Impact of IOE research on higher education participation and funding. May 2012

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1 Impact of IOE research on higher education participation and funding May 2012

2 Impact of IOE research on higher education participation and funding Why this research is highly significant The IOE has created a critical body of research which has improved our understanding of who goes on to higher education. The Institute s researchers have calculated the chances of young people from different socio-economic backgrounds winning a university place, and have measured the impact of funding changes on HE participation. These two projects (see side bar), which also involved colleagues from the Institute for Fiscal Studies, are significant because they have informed government decisions on HE funding (via the Browne Review 1, published in October 2010, and the subsequent White Paper, published in June ). Dearden s work helped to persuade the Government that sufficient loans and grants need to be available from autumn 2012 to ensure that students from disadvantaged backgrounds are not deterred by higher fees. Meanwhile, the research led by Anna Vignoles has influenced the shape of the national debate on widening participation and has triggered the launch of a successful website that is helping teenagers to make more informed choices about HE. It has also encouraged policymakers to recognise the importance of providing school students with improved information, advice and guidance on how to reach university. 3 Background to the research Both pieces of research were prompted by two policy trends: the ongoing effort to find ways to finance HE that place a greater cost burden on graduates, with potential implications for student participation rates the increasing concern about social mobility and the desire to provide better access to HE for people from disadvantaged backgrounds. How the studies were conducted Both studies used quantitative research methods applied to a mix of survey and administrative data. Project 1: Impact of fees, loans and grants on HE participation The research on HE funding changes relied on data for gathered by the UK Labour Force Survey (LFS) 4. There were several significant developments in HE finance during this period. The introduction of upfront tuition fees and the abolition of maintenance grants in 1998 was followed eight years later by a shift to higher deferred fees and the reinstatement of maintenance grants (see Tuition fees the story so far, overleaf, for more information on this issue). The researchers used the LFS data to consider how changes in the funding regime affected participation in HE. The data also enabled them to examine the impact of the 2012 reforms on the distribution of graduates and calculate fee and maintenance loan repayment schedules under the new system. Project 2: Widening participation in higher education This work used an innovative linked administrative data set which consisted of records from the Department for Education, the Department for Who conducted this research? Professors Lorraine Dearden and Anna Vignoles of the Department of Quantitative Social Science, Institute of Education, led this research. It also involved Claire Crawford (research officer) and Gill Wyness (PhD student). Who provided the funding? Project 1: Impact of fees, loans and grants on HE participation (September 2006 to September 2009) This project was funded by the Department for Education via the Centre for the Economics of Education and by the Higher Education Funding Council for England, via the IOE scholarship for Gill Wyness s PhD (circa 100,000 in total). Project 2: Widening participation in higher education (January 2006 to December 2007) The work on widening participation was funded by the Economic and Social Research Council under a large grant of 306,777. 1

