Select Committee on Education and Employment Minutes of Evidence



Examination of witnesses (Questions 342 - 359)

WEDNESDAY 31 JANUARY 2001

PROFESSOR CLAIRE CALLENDER, MS CAROLINE CALLAHAN and MS LINDSEY FIDLER

Chairman

  342. Good morning, everyone. Can I thank Caroline, Claire and Lindsey for coming. This is a formal session but we tend to handle these things reasonably informally. We are waiving titles today with the agreement of our witnesses. Can I say that we are now in the midst of our inquiry into student retention, having finally, yesterday, put to bed, I think we say, the report on access to higher education. At the moment we are looking at what we see as the logical next step. In a sense, many of the questions we ask today will be about how we maintain a good record in student retention. We realise that we do have a good record compared to many other countries in Europe and, indeed, the United States, yet, there is some cause for concern. We are very grateful we have such a range of expertise, both in terms of having the NUS here and having Caroline, who was in charge of the MORI poll. I am going to ask Caroline what that poll exactly tried to get at, and Claire who produced a substantial piece of research on changing student finances. I tend to open the questioning, if I can start by saying Claire, the word has it, perhaps this is only a rumour, that you were a little upset, not upset, that you did not think that some of the press coverage given to your report really reflected the main thrust of the research findings. Is that true? If so, what is the disparity between press coverage and what you think is the essence of your report?
  (Professor Callender) To be honest with you, I do not think that is the most significant issue, the issue is the findings of the report and, on the whole, they were well reported. I would actually prefer to go on and talk about the substance of the report rather than the press coverage.

  Chairman: Could you give us an intro into what you think is the main thrust of the report?

Dr Evans

  343. Can I pick up on your first question? I did want to ask you about that, I would also rather talk about the findings. I wanted to ask you on this issue, whether you thought the DfEE press release, which summarised your report as "Spending Survey Shows Rise In Student Income" was a more accurate portrayal of the findings than your South Bank University press release, which had "Student Debt Has Tripled Since 1995/1996". Which, would you say, would lead to the more accurate and full coverage of the main thrust of your report?
  (Professor Callender) I think both of them are accurate. When we talk about the DfEE's press release, it is up to them to decide what is in their press release. Whether it reflects the overall findings of the report may be open to question. In terms of the particular headline that the DfEE ran with, namely the increase in student income, that is correct, that income includes money from student loans. This is an important point, because, in part, it reflects DfEE's thinking. I think it is fair to say that the DfEE perceive student loans to be income and not debt. It only becomes debt when a student leaves university and graduates. The issue is whether such a model of economic rationality reflects the reality of the way students think and behave. I think that is quite an important point and an issue for discussion. My concern is, although my study was not a qualitative study it was a quantitative study, there is enough evidence from the data to suggest that students view their loans as debt, they do not view loans just as income. My concern is the way in which debt and the build up of debt may affect widening participation. I know you said the Committee had put the access bit of your inquiry to bed, but my starting point is very much about how we widen access and improve participation. My concern is the extent to which changes in government policy, in terms of student funding, may in some way militate against that overall objective. That is my concern. It is because of the move from grants to loans that students have built up this substantial debt. My concern is about whether worries about debt, and thoughts about debt in advance of going to university, may deter some people. There is then the issue about what role debt plays when students are at university in terms of, for example, dropout. I think it is important to make these distinctions and to take on board my understanding of where the DfEE is coming from.

Chairman

  344. Your report really focuses on very much a transition period, does it not?
  (Professor Callender) It does, indeed.

  345. Some of the evidence we have had already, indeed some of the evidence we had in the previous inquiry suggests that the system we had in the past, the old system of student finance, actually did not get, even with maintenance grants, to that widening of participation in the areas we are very concerned about, the lower social groups, in terms of income. In a sense, it could be argued that the system we had before the system we have now is not really effective in getting that wider participation that most of the people in this Committee would like to see.
  (Professor Callender) You are absolutely right, if we look at the composition of the student body as a whole, the proportion of students from lower socioeconomic groups has not changed over time. When we had a full grant system there was not a particular emphasis on policies about widening participation. That is what is different this time round. My argument would be, in part, that if you did have a grant system for certain groups of students, such as those in the greatest financial need, and you had concerted policies aimed at widening participation, we may see changes. What I would argue is that under the previous grant system there was no particular thrust in overall policies towards widening participation.

