On 7th September, I wrote about rumours that Lord Browne will recommend increasing the tuition fee cap and critiqued a lazy and misleading piece of research by the NUS. Having asked current students whether they would be deterred from studying again if fees were £7,000 per year, the NUS unveiled the shocking 'truth' that approximately 70 per cent would be put off.
I shan't go over the failings of the NUS research again as you can read them in my previous post and in a similar article on ConservativeHome; perhaps I was too strident in my criticism at points but I maintain that the NUS is deliberately pulling the wool over the eyes of the public and policymakers by publishing such figures and calling them facts.
It is heartening, therefore, to read this morning a press release from the University of Leicester, who have commissioned some research from OpinionPanel into the same subject. This vastly more robust research rubbishes the NUS survey by revealing that barely 10 per cent of students would be put off my fees of £7,000 and very few more at £10,000.
OpinionPanel have a bit of a chequered history in this area, having been guilty of a poorly executed bit of pricing analysis at the beginning of this year. Nonetheless, despite not being able to gain access to the data and research criteria itself, it does seem that this latest research is sound, in particular because they have asked applicants not current or former students.
Leicester and OpinionPanel say that higher tuition fees will not kill demand for degrees but many universities will be forced to compete on price. This is something that I and others in the industry have been saying for some time. As long ago as March 2009, Universities UK were saying that fees of £5,000 would create negligible loss in demand and up to £7,000, a market of variable fees would begin to appear as demand became more elastic. These £5,000 and £7,000 price tags have become ready reference points for the debate about tuition fees and the Leicester/OpinionPanel research does not depart from the theme.
Leicester's Director of Marketing & Communications, Richard Taylor, said: "The findings of this survey make it clear that if the cap on tuition fees is lifted much higher than £5,000 per year, many universities will find it difficult to maintain their share of preferences from prospective students unless they charge less than the maximum."
It is from these natural, mark-driven variations of demand that variable prices will derive, if universities are permitted them.
The research confirms my assertion that higher tuition fees should not scare students off as long as there are sufficient bursaries and scholarships available and clearly advertised. Leicester's Vice-Chancellor, Professor Sir Bob Burgess, maintains that what is vital is "a comprehensive system of bursaries and scholarships to ensure that students from poorer backgrounds or families with little or no experience of higher education are not disadvantaged." This is crucial and I am confident that Lord Browne's report will contain significant recommendations for reform in this area.
In addition, the 'flight to quality' referred to in the Leicester/OpinionPanel research is based overwhelmingly on the prestige of the institution and course and not on factors like the National Student Satisfaction (NSS) survey. This is a blow to 'middling' universities like the University of Leicester that, although good and occasionally brilliant institutions, cannot compete with the likes of Oxbridge or other ancients and red-bricks in terms of history or reputation.
The Russell Group universities will be raising their dusty, donnish eyebrows with joy at this revelation as it virtually presents them with a blank cheque, knowing that demand for them is relatively price inelastic. Furthermore, these older, research-intensive universities have an oligarchich control over medical schools in this country, which this report highlights as the most immune to fee increases.
Some hope for the less prestigious, newer universities lies in the fact that several of them possess world-class niche expertise. If they can demonstrate this well enough to the market then the most premium price tags should not be out of their reach, even if lesser courses will have to be reduced relatively in price or dropped entirely.
For instance, the University of Leiceter's School of Management is ranked 2nd in the country for business and management studies - second only to Oxford. Even relatively lowly institutions like the University of Worcester, ranked outside the top 100 universities, possess USPs such as the the National Pollen and Aerobiology Research Unit (NPARU), from which all of the UK's pollen forecasts are generated.
In summary, the Leicester/OpinionPanel research sends out two chief messages.
First, higher tuition fees (backed up by well advertised scholarships and bursaries) will not deter potential students in their hundres of thousands, as much as the NUS would like us to believe. That trades union has assumed a mantel of extreme intransigence and arrogance on the issue, unwilling to countenance even a shred of evidence contrary to their stance. The response by the University of Leicester's Student Union to the research did not address the findings head-on in any way; instead their spokesperson trotted out the politburo line about student debt.
Secondly, higher fees will necessitate a market in higher education if institutions outside of the most prestigious elite are to survive as independent, valued universities of expert study and research. Raising the cap to £7,000 or more will be futile if universities are not allowed to vary fees across courses. Only in this way can they stand out from the crowd and let their core expertise shine.
After all, the University of Worcester is never going to send forth the country's finest history graduates. But it might work out how to save our honey bees.
I'm enjoying your articles on HE funding, and it is good to have someone who is informed blogging about it
ReplyDeleteHi Nik, a lively article. And glad you rate the work with did with Leicester. But I'd like to know more about our "chequered history in this area, having been guilty of a poorly executed bit of pricing analysis at the beginning of this year." How so? The work was conducted with Anna Vignoles, Professor of Economics of Education at the IoE and quite carefully constructed. It used a very large sample and the caveats and limitations of the analysis were, I thought, clearly set out. Ben Marks, Managing Director, Opinionpanel
ReplyDeleteHi Ben, pleased to respond. The research published in February, with Prof Vignoles, did raise valuable points about fees but myself and my colleagues at the time questioned some of the interpretation.