3 Case study on the impact of IOE research Tuition fees the story so far Business, Innovation and Skills, and the Higher Education Statistics Agency. This English administrative data helped the researchers to better understand the determinants of HE participation amongst individuals from socio-economically disadvantaged backgrounds. The study was unique (and remains so) in being able to follow two cohorts of students those who took GCSEs in and from age 11 to age 20. The data allowed the research team to follow these young people through the school system and explore the determinants of their HE participation from a longitudinal perspective. What the research discovered The research on HE funding clearly showed how government policy on tuition fees policy can affect university participation. It also demonstrated that tuition fee levels can have a crucial impact on human capital accumulation. The research estimated the separate impacts of tuition fees and maintenance grants on the decision to enter a UK university. It confirmed that tuition fees have had a significant negative effect on participation. Dearden and her colleagues calculated that a 1,000 increase in fees (at 2006 prices) would reduce participation rates by 4 percentage points. A percentage point reduction of this size across Tuition fees were first introduced in the UK by the Labour government in They were payable upfront and means-tested according to parental income, up to a maximum of 1,000 per year. Grants were subsequently abolished, having been gradually phased out during the 1990s, and were replaced by maintenance loans. In 2006, upfront fees were also abolished and replaced by a deferred 3,000 fee payable by all, regardless of parental income, but fully covered by a fee loan. The loan is interest free and only payable after graduation (at a rate of 9% of earnings once the graduate is earning 15,000 or more), and all loans are written off after 25 years. Grants were also increased at this time (having been reintroduced in 2004) and maintenance loans extended. The present tuition fee cap of 3,300 a year will be allowed to rise to 9,000 from autumn Graduates will only start repaying the cost of their degrees when their earnings reach 21,000 a year. They will pay 9 per cent of income above this threshold. all income groups would, in theory, result in a disproportionate fall in the number of students from low income backgrounds. Their participation rate would drop from 15 per cent to 11 per cent whereas the participation rates for middle-income students would fall from 18 per cent to 14 per cent and for those from high-income backgrounds from 30 per cent to 26 per cent. However, the researchers also found that the increases in loans and grants that generally accompany such fee changes help to offset most of this negative impact. They calculated that a 1,000 increase in non-repayable support in the form of maintenance grants results in a 2.6 percentage point increase in participation. These findings are comparable to, but of a slightly lower magnitude than, those produced by analyses of HE funding in the US. It is, of course, unlikely that these results will still hold when applied to the 2012 increases. But they do at least indicate that fee increases have a negative effect on participation. The research into widening participation in HE found that while there are large gaps in participation between high and low socio-economic groups especially at high-status universities thus far these have generally arisen due to differences in pupils prior attainment rather than any financial or social barriers at the point of entry to HE. Moreover, this finding holds for both state and private school pupils. This highlights the need for intervention at an earlier age to help disadvantaged pupils make good choices at ages 14 and 16. This should increase their chances of reaching university, the research suggests. How the researchers disseminated the findings The results from both projects were disseminated through the normal academic channels, including conferences and journal articles. 2

4 Higher education participation and funding However, given the huge policy relevance of these studies, the researchers also undertook a parallel set of activities to ensure that policymakers, influential opinion-formers, and the general public were aware of their findings. Media work They mounted a concerted campaign to get the media interested in their work. This included direct contact with specific education correspondents at various national broadsheets. This, in turn, led to interest in the findings from radio broadcasters. This media activity, which was primarily designed to reach parents and teachers, led to: articles in the THE 5 and the Independent 6 several Radio 4 interviews, including one for the Today programme, on the impact of HE funding on participation rates 7 a presentation by Anna Vignoles at the Guardian s summit conference on the future of HE 8. This event was attended by David Willetts, Minister of State for Universities and Science, and Simon Hughes, deputy leader of the Liberal Democrats. Think tanks Recognising that think tanks can play an important role in disseminating research to policymakers the IOE researchers again targeted particular organisations and went to talk to them about their findings. For example, they met with the Sutton Trust 9 to discuss the implications of the research for the then forthcoming Browne Review. Policymakers and university bodies The researchers also recognised that they needed to take the message directly into government. They did this by presenting their findings at: the 2010 research conference of the Department for Children, Schools and Families the 2010 social and economic research conference organised by the Department for Business, Innovation and Skills. They also disseminated their results in informal meetings with policymakers via their government-funded research centre, the Centre for the Economics of Education. The researchers then fed their findings directly into the policymaking process. Dearden and Wyness were called before the Browne Review in January Dearden and Vignoles also made presentations to the Review in May and Vignoles advised the Russell Group of universities 12 in the lead-up to the Browne Review s report. Dearden and Wyness also provided advice and a report to Universities UK 13 on the implications of various funding options in early The organisation then used this to inform its own submission to the Browne Review. Most recently, Dearden was called as an expert witness to a Business, Innovation and Skills select committee hearing on the future of higher education. 14 3

