The (hidden) cost of everything and the value (for money) of nothing

Imagine if there was something inside the control of the provider where you work that was punting up a paltry 39% agreement score on the NSS.

Then imagine that that issue was not only something students cared about, but was also central to your efforts to widen access, and reduce non-completion. That that issue was also vital to the way graduates feel about higher education – and a huge component of the way that higher education and your provider’s “student experience” is funded.

Value for money

One of the stranger things about Office for Students commissioned research into Value for Money from last year is just how little attention has been given since to student costs. There’s been endless over-theorising about whether £9,000 fees represent “value for money”, but convenient silence about whether accommodation costs or gym prices or graduation fees give students appropriate bang for buck. That 39% figure was the proportion of students agreeing that institutional-levied costs that weren’t fees were good VFM. It is true that it’s hard to measure the lifetime “value” of an undergraduate degree course funded through an income contingent loan. It’s perhaps less possible to argue that there are lifelong benefits to a prawn sandwich, a can of coke and a bag of McCoys (other brands of crisps are available).

Just like the black attainment gap and the student mental health crisis, SUs have been pointing out for years that there’s a student costs crisis – but the sector hasn’t really been listening. For much of the early part of the decade, SUs running “hidden costs” campaigns reasonably believed that shining a spotlight on how expensive student life can be would somehow bring those costs down – the theory went that either providers would compete to make it cheap, or they’d be so ashamed at the situation that their moral compass would kick in.

But they didn’t work. A few early experiments at “no hidden extras” with all-in fees fell by the wayside. Competition and Markets Authority guidance making clear that costs have to be recorded and displayed just meant that they all sit there in plain sight. The total cost of participation is “too hard” to calculate, so students never get a sense of how it all adds up. Costs are impossible to compare, so the best students get are pointless graphics from marketing firms using dodgy research that students can see straight through. And anyway – many of the costs are bundled as part of that institution’s student experience. If you dream of doing subject X at institution Y, you’re saddled with the costs that come with it. And institutions know it.

The illusion of choice

Sometimes, there’s the pretence of choice. You don’t have to join the gym – you could be poor and unhealthy. You don’t have to buy a latte – you could be poor and have the private caterers ask you to put your flask away when you’re sat with your coursemates. You don’t have to live on campus – but if you don’t you’ll be left out and lonely. You don’t have to do that field trip – but both the educational and social capital benefits will flow to those that do. And Cinderella doesn’t have to go to the academic society ball. But you can be sure that it’d be easier to get on the career ladder if she did.

Given the high costs and the regularity with which student hardship features in research into reasons for non-continuation, you’d also assume that getting participation costs down – particularly those inside the control of providers – would be a goal embedded into access agreements. And it’s been particularly heartening to see repeated calls for institutions to consider holistically the signals they send about “normal” or “average” students when it comes to where students live, or their ethnicity or their disability as part of the design of Access and Participation plans.

But despite most of the guidance and much of the sector rejecting the “deficit” model, almost all the initiatives featured in access agreements on student costs have been wedged firmly inside it. It’s hard to find a single university working holistically to reduce the costs that students face – instead a panoply of hardship funds and thematic bursaries are carefully targeted at poorer students to enable them, sporadically and episodically, to have the resources to live up to their providers’ unspoken definition of what a “normal” student is at that place. The horse turns back into the mouse all too quickly.

The result is that “pandering to the poor” is left to the WP unit – whilst those that make reading lists ever longer, or set accommodation fees, or design field trips, or price up a latte, or promote years abroad, or set a price for gym membership are all free to design a student experience that the existing student body can afford. They’re under pressure not to get that cost down, but to maximise the revenue from it to fund the “student experience” displayed on the website. And that cycle of privilege ratchets ever further up.

Policy possibilities

Government attitudes here don’t help. So desperate have successive governments been to point out that “no-one pays up front” that they’ve spent decades hiding the fact that the gap between what a student receives in maintenance and their costs is to made up by parents – a contribution that has long since stopped being calculated for fear of putting people off. The vast regulatory hole in the fees system doesn’t help either. There’s precious little point in setting a maximum tuition fee if there’s no regulation on what else you can charge for.

Those thinking that extra costs for students is an English problem (or that the Nations have a solution) could also be disappointed. That 39% figure is UK wide. Ian Diamond’s funding review panel in Wales was so worried that universities would jack up the costs of study to soak some of the increased maintenance funding that it set a clear expectation that there would be no major increases in costs – and proposed that HEFCW should collect the prices of a basket of goods for each university and publish them. What a pity that that recommendation appears to have been forgotten by the Welsh Government.

We do need a solution to the biggest cost of all – accommodation. It’s hard to blame the cost of rent on anyone (and as a result responsibility is taken by no-one), but a recognition that institutions have considerable agency (and in some cases control) would be a start. Giving poorer first years a £1,000 discount on a room that you make £1,250 on is pretty cheeky. Working out how to wean yourself off the surpluses over time would help. And if the only way to house those 2,000 extra students you’re planning for is through a rent ratchet agreed with a private provider, maybe you should re-think your expansion plans instead of overheating your local housing market and annoying the locals in the process.

We also don’t know nearly enough about what’s going on with other costs that providers control. Every time a student officer has the temerity to point out the difference between income and expenditure on residences in their provider’s HESA numbers, their institution’s management argues that the figures don’t say what the SU thinks they say. HESA really ought to be helping by collecting data on every penny outside of fees that institutions collect from students (optional or not), and the direct costs associated with those items.

[full screen]

If OfS is serious about its IAG strategy, it should jump on the student elephant in the room and identify a way both to to work out how much taking part in a course costs at an institution, and to enable cut throat competition over those costs. And it it ever gets round to delivering a VFM strategy, it should put that satisfaction with additional costs question into the NSS. It’s rightly easy to be against marketisation and rampant competition when it comes to fees and student numbers – but on the assumption that full communism over university catering isn’t on the horizon, some increased competition over costs in the student interest could really help.

One response to “The (hidden) cost of everything and the value (for money) of nothing

  1. Great article with some fantastic insight.

    I thought it would be worth highlighting the work Which? University has done in this space. Whilst there are some important conversations to have on policy solutions to these issues, we’ve been looking at how prospective students and their families can be aware of the facts around cost of living when making important choices about their future.

    Last year we launched a student budget calculator to help plan ahead for the living costs involved with university life. It’s completely free, as the entire use of Which? University is, and you can download your breakdown to use later or share with others. You can also personalise the costs depending on circumstances.

    You can access it here; https://university.which.co.uk/student-budget-calculator

    Thanks, Paul at the Which? University team

Leave a Reply