Charlotte Atkins

  346. Do you think that students are frustrated by a lack of information about higher education, not just in terms of courses but also, what I pick up is there is a lot of confusion about the issue of tuition fees, and some of them think they all have to pay it. I am talking about the area which I represent, which is a very low income area. How do you feel about the information that actually gets to the prospective student?
  (Ms Fidler) There is quite a bit of evidence to show that students do not necessarily have all of the information they need, before they start, in terms of the cost of studying. That is one area that we quite often come across. The CVCP study, Making the Right Choice, actually found this, that students quite regularly underestimate the cost of study. One of the areas that concerned NUS is the issue of hidden course costs, ie trying to establish exactly how much it is going to cost to study over and above your living costs and the tuition fees that you might have to pay, ie in terms of photocopying, printing, books and equipment, field trips, et cetera, et cetera. That is not always made as explicit as it could be. There is certainly an issue in terms of students underestimating how much it might cost them to study. The issue of misunderstanding the means test was certainly found in the CVCP study, but that was in 1998 when the system was just up and running. I am not sure what Claire found in terms of awareness of how the student funding system operated.
  (Professor Callender) There was a fairly high level of awareness of student loans. There is always a problem about when you are trying to assess this particular issue because, understandably, what we find is that those people who actually had loans had a much greater knowledge about the student loan system. You and I would go and seek information when we need that information. The process of applying for a student loan will increase people's knowledge of a student loan, that is logical.

  347. What about first generation applicants? Do you feel they are not well served in terms of how to choose their course, for instance? We understand from the MORI report that the course was the main factor in choosing which institution to go to?
  (Professor Callender) Yes. Given I am coming from the stance of student funding—one has to also think about the way in which the changes to student funding may be dictating what university students go to. These are some of the spin-offs, indirect spin-offs of changes in student funding. What we are seeing is a marked increase in the number of people living at home. In all probability, they are living at home in order to avoid taking out a grant or as a way of trying to reduce their overall costs. Once young people make the decision to live at home, by definition their choice of institution is going to be limited because they are going to go somewhere within easy travelling distance, they will then choose the course that they want. I think this is another somewhat hidden development that is happening as a result of students having to bear the increase in costs of attending university.

Chairman

  348. Is it a bad thing? An enormously large number of people are going into higher education now. There is no doubt that many people in other countries see it as quite bizarre that our children travel hundreds of miles and to distant countries to attend university. Is it not just adding to the diversity that a lot of students would like to stay at home and study, for all sorts of reasons?
  (Professor Callender) My concern is where the choice is being driven exclusively by financial considerations. Of course, it is the student's choice to study wherever they want to study. If they have no choice, ie the choice is being denied them because of financial considerations, then I would think we need to worry.

  349. The research shows that poor students are staying at home and at local universities and better off students go further away.
  (Professor Callender) That is right. That is my concern. There are some that would argue that part of the university experience is growing up and being away from home. That may be a middle-class perspective. In my early days when I first started lecturing, rather many years ago, when I used to do induction sessions for would-be prospective students, I would say to them, "If any of you live in this home town", which was Cardiff at the time, "if any of you live in Cardiff leave the room", ie part of the higher education experience at that time was also about being away from home, independence, socialising and new interests in a very different environment.

Charlotte Atkins

  350. Would you not also say that one of the problems about encouraging access to higher education is we do not approach prospective students early enough. If we take one particular year, Year 8, when students are 13, there would be much more opportunity to think about how to finance future stays at university, also, before they took their GCSE options, so they would not be so boxed-in on how they decide on what course they want to do later on. Given increasingly that universities look at GCSE results to decide on who there students will be, do you think universities should be doing more, especially for the non-traditional student, looking at Year 8, which, let us be honest, is like a gap year in many systems, certainly in the middle school system, and we should be using Year 7 and Year 8 when students are 11, 12 and 13 to encourage students to think about higher education and think about their options at a much earlier stage.
  (Ms Fidler) There is a need for more outreach work from institutions. A barrier to participation is that transition into higher education. Where institutions do have effective outreach policies with students their widening participation pack does seem to be working better. There is a need for that transition arrangement. The other issue there is that it needs to carry on when they get to the institution. I do not think it is enough to start it at Year 8, it needs to go through while they are studying to ensure that the culture of higher education is not off-putting once they get there. The finance issue is on top of the cultural barrier and I do not think it is easy to separate one from the other, you have to look at them together. I do not think you can put more emphasis on one rather than the other.
  (Ms Callahan) A fifth actually said that their choice of university was because it is close to their family. Obviously that differs between sub samples groups. Of those living at home their current debt is lower than the average student and they anticipate owing less.
  (Professor Callender) That is because they do not take out student loans.

  351. That 20 per cent who decided to stay at home, was that because of financial reasons?
  (Ms Callahan) Not necessary. It is higher among mature students and those taking an HNC and HND.

