Analysis: Plunged into poverty then pulled back out

Student support designed to aid access and cut dropout highlights a system failure, say critics. Claire Sanders reports in the second in our series on student poverty.

"Some cases of student hardship simply break our hearts," said Liz Hall, assistant registrar responsible for student financial support and mature students at Sheffield University.

Ms Hall is one of hundreds of administrators and advisers responsible for distributing the student support funding that is allocated to English universities by the Higher Education Funding Council for England. In 2001-02, this money will amount to nearly £87 million.

Monitoring of support spending in 1999-2000 showed that nearly half of payments to students were less than £500, with only 1 per cent above £3,000. In 1997-98, the last year in which full maintenance grants were available, the total spent by government on grants was £923 million.

The funds are part of the government's student funding package, which relies on a highly targeted approach to ensure that the introduction of fees and abolition of grants does not penalise any one group of prospective students.

Guidance put out by the funding council last month says that this money plays "a key part in helping to deliver the government's widening access policies". It is also designed to prevent students from dropping out.

Late last year, the Liberal Democrat advisory group on higher education proposed that the funds be abolished. Its report says: "The current government is relying increasingly on the use of means-tested applications to access funds to tackle the problems caused by student hardship."

It says that this approach demeans students by requiring them to "parade their poverty". "Since it is a post-hoc approach, it is a grossly ineffective way of tackling both the debt aversion and the fears of hardship that prospective students from poorer backgrounds have prior to applying to university," the group concludes. It recommends that the funds be abolished and the money saved go towards the restoration of grants and benefits.

Maggie Woodrow, chief executive of the European Access Network and a member of the group, said: "The whole student support package should be aimed at preventing poverty, not causing it and then trying to deal with the casualty list."

This was the approach taken by Andrew Cubie in Scotland, who recommended that the money available for access funds should be redirected to a bursary scheme for young adults from low-income families, mature students and other disadvantaged students.

The Scottish Executive introduced non-repayable grants for certain groups of students and kept a limited fund to help unpredictable cases of hardship.

Wales has the same system as England. But the Welsh Assembly's student support review is also looking at the possibility of converting the funds into targeted grants.

Northern Ireland plans to offer a mixed package of targeted grants, such as a childcare grant, and access bursaries similar to those being offered in 2001-02 in England.

Administering such packages is complex. Pamela Bell-Ashe is a member of the Association of Managers of Students Services in Higher Education and sits on the Department for Education and Employment's advisory group on access and hardship funds. "No sooner do they master the details of one package of support than it all changes. One wonders how the poor student can ever be expected to understand it," she said.

Lindsey Fidler is research officer for financial support at the National Union of Students and sits on the same advisory group. "The NUS has repeatedly called for the return of targeted grants. The system keeps changing and students cannot plan ahead. Also, demand outstrips supply and as the universities administer the funds it is their staff who have to say no to students. This is an unfair burden." She added, however, that any targeted grant scheme would also be complex.

One reason for the complexity is that as the government has sought to fine-tune its system of student support access and hardship funds, both have changed and expanded. In 1995-96, the hardship fund was £21.6 million. It stayed at about this level until 1998-99, the first year in which fees were introduced and grants were halved, when it leapt to £45.7 million. In 2001-02, the £87 million total for student support going to universities will be broken down into £67 million for a combined hardship and access bursary fund (though different eligibility criteria apply to the two funds); a fee-waiver fund of nearly £14 million; and an opportunity bursary fund of £6 million.

Each change has to fit in with the benefits system. "Lone parents are one of the few groups of students entitled to benefits and this explains why the packages available to them are so complex," Ms Fidler said.

In June last year, the DFEE published its report of the access funds and hardship loans review. This was the first detailed study that the department had carried out to see how the funds were being administered.

The report makes a number of recommendations. It says that access funds should be split in two - an access bursary fund and a hardship fund. The access bursary fund should provide help for full-time mature students and also for young, disadvantaged students. Money should be available to students at the start of the course so that they can plan their finances. The hardship fund should deal with any cases of financial difficulty that arise during the course.

It also recommends that mature students should no longer have to take out a hardship loan before receiving help from the hardship fund. However, the report makes clear that hardship loans should normally be the first source of help for students aged 18 to 25. Universities assess students for hardship loans, but the money comes from the Student Loans Company.

Hefce was told to review its methodology for allocating funding to ensure that it was appropriately targeted. Less than 1 per cent of the access fund budget in England remained unspent in 1998-99 - but the underspend was concentrated in about ten universities.

The report recommends that universities be able to carry forward a proportion of their funds each year, that they should make the funds available to students throughout the academic year and that they should receive extra funding to help administer the funds. Most of these recommendations have been implemented.

In 2001-02, universities will get just over £2 million to cover their administrative costs. But by the time the review was published, the government had already announced changes to student funding - particularly for mature students, for those with children, lone parents and students from poorer backgrounds - that would impact on the funds.

Ms Bell-Ashe said: "We only got the Hefce guidance on 2001-02 a couple of weeks ago and are still trying to understand it." She is concerned at how the opportunity bursaries will be allocated. "The government has set out criteria for the allocation of these bursaries but universities are already telling us that they have had more applications than bursaries - and more worryingly, these applications all meet the government criteria."

Baroness Warwick, chief executive of Universities UK, said: "We do support the targeting of funds to those in specific need, and this leads inevitably to complexity. But we would welcome any moves to simplify the arrangements."

