Select Committee on Education and Employment Minutes of Evidence

Examination of witnesses (Questions 480 - 499)



Mr Marsden

  480. I am encouraged to hear that. You have talked about the relationship between research and teaching and the importance of that integration of the process. Would there not then be a case, as Professor Roger Brown and others have argued, for a joint assessment exercise of universities and of university departments which involved both teaching and research at the same time so that we did not have this apartheid in the system in terms of brownie points and perception in the world outside?
  (Baroness Blackstone) I would not rule that out but it is a matter for the sector itself to consider whether it would be less intrusive, less bureaucratic. There are complaints about that as far as both the RAE and the QAA work on teaching quality is concerned.

  481. It means you would then have one rather than two inquiries.
  (Baroness Blackstone) Yes, as long as you could do it in such a way that it did not impose an impossibly tough burden because you would be doing a single big exercise all at once, whereas the work done by the QAA and by the RAE is spread. The RAE is done at one time; the QAA also does it on a subject-by-subject basis, so you would have to think through the practicalities of that really and not end up with really turning a university upside down whilst you were crawling over every aspect of the work, which I do not think would be helpful.

Dr Harris

  482. Are you in a position to rule out the imposition of top-up fees by universities in the next Parliament, assuming you are still in power?
  (Baroness Blackstone) I think you asked me that question when I came to the Committee last time.


  483. He always asks it!
  (Baroness Blackstone) I will give you exactly the same answer as I gave you before. Top-up fees are not part of the government's policy: we have consistently said, both David Blunkett and I, that we are opposed to top-up fees for the reasons I gave you before, and we have taken out reserve powers to prevent top-up fees.

Dr Harris

  484. But you cannot rule it out?
  (Baroness Blackstone) Since the Teaching and Higher Education Act of 1998 no university has charged top-up fees; I do not expect any university to do so, and our policy has not changed.

  Dr Harris: I have been asked to ask you this again, because those were the same words you used—

  Chairman: We are supposed to ask our own questions, not somebody else's!

Dr Harris

  485. My constituents reminded me that, before the last election, that was exactly the same phraseology you used about proposals to introduce tuition fees and abolish maintenance grants for poorer students, so do so you understand the scepticism with which people greet your suggestion that you have no plans for top-up fees but you refuse to rule them out in the next Parliament? Surely you could rule them out, just to make me happy?
  (Baroness Blackstone) I will not comment on what was said in our last manifesto; it is not true but I do not think it would be helpful to go back into that. All I want to say, yet again, is that neither David Blunkett nor I are in favour of top-up fees. We do not think this is the right approach: it is not part of our policy. When we get to the general election, maybe we will be able to talk to you again but it is a little way ahead and I will let you know whether the government is prepared to rule them out or not in good time.

  486. I think that is helpful. Are you acquainted with the work of Professor Callender?
  (Baroness Blackstone) I am, indeed.

  487. Right. This was research done for the DFEE. She argued—and, indeed, their press release, and I raised this yesterday so you may have warning of this, suggested—that student debt has tripled since 1995/6. The DFEE press release covering the release just before Christmas said that a spending survey shows a rise in student income. How do you go from their version that student debt has trebled as the main finding to your version of a rise in student income as the main finding?
  (Baroness Blackstone) I do not think they are inconsistent at all. You can borrow more money and, therefore, raise your income by borrowing more money so there is no inconsistency, but let me just comment on the suggestion that student debt has trebled. Of course, student debt has gone up because, if you move from a system where you provided maintenance through grants as well as providing for student loans and then you move towards a system where you rely on a loan scheme, you are going to have students borrowing more money than they borrowed before. We have really, however, to look at this, I think, in a sensible, rational way, namely that the loan scheme is a fairer one than existed before; it is income contingent from the point of view of repayment; it has no real interest rate; and 75 per cent of students now take out a loan, which is a considerably higher proportion than was true in the past, so of course in that sense debt has gone up. But students are also spending more than they were, including spending more on things like entertainment and, if they want to borrow additional money over and above the student loan to cover the cost of entertainment and so on, that is entirely a private matter for them.