  352. What percentage of that 20 per cent do you say do so for financial reasons?
  (Ms Fidler) The MORI study said that 31 per cent who live at home would have lived away if they were given a grant. 23 per cent would have lived away if they did not have to pay fees. There is a percentage that stay at home for financial reasons.
  (Professor Callender) I have done some fairly sophisticated analysis on the take-up of student loans. My analysis compares students of similar characteristics. Basically if you take two students that have similar characteristics, certainly those that live at home are far less likely to have taken out a student loan, hence the MORI finding and, our finding that they are less likely to be in debt. In fact, students who live at home are the only group of students who are likely not to have any debts at all, and to have more in savings than they had in debt. That was the only student group of all the students that we surveyed.

Chairman

  353. How does that play into retention? Have you any figures on these students who stay at home, that it is more likely to encourage them to stay on in university and complete their degree or is there more of a problem with retention if those same students go away to college?
  (Professor Callender) I have the data, I have not done the analysis.

  354. That would be very useful to the Committee if we knew, taking Charlotte's question, what the impact is on retention?
  (Professor Callender) Can I just say something about my study and retention. It was not designed to look at dropout, just as it was not actually designed to look at the effect of changing student finances on participation. We only interviewed students who were in the system, this is terribly important.

  355. You only interviewed—
  (Professor Callender) Students who were in the system, ie they overcame whatever psychological or financial barriers there may be in terms of participation, and if they dropped out of the system we did not pick them up because we are only interviewing current students. I would like to make another point, from an academic perspective, but also from a policy perspective. We do not have any research which has looked properly at the issue of the impact of changing student finances on participation, ie access, or the impact of student finances on dropout. Let me explain why that is the case, why we do have studies on those sorts of issues. If you want to do those studies properly and really look at these issues you have to do two things. You have to look at and compare those people who are in the system with those people who are not in the system. Similarly, you have to compare those people who have dropped out with those who have not dropped out. Basically, in order to do that, what one needs is data that tracks people over a period of time. In this country we have no data sources that can do that. No institution, whatever it be, HEFCE, DfEE can actually do this research, because it cannot be done in this country, at this moment in time.

  356. We will be asking HEFCE about that in the next session.
  (Professor Callender) Or DfEE. I do not want to point fingers.

  357. HEFCE are coming in later.
  (Professor Callender) This is a terribly important point, this is unlike the United States. We really have a poverty of information in trying to get at the issues that you want to get at.

Charlotte Atkins

  358. It was a point about the United States I wanted to raise. Why do you think there is less resistance to building up debt in the United States than there is here? Is it because we are really through the transitional stage and that in the recent past we have had grants, but in the future it will be accepted that students build up debt.
  (Professor Callender) There are several very important points there. Firstly, the nature of the loans within the United States are very different. The concern about the impact of financial support on access and dropout is much higher on the American agenda. It is much higher for several reasons. I will pick up three reasons, firstly you have a market mechanism. If institutions and if states are going to invest money in trying to attract students, they have to know whether or not investing in grant aid is going to pay off. Secondly, they have had a much greater concern about equal opportunities which, therefore, means that there has been much more interest about what happens to low income groups and what happens to different ethnic minority groups as a result of student financial support arrangements. Finally, they have the databases, which allow them to track what happens to a kid from high school into university and beyond. I think that because market mechanisms have had a much stronger role to play within the United States that loans are, to some extent, more acceptable, but only to some extent. When you look at American literature, I have done that fairly extensively and look at the impact of the loan system, there are some very, very important and significant findings. When you talk about the Americans being happy to take up loans, they are not necessarily happy to take up loans, certain groups are not. There is very strong evidence to show there is debt aversion amongst low income groups within the United States. From the research in the States you can look at, not only how the student finance impacts on different groups in society, but also you can look at what type of student funding has what what type of effect. You can distinguish between loans, grants and tuition fees. You have a level of sophistication in that American literature that you cannot find in the UK. You have to tease out those different bits. Grants, for example, are perceived to be the best way of encouraging students into the system and the best way of retaining them, as against loans. The point is that students look and respond to a set of prices rather than a single price. Different students with different levels of need will respond differently to tuition fees. You cannot make a sweeping statement, "In American it is all A Okay", because with certain groups it is not.

  359. If they has a choice would they rather have lower quality teaching or would they prefer to have grants? If you look at that choice, you are saying that the American research is very good, can you pick out from that American research the trade off between paying for their education and the quality of that education?
  (Professor Callender) You can look at it in terms of the type of institutions they attend. Financial issues have a considerable impact on what sort of institution they choose to attend, ie that the lower socioeconomic groups will be under represented at the more prestigious universities because of funding.


 
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