How the Student Premium actually works

It’s a frequently misunderstood funding stream.

Funding for student access and success: the Office for Students allocated £306m of it in 2023-24, with the ostensible purpose of:

meeting the needs of students who belong to groups that are underrepresented in higher education or who need additional support to achieve successful outcomes

On the face of it – a reasonable idea.

The student premium is actually a set of funding streams offering money to cover the cost of supporting students (the full time and part time outcomes premium, and a disabled students premium based on DSA and self-declaration that I’m not looking at in this piece), alongside other random things the government wants universities to do that feel like they fit in this bucket (£30m for UniConnect, which is a frequently evaluated set of projects aimed at raising aspirations among potential applicants, and a surprisingly low £15m allocation for student transitions and mental health).

Risky business

The outcomes premiums are pre-John Blake, to be clear, but on the face of it they have a very Blakeian risk-informed approach. There are twelve risk-based categories used to calculate the main allocation to providers, drawn from three attributes:

• Age (under 21 is “young”, over 21 is “mature”)
• Qualification aim (separating out “first degree” and “other undergraduate”)
• And, in most detail, Entry qualification (“low”, “medium” and “high” risk)

Curiously, the main access and participation dashboard does not include information about entry qualifications – indeed this banding of risk does not appear anywhere in Office for Students data. You can get qualifications data in the “size and shape of provision” dashboard, but this is at a higher and incompatible level of resolution than the version used in the funding allocation calculation.

• Low risk is CCC or above (for young students), and BBC or above (for mature students)
• Medium risk is a foundation course or other l3 qualifications (including those with no tariff point for young students, or CCC to BBC for mature students.
• High risk, for both age groups, is BTECs. Just BTECs. Wow.

BTEC effects

Once you have the headcounts in each of the 12 boxes you apply weightings as follows

And then apportion the total funds based on this weighted headcount. If you like algebra, this is all documented by OfS in excruciating detail. You will note here that there is nothing in this allocation to address the additional support needs of students from underrepresented areas with three decent A levels. Nothing to address very much, to be clear, apart from the enormous risks inherent within BTECs. The £67m part time pot does all of the above, but pro-rata by FTE for “part-time” students – with just under half of that going to the Open University.

The supplemental allocation does build in the idea of underrepresented students – not the same thing as disadvantaged students (but a similar group). A much smaller amount of funding (just £19m) is shared based on the application of a further weighting based on whether or not a student hails from a POLAR4 quintile 1 or 2 area – and is also seen as being at risk at risk via the calculation above. The mathematically astute among you will note that multiplication by zero means that any student possessing three good A levels will have no funding allocated for additional support needs at all, regardless of family background or economic status.

Transparency and purpose

There is, as far as I can see, no way to effectively recreate this calculation based on OfS published data – the size and shape dashboards get closest but you can’t split by both age and entry qualification.

The student premium ends up having next to nothing to do with the ideas that underpin the access and participation planning process. We don’t allocate funding to support providers in addressing participation issues identified in the Equality of Opportunity Risk Register – rather an EORR-informed institutional plan unlocks the higher tuition fee level (the legacy of the old OFFA machinery). While this income premium may originally have been conceived as a means to support such activity, it now merely makes educating home undergraduates slightly (rather than completely) unaffordable.

Thus far, I’ve ignored what this funding is actually used for. Remember the £256m “magic money twig” from Covid times? That was initially supposed to be a one off reallocation of student premium – meaning that as well as the academic support that was meant to stop BTEC students dropping out it could also be used for hardship funds (bespoke allocations of funding to students that were struggling financially during those unprecedented times). And if you have more students with BTECs, apparently you need more hardship funds to hand out.

An illustration

With the cost of living crisis this virement has continued, again with BTEC and mature student weightings skewing what is available to each provider for student hardship funds. Again, because we don’t have the public data to recreate this allocation we can’t meaningfully look at how this appears on a per-student basis.

Let us, however, take something of a punt – if we assume that any student has an equal chance of experiencing financial hardship, we can think about how much of the student premium is available per student FTE.

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The wildest figures are in FE colleges (filtered out by default) – far more likely to offer HE to mature students with a BTEC background). But £1 per FTE at Imperial College feels a long way from £743 per FTE at Leeds Trinity University.

The way this allocation needs to change – not least because BTECs are being phased out. Any replacement should be transparent, re-createable using public data, and – ideally – be targeted to address the support needs of students who may struggle with learning in higher education. Using funds designed for these purposes to patch up the holes in the maintenance system is not sustainable or equitable. There are real costs associated with offering higher education to non-traditional students, and it is reasonable to expect financial support for doing so.