  488. The findings of this report included that 60 per cent of all full-time students and 40 per cent of part-timers reported that they thought that financial difficulties had negatively affected their academic performance, and that 37 per cent of all full-time students and a similar proportion of part-time students had not bought all the books they needed because they could not afford them and this rose to 67 per cent among lone parents studying full-time, and it is on the record from yesterday that one in ten of both full and part-time students have thought about dropping out for financial reasons. Now, that was in 1997-8 before your government removed the grant from those poor students who, under a means test, were getting grant and replaced it by a loan. Does this now give you pause for thought about whether it was wise to make these hard-up students facing these financial pressures more hard up by abolishing their grant?
  (Baroness Blackstone) We are not making them more hard up because the amount we are lending them is rather higher than the amount they had in total to cover their basic needs, which is what student support is about—it is not about paying for holidays, it is not about expensive entertainment, it is about providing an adequate income for a student to survive on without severe hardship, and I believe that is the case. Now, the Chairman mentioned the fact that we were at university together and I can say that when I was an undergraduate I had a perception that I was hard up. That has always been the case, and that was in a period when there were no loans whatsoever but a grant system. Students are always going to think that they are hard up because, by dint of being a student, they have to make some sacrifice in relation to the amount that they have to live on because they are investing in their future and their earnings will be very substantially higher as a result of becoming graduates.

  489. I thought the first part of your reply was astonishing: that is that, by taking the grant away from poorer students and replacing it with debt, you had not made them more hard-up.
  (Baroness Blackstone) No. I am sorry—can I just come in—?

  490. Just let me ask the question because I will give you a straightforward question to answer: if I were to take the money you have in your handbag there away from you myself and loan it back to you at a rate of interest, would you feel better off, worse off or no different? Would you be grateful to me or somewhat annoyed? I think that is the best analogy.
  (Baroness Blackstone) I do not for a moment accept your analogy. I think the point you were asking was whether these perceptions that you quoted about being short of money and feeling you were in financial hardship were ones that should make us think again about the scheme we have introduced. My answer to that is that I think students have always had these perceptions and they have always felt that they have to manage on a relatively small amount of money. It is true and it has always been true, but the whole point of the student support scheme is to provide students with enough to live on during the period in which they are students; not to provide an enormous, lavish, sum of money that would allow them to live in a lavish way, and the taxpayer would not allow us to do that—nor would any sensible government think that was appropriate. I know of no evidence to suggest that more students have dropped out as a result of the changes in the student support system that we have introduced. The latest figures indicate that around just over 17 per cent of students drop out and the figures for two years before that were just under 19 per cent so, if anything, there has been a small reduction in dropout rates.

  491. Nick St Aubyn made the point earlier which I concur with that, if you have not got an increase in the number of poorer students going in, you may have a self-selected sample and there is evidence from the DFEE's own research which I would like to quote to you to get your reaction. One piece of evidence is the research paid for by Professor Callender which states, in terms, "61 per cent of full-time students agreed with the statement that `Changes to student funding have deterred some of my friends from coming to university'. The proportion of students agreeing with this statement was highest among students from social classes IV and V (68 per cent), black students (68 per cent) and women aged 25 (68 per cent), the very focus of widening participation strategies." Does that trouble you?
  (Baroness Blackstone) I would be very troubled, I think, if there was clear evidence that, as a result of the reforms to the student support system, there was a reduction in the number of students coming from low income homes but there has not been and we have been monitoring this very carefully indeed—

  492. But there has not been an increase.
  (Baroness Blackstone)— so I would not be particularly worried about what are purely perceptions if the evidence about behaviour is very different. What I would also want to do, however, is to try to convey to students just what the actual facts are so that their perceptions might be somewhat modified by knowing what the evidence is.

