Maintenance… of student hardship

Augar was an opportunity to reset the debate around student maintenance. Sadly, it looks like the panel has sidestepped that opportunity to have a debate about debt instead.

First, in the “Student contribution system“ section, the report uses recent research carried out for the Department for Education (DfE) to buttress its focus on the balance between grants and loans rather than overall support – it says that the research “showed that the income-contingent nature of loans is the most important factor in persuading people to enter HE, despite concerns about overall costs”. So we should dig into that report. It asked applicants and students about worries – and found that 50% of applicants were equally worried about fees and living costs, and then a further 22% of applicants were worried just about living costs.

Those percentages shift for current students – the percentage worried just about fees naturally drops to 13%, but the percentage worried just about living costs rises to 44%, with another 40% worried about both. In other words, 72% of applicants and 86% of students were worried about living costs. 78% of those applying for less selective universities were worried about living costs. And applicants from a C2DE background were more likely than those from an ABC1 background to mention the availability of a maintenance loan (51% versus 38%) and the prospect of a bursary, scholarship or fee waiver (55% versus 27%).

Bizarrely, it then asks survey respondents to tick things that “helped each sample group decide to go to university”. Unsurprisingly, 61% of applicants were reassured by “Not needing to repay until I earn more than the income threshold”. But 42% ticked “Availability of maintenance loans for living costs” – rising to 52% of current students – hardly a dismissable factor. And when it asks about strength of agreement with 13 separate statements about “cost and choice relating to attending university”, it fails to ask whether the cost of studying at a particular university affected choice. Doh!

In other words, Augar has drawn conclusions that prioritise debt over day-to-day costs via research that never once asks: “I worry about having enough to live on at university”, but does ask various versions of: “I worry about having enough to live on each month once I’ve made my student loan repayment”. You don’t say.

Higher or lower than a six

Chapter Six is the actual section on maintenance, and it’s short on analysis – just three pages look at the current system, and none of them look at the research referenced above, DfE’s own student income and expenditure survey or other sources of data on affordability concerns. The only real reference point is an international comparison, that shows the Netherlands, Norway and New Zealand offering more help, and Australia, Germany and France all offering less – all without reference to actual costs.

All of that unsurprisingly leads the panel to positively conclude that debt is an issue, but dismisses cost of living – “in considering the evidence on maintenance costs” (without, apparently, considering much evidence on maintenance costs) “we do not doubt that the cost of living is a problem for students but are mindful that the overall level of support provided is high by historical standards, and competitive by international standards”. Here’s the bottom line. Find me a student that’s dropped out because they’re worried about repaying student debt in the future and I’ll eat my hat. I could find you a student that’s dropped out over cost of living and studying in five minutes.

Is there any evidence for this assertion on maintenance costs? Later the report does at least quote a DfE analysis of its own “Student Income and Expenditure” survey, which finds that median expenditure by full-time students living away from home and studying outside London is £11,679 in 2018/19 prices, significantly higher than the £8,700 maximum level of loan available and more than the £8,663 proposed – the difference is to be made up through students earning income from “employment alongside their study” – not an option for many students and a deeply harmful one for others.

But there’s a problem even here. That DfE analysis was based on its “Student Income and Expenditure” survey from 2014 (it’s not been commissioned since), and to get to 2019 numbers they’ve “uprated using the retail price index”. Trouble is, doing that would have current “away from home” FT rent at £4,858 – but Unipol/NUS data says rent has now rocketed to £6,366 – and almost £9k in London. You’ll recall that the 2014 SIES was not actually released until March 2018 (and contained all sorts of methodological flaws), but even then full-time students were paying 13% more on housing in 2014/15 than in 2011/12. That the cost of housing is rising faster than inflation has been obvious for the best part of a decade.

Choosing a benchmark

Augar goes on to use the 21-25 National Minimum Wage rate as the benchmark for maintenance – after all, “80% of undergraduate students are under 25 in age”. Is that helpful? This NMW site doesn’t think so. “The one major area where inflation remains high is housing” it notes, “which affects everyone but especially the poorest”. To put this into perspective, it goes on – a person earning minimum wage “would only just be able to afford a one bedroom flat in London. Providing they don’t eat, use power, pay council tax. or wear clothes”. Or, indeed, buy books, join societies, or pay for graduation.

There’s an interesting section on parental contributions that makes clear that concerns were raised in the call for evidence “about the impact on access made by the assumption of a parental contribution to students’ living costs”. But even having recognised the problem, the proposals offer no solutions. Martin “money saving” Lewis has long argued that the parental contribution element of the full package is hidden, although students assessed on parental income have no way to force their parents to contribute – “either their finances should be separate or they should have some ability to be able to force parents to comply”. But as well as that parental element, he’s also long argued that the total amount just isn’t enough – with an even more hidden additional parental contribution having to top up. The really honest thing to do for applicants would be to calculate the cost of living and study and show how much the government package is short by – but it doesn’t and won’t do it.

More more (less)

There are lots of other problems. London weighting and students with children are both posited as areas for further enquiry, but that DfE “Student Income and Expenditure” survey has plenty on both issues – what more evidence does the panel need? The lack of a mention of the minimum wage for those in the first year of an apprenticeship – £3.90ph, regardless of age – just looks lazy. Why are we still assessing on parental income and not wealth – or even better, not assessing either given students are adults. And the commitments on student accommodation costs notably never go near attempting explicitly to reduce them, or even slow their inflation busting growth.

The sad thing about all of this is that just like over the past decade, politicians will use application and entry rates – including from the poorest – as evidence that their policies are working. Guess what – poorer students from poorer backgrounds will continue to believe that “going to university” matters for their social mobility. But on these proposals, there will still be a chunk that work out they can’t afford to go. There will still be a bunch that think they can afford to go, and end up dropping out. And there will still be a large number that scrape by, without taking part in wider university life, without buying the books they need, without going on the “optional” field trips and working part time til 3am, that then wonder why their labour market outcomes don’t match their richer counterparts.

And when the social mobility dials still don’t move, we’ll probably commission something like Augar all over again – and ignore, again, the realities staring us in the face.