A spokesperson for the DFEE said: "For the majority of students, the system is straightforward and delivers money to them more efficiently than before. For mature students and others who qualify for targeted support, the system is more complex but we are working hard with administrators and others to make it as easy as possible for students to understand the support available."

Does the support money reach the right students? Hefce is required to monitor the support funds allocated to universities. In March, it published the results of monitoring for 1999-2000. It concluded: "Overall, the monitoring return data show that student support funds have been used successfully to target the groups identified by the government."

Ninety-six per cent of the £75 million allocated was spent, with the bulk of the remainder carried over. Eleven per cent of students were refused general access funds (this is all the funds excluding those given in fee remission). Forty-seven per cent of refusals were because of insufficient evidence of hardship and 7 per cent because the access fund was exhausted.

The monitoring showed that 89 per cent of general access payments went to undergraduate students, of these 34 per cent were 21 to 24 year olds and 44 per cent were over 25. It also found that students with dependants accounted for 16 per cent of the number of overall general access payments but for more than a quarter of total monies paid out.

Eighty-three per cent of students received support in the form of a non-repayable loan. Forty-eight per cent of payments were between £100 and £499, with just 1 per cent above £3,000.

CASH HELP

In 2001-02, the £87 million allocated for student support will provide the following discretionary help. Students can apply to their university for:

• Access bursaries for full-time student parents (and those studying part-time to be teachers) who may need extra help. These are available to student-parents who do not receive the childcare grant - a statutory allowance not funded from the £87 million - or the mature students bursary.

• Mature students bursaries are available to help with course-related costs, especially childcare. They are for students in their second or third year who received a mature student bursary last year and who do not receive the new childcare grant - which only covers those with registered childcare - in 2001-02. Each bursary is worth up to £1,000.

• Opportunity bursaries for young people studying in one of the "Excellence in Cities" local education authorities in England. Some 6,000 bursaries of £2,000 spread over three years will be available for young students aged 18-21 from families on low incomes if there is little or no experience of higher education in their families.

• Help with tuition fees for part-time students. Students on income-assessed benefit or who receive tax credit on a low income (£11,543 after deductions) are eligible as well as students who lose their job after starting their course.

• Hardship loans are assessed by the university but paid by the Student Loan Company. Amounts from £100 to £500 are available.

• Hardship funds are available to help students who are in financial difficulty. Funds are open to undergraduates and postgraduates and to full and part-time students ( as long as they study at least half of an equivalent full-time course). Allocations can range from £100 to £3,500.

STUDENTS AT A LOSS OVER HOW TO MAKE ENDS MEET COULD FIND A BURSARY TO BAIL THEM OUT

The institution

In 1999-2000, 1,085 students applied through the Student Services Information Desk at Sheffield University for financial help.

Liz Hall, assistant registrar for student financial support and mature students, said: "We rejected just a quarter. Hardship means different things to different students. One student wanted money to visit his girlfriend in Italy, to him it was an essential expenditure, but it was not one the university could help him with. Other times, we have students whose parents won't pay their contribution. We still have cases of women whose husbands are well-off but won't support their studies."

The majority of payments made to students were between £500 and £999, but 45 students received £3,000 and over. The majority of the higher payments were to mature or disabled students.

Ms Hall agreed that the system was complicated. "For mature students in particular we find that the interaction with the benefits system, and the poor advice offered by some agencies, makes life difficult."

Last year, the Department for Education and Employment praised Sheffield's bursary Early Outreach and Compact Scheme. "We have been running it since 1992 to bring in young people from schools with low staying-on rates," Ms Hall said.

The scheme had helped 59 students by 1999-2000, of which only two dropped out. In spring 1998-99, Sheffield agreed to the introduction of bursaries for these students.

The government's own opportunity bursaries have allowed Sheffield to develop the scheme. In 2001-02, Sheffield will receive 71 such bursaries of £2,000 each over three years. Ms Hall said: "We do not think this is enough, so Sheffield is offering its own Enough to Learn On scholarship - amounting to £2,000 annually. In 2001-02, 18 of these scholarships will be offered."

The students

Colin Hickey is in the third year of a chemical and process engineering degree at Sheffield. He was awarded £520 from the hardship fund last November. But an application in February was turned down. "I thought at the time I would have to drop out as I could not afford food," he said. "But when my bank which had originally refused to extend my overdraft, realised I couldn't get any money from the university, they extended the overdraft."

Mr Hickey is the first member of his family to go into higher education. Although he has not had to pay fees, he has not had any financial support from his family. He has taken out his full student loan entitlement of about £1,800 each year.

He said: "I had to do a foundation year, so I've had four years of studying and it has not been easy. I got into financial trouble this year because I did not work at Christmas.

"The whole system seems very arbitrary. I know people who applied but gave up as they did not have the time to chase forms or because they were doing paid work as well as study. And I know people who had the time to apply and who received money."

Jane Fowle is a first-year social policy and sociology student at Sheffield. She is a mature student and a single parent with one four-year-old child.

"It has been a bit embarrassing to go to the university and lay my finances bare. But I accept that the university needs proof of my position," she said.

Ms Fowle was awarded a mature-student bursary of £1,000, a dependant's grant of £3,175 for the year, money for school meals on top of that and £2,500 from the hardship fund. She has taken out her full student loan entitlement of £3,790 as well as a top-up loan of £500.

"I have informal childcare arrangements with a friend and my mother so I cannot apply for many of the childcare provisions."