  493. But I think we have some evidence that it is already happening. If you take mature students, which I think the government has accepted, and I would certainly support your efforts to say that we need more mature students because within that population are people from poorer backgrounds who missed out on the chance to go to higher education, there was some research that was published which eventually you put in the library that was presented to you on February 4, 1998 by Continental Research which said that a third of 202 respondents—these are mature students all aged over 25—said they were less likely to go to university as a result of the new arrangements being introduced in that summer. After that, you introduced the cut in grants. Are you surprised, therefore, that this year it has happened frequently—and we have commented on this before—that there has been a drop in the number of mature students at the age of 25 and over applying to go to university this year when everything else you say you want to do, and I support your aims, goes towards increasing the number of those mature students applying to higher education? Are you not disappointed and, if not, are you not complacent?
  (Baroness Blackstone) Of course, I am utterly committed to making it possible for the maximum number of qualified people who wanted to study in HE over the age of 21, which is the normal definition of a mature student, being able to do so but, if I could come back to what happened after we introduced the changes, both the introduction of tuition fees and, indeed, changes in the grant loan balance, first of all, very few mature students studying full time pay tuition fees and 85 per cent or more pay no tuition fees whatsoever. When the scheme was initially introduced, however, mature students—or potential mature students—were not totally aware of what was happening. It was more difficult to get material to them than it was to young people in FE colleges and sixth forms. There was a reduction in the first two years of the scheme, and this was something we were concerned about. However, when we looked into it—and I think I mentioned this to the Committee before—we found that quite a lot of that reduction is explained by a demographic decline in the numbers of people in their mid-20s which is where the largest group of mature students are drawn from; quite steep decline actually. A second factor which is certainly of very considerable significance is the very tight labour market and the fact that there are a lot of good, well paid jobs, more than there have been before, for people in this age group who have some qualifications—which they do. So those are two very important factors.

  494. Can I leave you with one example from my own constituency? This is from Harris Manchester College which caters specifically for mature students from poor backgrounds. The Principal there wrote to me on 22 January: "Over the past 5 years, applications by mature students to the university of Oxford have dropped by 23 per cent, and we believe this is largely due to the introduction of fees in 1998 and the phasing out and subsequent abolition of the maintenance grant in 1999. Prospective mature students often have financial and family commitments, and are unable to commit themselves to more loans [or debt] to fund their university study", and the drop is from 405 applicants in 1996 to 311 in the year 2000. Are you not worried by that in any way?
  (Baroness Blackstone) I would want to check the statistics that this letter is quoting before I really commented on them because they are not in line with national figures. I was just about to go on to say in my earlier response that the actual number of mature students wanting to study full time who were admitted to universities at the beginning of this session went up by 1.1 per cent so there has been an increase in the numbers applying. We have done quite a lot more in terms of additional help for mature students over the last two years especially for those who have dependants, and I think that must help in terms of their living costs, but we need to look at mature students also in the context of full and part-time numbers. There has been a continuing trend for mature students to prefer to study part time. There is I think quite a long-term decline in the number of full-time mature students as part-time opportunities increase, and as the economy and the job market has been so buoyant. I think overall, therefore, I am reasonably happy about the numbers of mature students that are coming in because you need to look at part-time figures as well where, of course, we have been able to hugely help part-time students compared with previous governments in that we have made the loan system accessible to them and, where they are on benefits or lose their jobs as part-time students, we have offered them fee remission.

Charlotte Atkins

  495. I think you have been in correspondence with one of my constituents who is a working class, very bright student who has gone to King's College London, and who has no access to parental support in terms of finances. Do you accept that there is a problem for some students going to areas where living costs are very high with trying to meet all those costs within the loan that is available, and would there be a case for extending the loan which is available at preferential rates to those types of students? I think he is left with something like £25 a week to live on in London which, even with very limited entertainment and eating, would be extremely difficult and I feel he would have to go cap-in-hand to banks at relatively high interest rates and, therefore, his loan repayments would be that much greater. Have you considered that?
  (Baroness Blackstone) I am very sympathetic to students in that sort of position and, as far as London is concerned, there is already a higher loan rate which is meant to take into account the higher costs of living in London. That needs to be regularly reviewed; I think it does genuinely reflect what the calculations are on the higher costs but perhaps it needs to be looked at again. On the issue of the student who is really finding considerable difficulty for those sorts of reasons, that was why we introduced the hardship loan so that a student could take out an additional loan if he were in financial difficulties and we are now also providing hardship funds for such students although we have asked that those should be focused especially on mature students, because they are the ones most likely to have high costs. Lastly, for students who come from backgrounds where there is no tradition of going into higher education and whose families are on low incomes, we are piloting opportunity bursaries designed particularly to provide start-up funds for the student who has to move, who has maybe to buy things like desk lamps as well as the normal costs of books, who may have quite high travel costs initially. It is particularly geared to the sort of student you have just described.

