DEPARTMENT OF EDUCATION How much is a degree worth? Students perceptions of the financial implications of transitions into higher education HUBERT ERTL

1.Background -financial transition factors -transition by numbers 2.The study - questions - design 3.Key findings -expectations of earnings and debt -decisions affecting transitions 4. Questions raised Overview

Financial issues affecting students transition into higher education in England cap on Home/EU UG fees raised to £9000 if fees charged >£6000, university must have access agreement agreed by OFFA and participate in National Scholarship Programme - means-tested grant (£3250 when RHI <£25000, reducing to £0 at £42,875) student loans repayable once salary >£21,000 with real rate of interest charged - p/t UGs eligible for student loans

UG fees and student funding in England FeesState student funding until 1989 No student fee contribution Means-tested grants 1990 – 1997 No student fee contribution Loans and means-tested grants 1998 – 2005 Means-tested student contribution - max £1,000 Loans 2006 – 2011 Deferred partial fee liability - max £3,000 Means-tested grants and loans (grant eligibility adjusted for 2008 & 2009) Deferred (partial) fee liability - max £9,000 Means-tested grants, NSP and loans (revised loan repayment terms)

Transition numbers: Undergraduate applicants and acceptances (000s), Source: UCAS

340,500 acceptances to English universities from UK/EU applicants, that is 51,000 less than in 2011(-13 per cent) NB: 2012 entry includes 9516 students who deferred, compared to 23,600 for 2011 entry (suggests underlying change of -10 per cent) drop evenly distributed among students with AAB+ and lower levels of entry qualification Figures for 2012 admissions UCAS data – End of cycle report 2012

412,907 applications from English applicants, that is 8,416 more than in 2012 (+2.1 per cent) -9.8% 2012 vs Initial figures for 2013 application cycle UCAS data – 18 March 2013

The rhetoric of consumerism The force that is unleashed is consumerism…. I recognise that the very term consumerism causes deep anxiety for some. But it is not a threat to the classic relationship between academic teacher and student – it is an opportunity to rebalance academia so that teaching gets its rightful place alongside research. (D Willetts THE )

Individual economic benefit is cited by politicians as a rationale for higher private contributions to the cost of higher education: Assumption: Perceptions of potential applicants about expected costs and outcomes play a significant role in their decision regarding transition into higher education Question 1: To what extent does the expectation of agraduate premium influence the choices of potential applicants? Question 2: To what extent do differences in the expected cost of studying at different institutions influence applicants institutional choices? The study – context and questions

Work with six secondary schools/colleges (five in Oxfordshire, one in Buckinghamshire) Accessed mainly through network of PGCE partnership institutions Questionnaire survey (online or paper) of all students in year 13, taking courses that would make them eligible to apply for higher education : 723 usable responses Follow-up focus group interviews at five participating institutions: 43 respondents, all of whom had applied to higher education The study - design

Likelihood of applying to higher education according to selected student characteristics Key findings AllFemaleMaleWhiteBlackAsianMixedA levels Other qualif. 1 st in family not 1 st in family Applied73.4%78.6%66.4%71.5%85.3%88.5%62.5%77.8%50.9%70.5%75.3% Not Applied26.6%21.4%33.6%28.5%14.7%11.5%37.5%22.2%49.1%29.5%24.7% Significance-**ref. ***ref.**ref. N

Key findings: expected earnings OverallFemaleMaleFirst in HE Not first in HE Don't know %9430.0%5527.1%3523.6% % <21, % %4321.2%5537.2%8924.9% 21, , %7724.6%6029.6%4127.7%9125.5% >30, %4012.8%4522.2%1711.5%6518.2% Total

Expected debt by gender Key findings

Views on graduate premium Key findings Note – attitude to graduate premium has an important influence on propensity to apply to HE

Key findings: decision to apply to HE Approval rate MeanSD 1I am interested in learning more about my subject82.9% A further qualification will help me to get a better job80.4% A future qualification is essential for my intended professional/career69.5% A further qualification will help me to get a job with higher earnings63.8% As jobs become scarcer, Im more likely to find one if I have a higher qualification 44.3% I am doing well academically so it seems to make sense to continue my studies 37.0% The financial support I could get23.5% The amount I have to pay20.5% Its what my family/friends/teachers expect me to do14.9% I dont know what I want to do next, so I might as well go to university11.3% There are no jobs available, so I might as well study for longer9.0% Its what everyone in my family has done7.0% Its what all my friends are doing 4.7%

73.6% of respondents applied to at least one pre-1992 university, of whom 75.3% applied to at least one Russell Group university. Questionnaire: cost concerns have more of an impact on men applicants to to post-1992 universities those concerned about the debt burden Those who expect to earn above the repayment threshold (£21,000) Focus groups: differences in fee levels between universities are perceived as small – not central to institutional choice Key findings: choosing where to apply

Key findings: reasons not to apply to HE Top ranked items (out of 13 items provided): I want to earn money I don't want to get into debt I want to find a job straight away I want to do an apprenticeship Factor analysis: financial motives related to prospect of lost earnings stronger for those who are the first in their family to go onto university and for those that dont believe in graduate premium ability to find employment and set off on a career path stronger for those that dont believe in graduate premium Focus groups: Perceived lack of alternatives to HE plays an important role

at what point(s) do potential applicants consider cost when making decisions about HE? do potential applicants have the information they need to compare the costs of different HE options? impact of KIS on decision-making in subsequent years? how is information used in decision making process? are potential applicants making choices that are rational for them and, if so, how does/should this affect policy? Higher education entry as a transition process?

Thank you for your interest!