Why I... think government reforms could widen social divides

November 21, 2003

Despite all the noise about top-up fees and changes to student funding, what has been lacking is hard evidence on their impact. New research commissioned by the Department for Education and Skills sheds some light on this. The 2002-03 student income and expenditure survey is the first to examine the consequences of the abolition of grants, their replacement with loans and the introduction of tuition fees in 1998.

These changes have shifted the financial burden of going to university from the state to students.

Not surprisingly, student debt has escalated. The debts of students graduating in 2003 were two and a half times greater than the debts of those who graduated in 1998. Students who were poor before going to university were more likely to be in debt and left university with the largest debts, while well-off students were less likely to have debts and tended to leave with the lowest debts. In 2002-03, students whose parents'

income was less than £20,480 a year owed an average of £9,708, and half owed more than £10,392. Students with parental incomes of more than £30,502 owed just £6,806. Student debt is a class issue.

Parental financial support for students has fallen by 18 per cent since 1998-99. Students from the highest social classes experienced a 20 per cent drop, which they made up by getting 15 per cent more from the support system. By contrast, students from the lowest social classes saw their parental support grow by 2 per cent - money their families can probably ill afford - but their income from student support fell by 4 per cent.

So the main beneficiaries of the abolition of grants and larger student loans have been wealthy students.

The final change in students' incomes is their increasing reliance on paid work. By 2002-03, 58 per cent of students worked in term time, up from 47 per cent in 1998-99. On average, they worked 14 hours a week. Student earnings increased by 48 per cent and constituted 20 per cent of their total income, compared with 14 per cent in 1998-99. Those most dependent on work and working the longest hours came from the poorest families. Student employment is also a class issue.

What do these findings mean for future government policy and widening participation? The first concern is rising student debt. Fear of debt is greatest among low-income groups and puts them off going to university.

Top-up fees of £3,000 will put even more poor students off university.

Another concern is the increase in term-time work, which is linked to poor attainment. Students who work obtain lower-class degrees than those who do not work, and the more hours they work, the greater the detrimental effect.

A significant improvement is the reintroduction of maintenance grants of up to £1,000 a year for the poorest students. However, fewer students will benefit than under the old grant system (40 per cent compared with 70 per cent), and they will get much less money.

The grant, in future, may shift the balance of student funding in favour of the poorest. But £1,000 is inadequate. It will not cover rises in tuition fees, nor is it a large enough incentive to modify debt-averse attitudes. The grant may help some reduce their working hours, but it will not stop them working altogether. It will not halt the growing trend for low-income students to live with their parents. They save more than £1,000 by living at home, but this restricts their choice of university.

The unintended consequence of the 1998 student support reforms has been to create greater inequalities, with poorer students losing out. It is unlikely that the government's reforms will reverse this or lead to widening participation. There is a danger that higher education will become more polarised than ever before.

Claire Callender
Professor of social policy
London South Bank University

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