Analysis: What justifies a £3,000 fee?

February 21, 2003

As universities consider at what level to set fees, Alison Goddard and Claire Sanders look at indicators that could influence their decisions.

In 18 months' time, English universities and colleges must produce their 2006 prospectuses setting out what they intend to charge their students.

The growing assumption that, financially, all universities and all colleges of higher education will need to charge the full top-up fee is being countered by an unwillingness among academics to do so. Some 72 per cent opposed top-up fees in a THES survey earlier this year.

Universities across the land are debating the issue. At Coventry University, vice-chancellor Mike Goldstein feared that underfunding would push universities to the top of the £3,000 limit, but he saw fees as a "huge gamble" for access and posing questions internally.

"I am asking colleagues: how are we going to decide what to charge? Clearly, we will have to take a view of the market and make judgements based on the actions of other institutions. We may want to consider regional issues," he said.

To give an idea of each institution's place in the new higher education market, The THES has compiled a set of indicators. A small number of universities appear towards the bottom of the table on all these indicators. Thames Valley University in particular might find itself struggling to justify a fee level comparable with that of Oxbridge.

Entry standards

University applicants see entry standards as key to the quality of education they will receive, according to Bahram Bekhradnia, director of the Higher Education Policy Institute.

He said: "Students seem to respond very positively to market signals, and there is a tendency for students with the strongest grades to congregate in the same universities. In this, they are responding to signals from employers who, whatever they say, give the message that students from those universities are those they value most highly. So it is self-reinforcing."

Peter Andras and Bruce Charlton, lecturers at Newcastle University, have plotted the standing of each university as measured in The Times Good University Guide against its entry requirements, and found an almost linear relationship between the two.

Dr Andras said: "The entry levels define a real market. Students are trading their A-level grades for expected higher education services. Better A-level grades buy services from better universities.

"Universities may try to increase their ranking but, in practice, the data suggest that students know what they are expecting to get from a university based on A-level entry grades. This implies that universities can increase their ranking only if they are able to increase their entry-level requirements without experiencing a significant drop in their income related to student numbers."

The pair identified six different groups of universities. The highest ranked were the universities of Oxford and Cambridge (group A), followed by Imperial College London and the London School of Economics (group B). The third group included: the universities of Bath, Warwick, Bristol, York and Nottingham; University College London and Durham, and Sheffield universities (group C). St Andrews and Edinburgh universities were also members of this group but operated under a different funding regime.

Members of the fourth group were: the universities of Manchester, Loughborough, Newcastle and Birmingham; King's College London; Lancaster University; Royal Holloway, University of London; Queen's University, Belfast; Southampton and Leicester universities; the School of Oriental and African Studies; the University of Leeds; the University of Manchester Institute of Science and Technology; and Exeter, Aston and Sussex universities (group D). The universities of Glasgow and Cardiff were in the fourth group but had different funding regimes.

The fifth group included: Essex, Reading, Surrey and Liverpool universities; Queen Mary, University of London; East Anglia, Kent, Hull, Keele, City, Brunel and Ulster universities; and Goldsmith's College, University of London (group E). Other members of this group were the universities of Aberdeen, Stirling, Dundee, Strathclyde, Swansea, Heriot Watt and Aberystwyth.

All other universities were members of the sixth group (group F), with the exception of Thames Valley University, whose low entry standards and low ranking in The Times Good University Guide left it outside the groupings devised by Dr Andras and Dr Charlton.
     UNIVERSITIES GROUPED ON ENTRY STANDARDS      Source: Andras and Charlton


Universities concerned about fees will want to gauge their popularity with applicants. Last week's figures from the Universities and Colleges Admissions Service showed that in autumn last year the big civic universities mopped up students while some former polytechnics went short.

Applications for this autumn show the trend to be continuing.

The THES has used figures from Ucas to calculate the ratio of applications to acceptances for entry in 2002. By this measure, the most oversubscribed English institution was the LSE, which received 15,800 applications and accepted just 1,380 - or 9 per cent. At the other end of the scale, York St John College, part of the University of Leeds, accepted 38 per cent of applicants.

However, these figures come with a health warning: in some cases the figures indicated an element of self-selection by the applicants. For example, Oxford was close to the bottom of the table with 12,000 applications and 3,417 acceptances - or 29 per cent.

Overall, on this measure, the ten most oversubscribed English institutions were: the LSE, Bristol, Warwick, York, Nottingham, Bath, North London, City and Exeter universities; and, jointly, University College London and the University of Sheffield.

The ten least oversubscribed English institutions were: York St John, the Southampton Institute, University College Worcester, the London Institute, Oxford University, St Martin's College, Roehampton University of Surrey, and the universities of Lincoln, East London and Cambridge.

(Institutions with fewer than 1,000 acceptances have been excluded from the table. The University of North London merged with London Guildhall University in August 2002 to form London Metropolitan University; whose component institutions are considered separately in this analysis.)


Teaching and research assessments have become increasingly important for students seeking to assess the strength of particular institutions or courses.

Informing the The Times Good University Guide each year is a table of teaching assessments. It is based on the mean of all subject reviews and secondary education subject scores across a university as completed by the funding councils and Quality Assurance Agency up to December 2001.

On this measure, Cambridge did particularly well, achieving 22.7 out of a maximum score of 24. Thames Valley came bottom of this table with a score of 19.1.

