Examination of witnesses (Questions 342
WEDNESDAY 31 JANUARY 2001
and MS LINDSEY
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?
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
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.
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 fundingone 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
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.
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.
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
(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
(Professor Callender) Or DfEE. I do not want to point
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
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
(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.