department for Education 2018). So it should be worth attempting to improve financial capability for the knock-on mental health benefits at least.

What works?

The government wants evidence based evaluation in order to understand which interventions have the “greatest impact on student access, success and progression”(Department Business for Innovation and Skills, 2014). So how can this be measured?

Toynbee Hall (a leader in the fight against poverty since Victorian times) developed a resource known as the MAP tool to help evaluate impact. Agencies use the tool to monitor the financial wellbeing of the people they help. It is quite a detailed resource, so a less complicated tool might be better for small money teams. Citizens Advice developed a simple questionnaire, where clients score their own financial capability against set measures at the start of an intervention and then later, to monitor progress. (Grewal, 2017).

Gathering feedback would help with qualitative issues though this is a short term perspective and alone could make services appear to deliver a “sticking plaster remedy with no transformative effect”(Meakin, 2013). 

Monitoring retention and academic outcomes of students, who receive money support, could highlight the value of such interventions.

Tapping into the expertise and resources of agencies such as Toynbee Hall, Citizens Advice and the Money Advice Service would make it much easier for small university teams to have confidence that they were using well-researched methods and are in step with current money sector practice.

Incentivising asset building

The ALF was based upon the model used to calculate means-tested welfare benefits such as Income Support. Michael Sheridan argued that this minimum income approach to hardship represents a passive form of social policy that should be rejected as “social entitlement without [...] greater emphasis on personal responsibility” (Sheridan, Michael 1991). Instead of linking income levels to well-being, Sheridan advocated an assets based social policy, focused on "increasing the capacity of people to attain what they have reason to value". Such recommendations influenced the UK government which shifted toward asset based social policy, through the introduction of for example incentivised saving programmes to encourage financial goal setting.

The Money Advice Trust recommended that “Government should consider how to create opportunities for young people to save regularly and to be incentivised to do so “ (Money Advice Trust, 2016). Research suggests that financial worry and anxiety is decreased with increased savings levels (Lemos, 2013) and for positive outcome to occur the assets acquired don’t need to be large  (Brynner, J. and W. Paxton 2001).

The young Dreamers, Drifters and Planners identified by the MAS (Young Adults’ Financial Capability) do set money goals but they lack confidence. They focus on short term planning. They tend to want to keep things simple leading to a “(potentially false) sense of financial confidence in the present, but coupled with longer-term fears for financial security”(Harrison, Marchant and Ansell, 2016).

Young people have “save to spend” attitudes, along with a sense of the “future being a long way off” and “passive acquiescence” that things won’t happen to them. With respect to the personal responsibility that Sheridan advocates, many students “tended to defer personal responsibility to the future” (Harrison, Marchant and Ansell, 2016).

So with all this in mind, university money support should perhaps move away from the income support model of ALF. Instead they could incentivise engagement with IAG, support asset building habits, promote income maximisation, encourage saving for short term goals and longer term financial sustainability.

Conclusion

Universities must review their money support services and deliver in environments where students are likely to engage. The focus should be on building money confidence and knowledge about trusted agencies. Guidance should be provided not only to students, but also those who influence them such as their families. Near peer mentoring schemes should be considered and static information resources avoided. Attempts should be made to promote self knowing and increase insight into how one’s own intrinsic nature can impact money management choices.

The HE sector must shift from providing handouts or incomes top ups and instead promote asset building to help develop the future focus students. Most importantly, Universities need to build a body of evidence as to what intervention works and to begin to make up for the failings of the ALF era.

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