The top ten English universities were Cambridge, York, Warwick, Oxford and Imperial, followed jointly by Loughborough and Sheffield; then, in joint eighth place, came Durham, Manchester, the LSE and UCL.

The bottom ten English institutions were Thames Valley, East London, Lincoln, Bournemouth and Derby, followed jointly by Teesside, Central England and North London; then, in joint ninth position, came De Montfort, London Guildhall and South Bank.

The Times ' guide includes a research assessment score. This is the average 2001 research assessment exercise score for each institution, weighted according to the number of staff in each department getting each rating.

Cambridge again came top and Thames Valley once again brought up the rear.

The top ten English universities were: Cambridge; Oxford; Imperial and the LSE; Warwick and UCL; Southampton, Lancaster and York; and Bath, Bristol, Durham, Manchester and Royal Holloway, University of Manchester.

The bottom ten were: Thames Valley; Derby and Anglia Polytechnic University; Lincoln; Luton; Teesside, Bournemouth and London Guildhall; Wolverhampton; and Coventry.

Dropout rates

The likelihood of a student dropping out of his or her studies varies widely from one institution to another.

There is an almost linear relationship between achievement at A level and the likelihood of dropping out. Institutions with higher entry levels - and those that offer subjects such as medicine that require high entry standards - have far lower dropout rates than those that take students who are less well prepared for higher education.

According to figures published by the Higher Education Funding Council for England, almost half the students at North London drop out whereas only 1 per cent of those at Cambridge do so.

The data refer to the dropout rate for full-time students who started first-degree courses in autumn 1999.

The top ten rated institutions with the lowest dropout rates were: Cambridge; Oxford; Bristol; Nottingham; Leicester and York; Keele, Bath and Warwick; and, in tenth place, Birmingham, Durham, Lancaster, Liverpool, Newcastle and Sheffield universities plus UCL.

The ten English universities with the highest dropout rates were: North London; Central Lancashire and East London; Bolton Institute of Higher Education and London Guildhall; Thames Valley and University College Northampton; South Bank and Sunderland; and Anglia Polytechnic University.

(Institutions with fewer than than 1,000 students were excluded from this table.)


The government said universities and colleges should recognise that graduates received a different rate of return depending on which subject they study. Last month's white paper states: "It is absolutely clear that students get different returns from different courses. We believe a revised contribution system should recognise these differences properly."

Gavan Conlon of the Centre for the Economics of Education at the LSE, currently seconded to the Department for Education and Skills, said: "We found a 44 percentage point earning gap for graduates from universities at the top end of the earning scale and those at the bottom."

The white paper also quotes statistics drawn from the Labour Force Survey for the earnings premia obtained by women taking different degree subjects.

Women's earning power is boosted more than men's by having a degree, but this varies significantly according to subject. The statistics showed that law and architecture female graduates earned over 40 per cent more than a woman with two or more GCE A levels, while arts graduates earned about 17 per cent more.

A paper last year from the Council for Industry and Higher Education reports: "The returns associated with degree-level qualifications vary substantially according to the type of institution attended, the subject studied and the social class of the individual in possession of the qualification.

"Oxbridge graduates achieve a 7.9 per cent earnings premium over graduates from old universities, while those attending former polytechnics suffered a 3.8 per cent wage penalty compared to those attending old universities."

Hefce produces performance indicators on the employability of graduates from different universities. These figures also come with a warning: they are based on the First Destinations Survey , completed by alumni six months after graduation. Response rates to this survey vary from 96 per cent to 74 per cent. The figures refer to students graduating from full-time courses in the summer of 2000.

According to the data, the English universities producing the most employable graduates were: Nottingham Trent; Oxford Brookes, Bath, Hull, Kent and Leeds; with 18 other English institutions in joint seventh place.

At the other end of the scale were: East London; London Guildhall, the London Institute and Westminster; Middlesex; Southampton Institute; Greenwich; and Coventry, Lincoln, Salford and Queen Mary, University of London.

Regional influences

As cost forces more students to study from home - the white paper notes that, in 2000-01, 21 per cent of students studied from home, compared with 15 per cent in 1994-95 - and regional targets become increasingly important, universities may find local factors influencing price.

Last November, Hefce decreed that every English university and college must help raise regional enrolments by 10 per cent by 2010. The targets made institutions responsible for raising the aspirations of local children rather than enrolling them.

Institutions in the London region will be responsible for getting 45 per cent of young Londoners into higher education, whether they study in London or not. The regional participation rate for London is currently 35 per cent.

In other areas, enrolment rates and the new targets are much lower. The North East has a regional participation rate of just 24 per cent and has been given a target of 34 per cent.

Those in the North East will have an uphill struggle to encourage those in low participation neighbourhoods to pay the full top-up fee, while those in the South East may find that they have already reached saturation point.

Regional variations in the cost of living will also affect demand.

Institutions in the South East have long argued that London weighting should be extended to areas such as Hertfordshire. And universities in the North have been able to attract students from the more expensive South.

Data gathered by the North West Regional Development Agency shows that, in 2002, institutions in the region received 83,000 external applications from outside the region, compared with 69,000 for London. The region's universities received an average of 22,500 applications each in 2002 compared with 15,000 across the rest of the UK.

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