5 Case study on the impact of IOE research educational attainment. It recognised the importance of advice and guidance in improving the choices students make earlier in the school system in the 2011 HE White Paper. Impact achieved by these studies These projects have had a significant impact on government thinking on HE funding and social mobility. HE funding The Government has recognised that the impact of tuition fees can be mitigated by income-contingent loans and grants. Dearden was involved in extensive discussions with HM Treasury and ministerial advisers in the Department for Business, Innovation and Skills prior to the publication of the HE White Paper in July The final decisions about the financial package were influenced by both the IOE research and her direct inputs. She was involved in independently verifying the implications of different options that ministers were considering in particular the consequences for students from a range of backgrounds. Her independent analysis was subsequently described as incredibly helpful by a senior government source. 15 Widening participation The Government has also acknowledged that the key to widening participation in HE is earlier intervention and that most of the problem of access by poorer students is due to their prior Meetings with senior politicians Following the publication of the White Paper, Vignoles and Crawford were invited to a meeting with David Willetts to discuss HE and social mobility and were asked to produce a review which then fed into the Cabinet Office report on this issue. This report 16 quoted their social mobility review extensively. Crawford and Vignoles have also been involved in several of the Government s social mobility initiatives, and have attended meetings with the Deputy Prime Minister, Nick Clegg (June 8, 2011) and Alan Milburn in his role as Independent Reviewer on Social Mobility and Child Poverty (July 21, 2011). New website established One of the tangible outcomes of Vignoles s work on widening participation is bestcourse4me.com, the not-for-profit website that was set up as a direct result of a presentation she gave on her research in New York in She told her audience that, if funding were available, someone should set up a website to ensure that young people were better informed about their HE options. David Willetts was at the conference and agreed that this was an excellent way to start to address the dearth of good information available to potential students. With his help a main sponsor for the site was eventually found the philanthropist Steven Edwards, a former software entrepreneur. The site, which is also backed by Microsoft, has broken new ground because for the first time data on employment, careers and salaries are brought together in one place to help students make the right choice of institution and subject for them. As David Willetts has said, it provides granular information on the advantages of taking different courses and going to different universities 18. The website was mentioned specifically 4

6 Higher education participation and funding in the 2011 HE White Paper. Since its launch, the site has attracted more than 82,500 unique users and in the six months to November 2011 it saw an 88 per cent increase in traffic compared to the same period of Steven Edwards acknowledges that Anna Vignoles has played a key role in the site s success: She has been very important in the development of the bestcourse4me website, from initially proposing the idea through support and advice on identifying the best and most practical data sets, to valuable guidance on the best way of presenting the information to educationally disadvantaged students, he said. The site would not exist without her contribution and continues to benefit significantly from her involvement 19. Other testimonials: Vignoles has also briefed some of the key organisations involved in promoting social mobility through HE, such as the Bridge Group. Dr Tessa Stone, chair of this association s steering group, confirmed that her advisory work has proved influential. Dr Stone recently issued a statement thanking Anna Vignoles for her advice on the data issues that need to be resolved in order to improve our understanding of social mobility. She then added: I summarised your points for Alan Milburn who I know has used them to underpin his discussions with UCAS 20 and with the universities he is visiting, and they ve been extremely helpful in informing the considerations of the Bridge Group s expert group on data, which is lobbying on the same sort of issues. The Sutton Trust, another organisation that is highly active in this policy area, has also confirmed the importance of Vignoles s work. Dr Lee Elliot Major, its research director, recently said 21 : The research Anna Vignoles has done for us has been highly influential on higher education policy thinking in Government and elsewhere detailing the extent to which university participation rates are driven by prior school attainment, and demonstrating the need for informed choice for prospective students. Conceptual impact The impacts of the research by Dearden and Vignoles referred to up to this point can be categorised as instrumental (i.e. 5