Mr Marsden

  496. I am glad you mentioned the opportunity bursaries and also that you mentioned the issue of student loans for part-time students. The majority of mature students are part-time and, as somebody who taught at the Open University for 15 years, the majority of my students would have been delighted to have had access to those loans. Going on to the opportunity bursaries, which obviously are a new and welcome innovation, how proactive can they be at linking in with other aspects of the government's educational policy in terms of student retention? Excellence in Cities obviously is a key part of that process but at the moment those areas which are included in phase 3 of Excellence in Cities are not eligible for opportunity bursaries. I understand the time lags involved in that but what can we do to speed up and dovetail the side of the government's education policy which is talking about encouraging students to go into university from secondary level and then supporting them and, therefore, reducing rates of dropout when they are in it?
  (Baroness Blackstone) Of course, they are a pilot; we want to see how effective they are. As and when we have the relevant evidence, it may well be possible to make this a national scheme. Meanwhile, we want to extend them and, in fact, the Secretary of State has announced today that they are going to be extended to education action zones.

  497. That is very welcome. You would not agree with Michael Bett who came before us last week and cited these sorts of things as "sticking plaster"?
  (Baroness Blackstone) No.

  498. You do see these pilots as a key part of the government's widening and retention policy?
  (Baroness Blackstone) Absolutely.

Mr St Aubyn

  499. The dropout rate for students from less well-off backgrounds who achieved at least three `B's at `A' level is less than a third of the drop-out rate of those from the same background who did not achieve such good `A' level results. Is this linked to the fact that they are less confident that when they have finished their degree they will reach the earning power that will make repaying their debt a problem-free challenge for them? In other words, given you have a threshold at which debt has to start being repaid of £10,000, do you recognise this might be a factor which, for those struggling with their degree, might mean they decide "Well, I am never going to earn enough or my prospects of earning are not sufficient that I should carry on ratchetting up this debt. I had better quit while I can pay off what I owe already", but if you had a higher threshold they can say, "Well, if I have to earn that much before I have to start repaying the debt, then I know I will be better off and I will go ahead and finish the course". In other words, do you recognise there is a real issue about thresholds, and is your government prepared to look at it?
  (Baroness Blackstone) I would be very surprised if a student making a decision not to continue with a course is getting into that kind of detailed calculation about when his earnings will reach a point which triggers repayments and then decide, "Well, as it is where it is rather than maybe £2,000 or £3,000 more", or whatever. I just do not think that kind of calculation is usually done in all my experience of working with students. I think it is much more likely that that kind of student drops out firstly because they are having some difficulty on straight academic grounds; secondly, that they have chosen the wrong kind of course and it does not really suit them; or, thirdly, possibly because they have decided that it was a mistake to have gone to university in the first place. Sometimes students are a little uncertain and they make the wrong decision. Again, from past experience, quite often that sort of student was not ready for the independent living, the self-starting that you have to have in terms of being in a much freeer environment from the point of view of study rather than a structured one, but they do come back as mature students and they sometimes do very well when they have a second crack at it. It is much more likely to be that range of factors than that they are going to have to start repaying a small amount. You have to remember that, when they reach the threshold, the amount they have to pay back per month is very small and the fact that it is income contingent I think is an encouragement to stay on rather than that you ask a student, as happened under the old mortgage-style scheme, to pay back exactly the same amount whether they are earning £150,000 a year or £15-16,000 a year.

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