Category Archives: Policy

Would capping student fees at £6,000 be as damaging as universities make out?

By Gill Wyness (UCL Institute of Education, Centre for Economic Performance, London School of Economics, and EconomicsofHE)

Labour’s much anticipated but yet-to-be confirmed policy to reduce the cap on university tuition fees from £9,000 to £6,000 a year will be highly expensive, could leave universities £10 billion out of pocket – and would only help richer graduates. That, at least, has been the tone of a growing chorus of alarm sounding ahead of what might be one of Ed Miliband’s key pre-election pledges.

Universities are right to be concerned – they may well lose money out of this policy. It also appears a somewhat opportunistic move by Labour to please a proportion of the electorate. But despite this, there are reasons why the policy should not be totally condemned.

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University admissions data must be made available to academic researchers

By Vikki Boliver (University of Durham)

More than half a dozen academic studies have found that university applicants from ethnic minority and state school backgrounds are less likely to be offered places than comparably qualified white and privately educated peers (see Taylor 1992; Shiner and Modood 2002; Zimdars, Sullivan and Heath 2009; Boliver 2004; Boliver 2013; Boliver 2015; and Noden, Shiner and Modood 2014. The latest study indicates that offer rates from Russell Group universities are 3 to 16 percentage points lower for British ethnic minority applicants than for white British applicants, even after controlling for differences in grades and the possession of so-called ‘facilitating subjects’ at A-level. The same study also shows that offer rates from other ‘Old’ and ‘New’ universities are 3 to 4 percentage points lower for some ethnic minority groups relative to the white group after A-level attainment has been taken into account. There is clearly an urgent need to understand what causes these disparities in university admissions chances, but access to the individual-level data needed to do this kind of research is being closed down.

The Universities and Colleges Admissions Service (UCAS) decided recently that it will only supply aggregated applications and admissions data to academic researchers. This is surely unacceptable.

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Choosing the type of income-contingent loan: risk-sharing versus risk-pooling

By Maria Racionero & Elena Del Rey, Centre for Economic Policy Research, Research School of Economics, Australian National University

There is a growing trend around the world towards increasing students’ contributions to the cost of higher education. One of the advantages is that, when students pay for their education, they do so in the country where they study. Relying on tuition fees to finance higher education can however be both inefficient and unfair, preventing access to higher education to liquidity constrained but academically deserving individuals. Even if loans are available, risk aversion can negatively affect participation. Income-contingent loans (ICLs) provide insurance against adverse labour market outcomes by making repayments dependent on the amount of income earned. In particular, no repayment is typically due when earnings are below a minimum income repayment threshold. Australia was the first country to implement in 1989 an ICL scheme to finance the cost of higher education, and other countries have since adopted similar schemes. These schemes have traditionally relied on general taxation to finance part of the cost of education, and most notably the cost of education of those unable to achieve the minimum income repayment threshold.

In Chapter 8 of “The Mobility of Students and the Highly Skilled: Implications for Education Financing and Economic Policy”, we explore the choice between two types of ICLs: one partly subsidised, often denominated risk-sharing ICL, where the cost of the education of the unsuccessful students falls on the taxpayer; and the other self-financed, often denominated risk-pooling ICL, where the cost of the education of the unsuccessful students falls on the successful graduates of the cohort. Our purpose is to capture the situation faced by governments, such as those in Australia or UK, considering switching from partly subsidised to mostly self-financed funding schemes, while still providing insurance through income contingent repayments.

We consider individuals who are risk-averse and differ in their ability to benefit from education and inherited wealth. We first compare the higher education participation achieved with each scheme. We then show how each individual’s preference over the schemes depends on her ability and wealth and characterise the majority voting outcome. We identify circumstances under which the self-financing ICL is supported by a majority, even if a proportion of those who always study regardless of the scheme in place – precisely those with relatively higher wealth and ability – prefer the subsidised to the self-financed ICL.

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International mobility and career consolidation of European researchers

By Elisabetta Marinelli (Institute for Prospective Technological Studies, Joint Research Centre, European Commission, Seville, Spain), Fernandez-Zubieta Ana (Institute for Advanced Social Studies-Spanish National Research Council (IESA-CSIC) and Elena-Perez Susana (Institute for Prospective Technological Studies, Joint Research Centre, European Commission,  Seville, Spain)

DISCLAIMER: The views expressed are those of the authors and do not necessarily reflect the position of their institution of employment.

The mobility of researchers, particularly internationally, has been encouraged at the policy level to promote enriching experiences, build networks and facilitate the processes of knowledge and technology generation and dissemination. We estimate the impact of international research mobility on the careers of established university researchers working in five European countries—France, Germany, Italy, the Netherlands, and the United Kingdom. We find that stayers and researchers who return to the country of their PhD, are the most likely to achieve tenure, and repeat-migrants  – who have left the country of their PhD and moved countries again since – are the least likely.

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Paying out and crowding out? The Globalisation of Higher Education

by Richard Murphy and Steve Machin

Since 1994 the total number of overseas students in UK universities has quadrupled. Currently there are 266,000 full-time overseas students studying in the UK. This is excluding the 110,000 students from the remainder of the EU who are counted as Home students for student financing purposes.

The postgraduate sector has seen the strongest growth in overseas students in terms of proportions and absolute numbers. There are now over five times as many overseas taught postgraduates than there were in 1994, increasing from 28,000 then to 140,000 by 20011/12 (Figure 1). They now represent 48% of masters students, and when including non-UK EU students this raises to 60%.

Its easy to see why universities like to recruit overseas students. Their fees are typically higher than domestic students (particularly for undergraduates whose fees are capped in the UK) so they can considerably boost funding at a university. The fees from overseas students now contribute 11.6% of the total income of the higher educational sector. Moreover their higher tuition fees make up 39% of all fee income despite only accounting for 15% of all student places.

A critical policy question therefore is, what impact has this rapid influx of international students had on the number of places available for domestic UK students? Have universities taken on overseas students at the expense of domestic students, or have they used this increased funding to expand the number of places available for domestic UK students?

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