Larger bursaries ‘boost students’ chances of getting good degree’

Study of 36,000 undergraduates identifies positive relationship between financial aid, retention and attainment

October 18, 2016
Student using ATM cash point machine
Source: Alamy

The larger the bursary a student receives, the more likely they are to get a good degree, according to a major study.

Researchers found that each additional £1,000 of financial aid awarded to undergraduates at nine English universities increased their chance of getting top marks (a first or a 2:1) by 3.7 percentage points, with about half of this owing to improved retention, and the rest attributable to higher test scores.

Significantly, students from the most deprived backgrounds benefited the most, with the estimated impact of larger bursaries on the poorer half of the sample being about six times greater than the cohort as a whole.

Undergraduates with higher prior attainment derived two to three times greater benefit than their course mates with lower school grades, according to Gill Wyness, lecturer in the economics of education at the UCL Institute of Education, and Richard Murphy, assistant professor of economics at the University of Texas at Austin.

While their IoE working paper is based on data for 35,879 UK and European Union students provided by English higher education institutions, the pair believe that their findings will prove applicable around the globe, and particularly in the US.

In the sample, the size of the bursaries provided ranged from £50 to £3,200 per individual, with an average value of £775.

The finding that each additional £1,000 of financial aid that students are eligible for in their first year increases their chances of getting a good degree by 3.7 percentage points holds firm until the value of a bursary exceeds £1,900, after which the beneficial effect appears to tail off.

A £1,000 increase improves students’ likelihood of completing the first year of their degree by 1.4 percentage points alone, Dr Wyness and Dr Murphy say.

The findings contrast with research published by England’s Office for Fair Access in 2014 that found that neither the size nor the availability of a bursary had a discernible impact on whether a student from a poor background would finish a course or not.

Policymakers in the US have also questioned whether the country’s Pell Grant system simply leads to the enrolment of students who are unlikely to succeed in higher education.

Dr Wyness said that bursaries could have a positive impact, especially if they went to the students who deserved them most in terms of financial need and academic potential.

“We shouldn’t write bursaries off,” Dr Wyness said. “Our results show that bursaries are effective and that universities could get more out of them by targeting them more effectively.”

The study does not explore why bursaries have a positive impact, but it has traditionally been suggested that they can enable students to purchase additional learning materials, fund a better living environment, and reduce the need to undertake paid work alongside their studies.

Dr Wyness and Dr Murphy, who are also affiliated to the Centre for Economic Performance at the London School of Economics, argue that the bursaries awarded by English universities provide a unique opportunity to weigh the impact of financial support. This is because the significant variation in the value of subsidy provided means that students with the same parental income and ability can have access to very different amounts of aid.

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