Is our HE system too complicated?

Now that we have reached the 50th anniversary of the Robbins report, which paved the way for the mass expansion of the UK higher education system, it is worth examining whether our system of university finance has evolved accordingly.

In terms of finance, we’ve come a long way from the days of Robbins. Back in 1963, the system consisted largely of maintenance grants for poor students. There were none of the tuition fee loans, maintenance loans or bursaries that are such important aspects of today’s system. While we can argue about whether asking students to contribute to their education is a good or bad thing, there’s no doubt about the increasing complexity that the introduction of these aspects of finance has brought.

As a researcher into higher education, I’m ashamed to say that I have never actually seen the student finance application form (apart from when I filled it out myself all those years ago). But a few days ago I performed a quick google search and came up with the goods.

At 34 pages long, it’s certainly lengthier than my somewhat dim memory holds – and it’s pretty complicated. What’s particularly troubling is the 10 page section that parents of students must fill in for their offspring to get access to fee and maintenance loans, and where applicable, maintenance grants. This section involves questions about pension contributions, income from investments and so on.

Parents who fill in tax returns will be used to dealing with such documentation, but what about those who aren’t? Could this put students from poorer backgrounds off applying for finance and in turn put them off actually attending university in the first place? Not the massification that Robbins dreamed of.

Research from the US – where applications for university finance are notoriously lengthy – shows how complex forms can indeed be a barrier to access. But there are ways around this problem. After all, the government already knows the annual income of most citizens – not only through the tax returns of those obliged to complete them, but also through applications for child tax credits, income support, housing benefit – the list goes on.

It doesn’t seem like much of a leap to link this information into prospective students’ application forms, which can already be filled out online. Further US research suggests this sort of government intervention (or nudge, as it is otherwise known) can boost loan and grant take-up and even widen participation in university itself.

But it’s not just the forms that make our system complicated. Our entire system of repayment is crying out for simplification. Student maintenance loans, for example, are means-tested in such a way that they rise with parental income as maintenance grants fall, peak at parental incomes of around £42,600 (when maintenance grants fall to zero), and then fall again as students are deemed too rich to qualify for more.

There is no obvious reason why this should be the case, when the government could have a simple universal loans system instead and use the means-tested grants system to even out income inequality.

Our repayment system also has a number of fairly un-intuitive characteristics. As well as having to predict their future income, decide whether it is likely to be over £21,000 per year (at today’s prices, but adjusted for future earnings growth) and calculate their resulting monthly repayments, students attempting to weigh up whether university is worth the cost must also factor in a means-tested interest rate which varies between 0-3% depending on their salary. This last point seems a particularly odd policy. Interest rates are, by themselves, a progressive means of collecting money, so designing a system with variable interest rates seems another unnecessary complication.

Research by our team at LSE published earlier this year shows that while students understand headline figures like tuition fee amounts, they are far less likely to grasp the finer details of our finance system. More worrying is the wide disparities in how much students understand depending on the school they attend and their family income background.

That we offer more financial support to students than we did in Robbins’ day is a good thing for massification. But we need to ensure we have a system that every student can easily navigate. We can help students by offering good advice and information in schools, but surely it would be far easier to make the system a little more straightforward to begin with.

This blog piece was first published on the Guardian’s HE network, 28th October 2013:

http://www.theguardian.com/higher-education-network/blog/2013/oct/28/university-student-loans-robbins-report?CMP=twt_gu

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