Cut-price clearing may harbour hidden costs

May 26, 2006

Universities tempted to offer late discounts to fill course vacancies should think twice, warns Sir Martin Harris

There's nothing more irritating than booking the best fare possible for a flight to that well-earned break in the sun only to strike up a conversation with a fellow passenger who triumphantly reveals that he or she paid about what it cost you for that cup of coffee in the departure lounge.

It just isn't fair. There's always someone else who somehow managed to do better. I wonder what effect this "cut-price" approach might have in lecture theatres across the country should any of our universities and colleges, keen to fill course vacancies this autumn, discount their fees and/or increase bursaries? Can we really treat the cost of higher education as if it were an air ticket?

It would be unrealistic to think that nobody out there is pondering long and hard over whether to adopt the bargain-basement tactic during the rush for places. But it is also unrealistic to think that it is not a risky approach in the medium to long term. The issue of equity between students could be placed in jeopardy, and the carefully crafted and widely publicised access agreements that institutions have made with the Office for Fair Access could be undermined.

Let's take a step back and consider the original purpose of additional fees. They were intended to increase the resources available to institutions, to support undergraduates directly, yes, but also to help enhance the quality of the student experience.

Last year, I warmly welcomed the very sensible decisions made by institutions to set aside nearly one third of these new resources to assist the less well-off. And we have seen a comprehensive, and at times generous, array of bursaries put in place.

At the same time, institutions have reserved the rest of their extra money for other purposes, so it would seem at odds with this sensibly thought-out strategy were an institution to give away more of the resources it had previously decided were needed for other things. After all, a discount is not just for one year, it's for the duration of the course.

Then there's the issue of equity. How can it be fair for a student who secured a place earlier in the year through the conventional route to lose out to another who is, in effect, being rewarded for applying later in the process?

The cost of higher education is changing and is variable across institutions. Anecdotal evidence suggests that prospective students are less clear about institutional support than they are about the level of fees and loans. They are also quick to pick up on unsubstantiated rumours about admissions to higher education. In this climate, is it sensible or fair to introduce another complexity to the process of choosing what and where to study?

Providing incentives to apply later in the cycle could destabilise the established application process, and it will not help institutions. After all, if you discount a course during clearing one year, it quickly begins to look expensive at the start of the cycle.

We could be faced with a scenario in the summer where applicants who have already secured a place are tempted to shop around for a better deal. Would this create a single new applicant at this stage, and what effect would this bargain-hunting culture have on retention? If a student is recruited on this basis during clearing, there may be a risk that he or she did not really want to be on that particular course; finance is after all just one in a series of considerations when applying to higher education - and by all accounts not usually the decisive one.

I urge institutions to hold their nerve this autumn. They have made plans to support students, and there are many other pressing demands on their new resources. What is more, David Eastwood, the incoming chief executive of the Higher Education Funding Council for England, has made it clear that he understands the situation. He recently acknowledged that August and September "could see various forms of turbulence" and added that "where institutions feel the market is exposing them in new and uncomfortable ways we would like early, quiet and open dialogues between the funding council and those institutions".

So my advice to universities and colleges would be to make sure that prospective students are clear about what's on offer and to treat early and late applicants the same. This would be in the best interests of all concerned.

Sir Martin Harris is director of the Office for Fair Access.

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