Levitate Student: How have HE courses been Funded - Tuition Fee Funding Funnel

Follow the link to our  England Tuition Fee Funnel presentation for a simplified explanation of the changes over time and the source of Higher Education Undergraduate Tuition Fee Funding in England.

It may take a few seconds to fully load.

Is Gimme a Tuition Fee Discount a pointless debate?

Levitate Student has written a number of times about our dislike for tuition fee discounts and fee waivers. (See for example Money Smoke and Mirrors )

Fortunately, fee waivers are less common than they were a few years ago since prospective students and their families have become wise to the very limited value they offer (especially to those students reliant on both the Tuition Fee Loan and Maintenance Loan to support their studies). Hopefully, the days have passed where Higher Education Institutions (HEI's) would wrap a pretty worthless, fee-waiver-shaped, carrot in gold leaf and dangle it before the academically able, in order to entice them in to the uni's allocated uncapped student number.

Fee waivers hit universities and colleges where it hurts anyway - their own pockets. Reducing the fee reduces the loan income from the funders, so the institution has less money to deliver services with. Let's not forget that, when the government introduced the so called variable tuition fee, the whole sector (give or take a few exceptions) opted to charge the maximum they could, across their full undergraduate curriculum. 

Over the last decade or so higher education (HE) providers have shifted to calling to their students "customers". Sending staff on customer service training and striving to attain Customer Service Excellence stamps of approval. It has been an uncomfortable shift in some quarters and not uncommon to hear staff grumble about these "darn students with their high expectations as to what they get for their £9,250". I mean how dare students feel empowered to complain!

Of course, one could argue that, with respect to income into HEI's, the amount of money in the envelope is the same as always - all coming from the government but just in a different way than before (see Funding Funnel for a bit of a clumsy potted history on this). The money in that envelope is what the sector relies on to thrive and flourish, pay their workforce, deliver academic excellence, provide facilities and drive innovation and research. The benefit to the economy, employers and society of an educated and skilled flow of graduates is not under debate in this blog post.

The government shifted the responsibility for the tuition fee loan onto the student for a number of reasons. One was to allow for no upfront fees . This eased the burden on the better-off mum and dad who had previously had to pay their students fee up front. By raising the tuition fee to a level of £9K+ meant that even the better off would struggle to manage without taking on the fee loan. Thus bringing those better-off students into the funding system of income contingent repayment, where the higher earners, beyond graduation, would be paying the most back to the public purse over time. "Progressive"! -remember? The better off became less likely to benefit from an easily affordable, subsidised higher education whilst avoiding the student loan system. Now they are more likely to contribute to the public cost of providing Higher Education alongside the less well off.

So once the student was taking on the cost of their own education, they felt more like an HE consumer. Naturally then. they had a changed perspective on course value for money. Successful or not, enjoyed it or hated it, this is a service many of these consumers will be paying for over 30 years beyond graduation, so they have a right to expect it to be good don't they?

Now Covid-19 has thrown a major spanner in the works and delivered an enormous blow to Higher Education. Not only has it had an impact on academic delivery for the 3rd term of the academic year 19/20 but also as far as the eye can see into 20/21. In addition, students' access to broader services and the whole "student experience" that they are lead to expect for the money has been thrown into disarray. Why wouldn't they expect the full service - look at the website and the glossy prospectus, this stuff is all in the price, right? 

As a consequence the media has been awash with shoutouts for discounts to the £9,250 tuition fee; not unreasonable given that the student consumer is not receiving what they signed up for or are in the process of signing up for.

Those who understand the nature of the income contingent student loan repayment system realise that, for those who rely on full funding for their studies, a slight reduction in tuition fees will have little or maybe no effect on the money the student will eventually pay back to the public purse. A little play on a repayment calculator (such as this one on www.moneysavingexpert.com) will help those who are a bit unsure as to why a discount makes little difference to get their eye in.

So are the media and students wrong to be baying for a fee discount? What is the point if a discount is worth so little in the long run? The model of students as customer paying a set price for a service falls apart when that service can not be delivered. The Tuition Fee income is vital to keep the sector from collapsing, to save guard jobs, but should a new student be expected to see this bigger picture?

So, is Tuition Fee discounting a "pointless debate"? Maybe.....but more general and perhaps more valid questions are, could current students be compensated for their reduced experience? Should prospective customers receive a meaningful incentive to continue to apply given the reduced offer?

Fee waivers are not worth much as we know, but a more tangible cash offer might be enticing. Some students arguably are receiving that now in the form of a 19/20, 3rd term accommodation fee waiver and the full payment of their 3rd term student finance. This offer though is patchy, depending on the student's accommodation provider. Those in private rented housing and especially final year students who receive a lower 3rd term Maintenance Loan are less likely to have benefited from this.

New students to the academic year 20/21, could be offered a monetary incentive to register and enrol this Autumn. Unlike a fee waiver this could make a real difference and make up for the wobbly start to their "Student Journey". 

A stepping stone payment could be the gesture of good will needed for those still brave enough to take the plunge, who are prepared to trust that their new HE provider will take a firm grip of their eager hand in these unsteady times.