Grants lobby finds fresh ammunition

Student maintenance grants increase access to university and cut dropout rates, research from Harvard University has shown.

Harvard economist Susan Dynarski found that in the United States the chance of a student attending college was increased by 4 per cent for each $1,000 (£690) of grant aid handed out by the state.

The same $1,000 increases the average time spent by a student in education by 0.16 years.

Presenting her findings to the Royal Economic Society's annual conference at Durham University this week, Professor Dynarski concluded that student grants did not simply subsidise the future middle classes who would have attended university anyway. They were a cost-effective use of government funds, she said.

She told The THES the findings applied equally to Britain. "It shows that cost matters," she said.

The research was welcomed by the National Union of Students, which last week launched their campaign to restore grants for poorer students and to abolish tuition fees.

NUS president Owain James said: "This is yet another contribution to the growing body of independent evidence which shows that, unsurprisingly, people from poorer backgrounds benefit from maintenance grants."

Professor Dynarski used data from the US's National Longitudinal Survey of Youth to analyse the effect on college attendance and completion rates of the defunct Social Security Student Benefit Program, which she said was similar to the old British maintenance grant system.

She said the most cost-effective grants policy would be one that offered students relatively higher grants in their first year of university than in subsequent years.

Students eligible for the benefit programme completed an additional year of education on average, compared to the population at large. The extra year of education has major effects on average lifetime earnings.

Those with 13 years of schooling, she said, earned about $15,000 more than those with only 12 years in education.

Professor Dynarski said: "This benefit to the individual is more than twice the $7,600 it cost the government to fund the benefit."

Students aged between 18 and 22, eligible for the benefit, received an average of $5,400 a year under the scheme in 1980, with an additional guaranteed student loan of about $3,400. Tuition fees at public universities averaged $1,600 at the time, and about $6,100 at private colleges.

The paper, Does Aid Matter? Measuring the Effect of Student Aid on College and Completion , found that student grants had a "threshold effect".

It says: "A student who has crossed the hurdle of college entry with the assistance of aid is more likely to continue schooling later in life than one who has never attempted college."

• University applicants from United Kingdom ethnic minorities are less likely to be accepted than their white counterparts, an analysis of more than a million entrants shows. But the research, presented to the Royal Economic Society's annual conference, rules out racism in the higher education admissions system.

An analysis of entry figures from 1996 to 1999 by Derek Leslie of Manchester Metropolitan University found that ethnic minority applicants were 6.2 per cent less likely to be offered places than white applicants. However, his paper says: "The simple truth is that non-white [Universities and Colleges Admissions Service] applicants are less well qualified than whites." Where qualifications were similar, whites and non-whites had an equal chance of success.

He said because proportionately more non-whites apply to higher education, their average qualifications were likely to be lower.