7 Case study on the impact of IOE research directly i influencing changes in policy or practice) 22. However, as the ESRC has pointed out, social science research can also have conceptual impacts (including informing debates, directions in thinking and culture that lead to developments in policy and practice). This is the case with the IOE research on widening participation, as the Times Higher Education has acknowledged. An article that the magazine published on the issue in February pointed out that for years schools had claimed that university admission arrangements were biased against state school students while top universities had retorted that they admitted a disproportionate number of independent school students simply because they were more qualified. The article s author then added: But there are signs that the debate is shifting. The publication of one piece of research in particular, which shows that attainment is the key to university entry, has been key [this showed that] once academic achievement has been taken into account, pupils from lower socioeconomic backgrounds were more or less equally likely to go to university as their more advantaged peers, and to an institution of equal status. Closing reflections The timing of the IOE research on HE funding and participation was certainly fortuitous in terms of being able to have a direct impact on government policy. Key policy questions prompted the research in the first place and hence findings were relevant and timely. That said, the extensive dissemination activities that the researchers undertook to promote this work also played an extremely important role in ensuring its influence. n 6

8 Higher education participation and funding Further reading Outputs from the projects include: Chowdry, H., Crawford, C., Dearden, L, Goodman, A. and Vignoles A. (2010) Widening participation in higher education: analysis using linked administrative data, Institute for Fiscal Studies working paper, org.uk/publications/4817. Chowdry, H., Dearden, L. and Wyness, G. (2010), Higher education reforms: progressive but complicated with an unwelcome incentive, IFS Briefing Notes, BN publications/5366 Crawford, C., Chowdry, C., Vignoles, A., Powdthavee, N., Goodman, A., Machin, S., McNally, S., Hussain, I., Gibbons, S. and Telhaj, S. (2008) Widening participation in Higher Education: a quantitative analysis - TLRP Research Briefing 39, (London, TLRP) Vignoles+RB+39+FINAL.pdf. Dearden, L., Fitzsimons, E. and Wyness, G. (2011), The impact of tuition fees and support on university, CEE discussion paper no. 126, July. ceedps/ceedp126.pdf Vignoles, A. and Powdthavee, N. (2009) The socioeconomic gap in university dropouts, The B.E. Journal of Economic Analysis & Policy: Vol. 9 : Iss. 1 (Topics), Article 19. DOI: / Available at: bejeap/vol9/iss1/art19.-- i

9 Case study on the impact of IOE research Notes 1 More formally known as the Independent Review of Higher Education Funding and Student Finance 2 Higher Education: Students at the Heart of the System, Cm London: Stationery Office rackcdn.com/ wp-students-atheart.pdf 3 Ibid. 4 The Labour Force Survey is a quarterly sample survey of UK households that is conducted by the Office for National Statistics. It provides information on the labour market that can be used to develop, manage, evaluate and report on government policies. 5 Attwood, R., Mind the gap, Times Higher Education, February 25, Hodges, L., New website gives wannabe students vital information about drop-out rates and earnings, Independent, March 18, December 9, March 16, guardian.co.uk/higher-education/ speakers-list?intcmp=ilcnettxt May 4, Lorraine Dearden s presentation to the Browne Review on January 28, 2010 can be viewed here com/ The presentation that Anna Vignoles made to the Browne Review on May 21, 2010 is at 13 Universities UK is the representative organisation for the UK s universities. 14 May 17, The comment was made in a private exchange between Professor Dearden and the government official. Professor Dearden has retained the correspondence. 16 Government Social Mobility Strategy, (2011) Opening doors breaking barriers, cabinetoffice.gov.uk/social-mobility/ opening-doors-breaking-barriers.pdf 17 She addressed a conference sponsored by the Carnegie Corporation of New York and the Sutton Trust, which took place between June 1 and 3, Help for young people in the recession, speech by David Willetts, January 9, Comments made in an exchange. 20 The Universities and Colleges Admissions Service is the organisation responsible for managing applications to higher education courses in the UK. 21 correspondence. 22 This classification system was developed by Professor Sandra Nutley See: Nutley, S., Walter, I., Davis, H. (2007) Using Evidence. How Research can Inform Public Services. Bristol: Policy Press. 23 Attwood, R., Mind the gap, Times Higher Education, February 25, The Russell Group represents 20 leading UK universities. ii

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