ReplyDeleteThe biggest issue is that the survey focuses on the price at which students reject paying for degrees. Rejection was seen as a close proxy to demand, which isn't true. The conclusion that "if tuition fees were increased to £6,000, then approximately 60 per cent of students would reject a course" cannot be interpreted as "because 60 per cent say no, 40 per cent would say yes".
In our own research, we found that where 50% of students indicated that a certain degree price was too expensive, only 10% felt it was acceptable, so there's a big difference in the price at which people say they certainly will & won't buy something. Just because I definitely wouldn't buy a new television for £3,000 does not mean I definitely would for £2,900.
Also, the survey questioned existing students, something that the latest research has corrected. It was no surprise that the least-rejected price in the former survey was the current capped tuition fee level of £3,000 (approx). This accounts for the counter-intuitive discovery that more students would pay £3,000 than £2,900. While price is in some cases an indicator of quality, demand for top-quality degrees wouldn't fall if the price fell.
All in all, we believed that the survey published in February inflated willingness to pay. As it happens, it wasn't anything like what the NUS puts forward, with very questionable methodology telling us that student demand would collapse if fees went up at all. While we endorsed your findings that students would be willing to pay higher fees, we did feel that there were significant limitations in how it could be interpreted. There was nothing wrong with the research itself, but we didn't think that the conclusions made could entirely be drawn from it.
Nik, we tried to ensure that the report acknowledged it’s limitations and I think your quote is taken out of context. Throughout our report (both the full version and the free summary) we emphasise that the focus is on differences in rejection levels rather than absolute numbers. Differences by institution, differences by subject area and differences by the students’ background. We don’t focus on absolute numbers because willingness to pay is, at present, completely determined by the cap. Currently it’s manifest that there is no fees market. It simply doesn’t exist. Apart from the fact that all institutions charge just over £3k, HEFCE funding for each place ranges from about £4000 to about £16,000 so it makes much more sense for an HEI to get an extra bum on a seat, than it does for them to charge marginally more in fees (even if they were allowed to) so once again, it’s not a market. The February research was essentially about perceptual differentials. We questioned students just after they had started university while the selection process was still fresh in their minds. These people had come to the end of their university search and probably had a clearer idea of how their university / course stacked up against the competition than anyone. Sometimes speaking to applicants does make more sense but please remember that whoever you speak to when conducting research there’ll be compromises. Parents do much of the funding but they aren’t the ones doing the in-depth research into courses, institutions, etc. Applicants are on a continual conveyor belt of choosing, rejecting, taking exams and then waiting to see if they’ve made the grade. When is the perfect time to speak to them? Whenever you choose to time your research, whichever sample base you look at, there will be some objections.
ReplyDeleteBut our research did show some important things – and I’m disappointed that they’re effectively glossed over by you. Most commentators have said that our work on pricing analysis in this area has been pioneering – we started just after the introduction of the £3k cap; is based on extremely good fieldwork (all respondents are reached within a few months of starting their university careers) and all respondents have verified their ‘ac.uk’ email address. Furthermore our research is based on absolutely massive sample sizes (36,000 interviews at the time of the February report; by next April the database will be closer to 60,000). And that means it’s robust and can be viewed at a very granular level.
The point of our research was never to predict pricing but has always been to demonstrate differentials – as we state, “Each institution needs to determine its place in the market and price accordingly.” But we also pointed out – perhaps for the first time – that “...it was not the type of institution that was the most important driver of how much students were willing to pay for their degree, but subject area, suggesting that differential fees by subject as well as institution are likely. Students taking subjects which command a high wage in the labour market are more willing to pay higher fees.” Finally we acknowledged the key issues around social equality. “More able and socially advantaged students were, perhaps unsurprisingly, willing to pay higher fees. Institutions, therefore, need to be aware of the potentially adverse effect of raising fees for particular sub-groups of students, particularly those from disadvantaged backgrounds. Even though these poorer students may be exempt from fees altogether, universities have an important role in explaining this fact to more disadvantaged students to prevent them from being discouraged from participating altogether or limiting the universities or courses they might consider due to the apparent high costs.”
I hope this has been a useful clarification. Meanwhile I stand by our research and hope that you now see its merit:-) Ben
Nik, we tried to ensure that the report acknowledged it’s limitations and I think your quote is taken out of context. Throughout our report (both the full version and the free summary) we emphasise that the focus is on differences in rejection levels rather than absolute numbers. Differences by institution, differences by subject area and differences by the students’ background. We don’t focus on absolute numbers because willingness to pay is, at present, determined by the cap. Currently it’s manifest that there is no fees market. It simply doesn’t exist. Apart from the fact that all institutions charge just over £3k, HEFCE teaching funding ranges from about £4000 to about £16,000 so it makes much more sense for an HEI to get an extra bum on a seat, than it does for them to charge marginally more in fees (even if they were allowed to) so once again, it’s not a market. The February research was essentially about perceptual differentials.
ReplyDeleteWas our timing right or wrong? We questioned students just after they had started university while the selection process was still fresh in their minds. These people had come to the end of their university search and probably had a clearer idea of how their university / course stacked up against the competition than anyone. Sometimes speaking to applicants does make more sense but please remember that whoever you speak to when conducting this type of research there’ll be compromises. Parents do much of the funding but they aren’t the ones doing the in-depth research into courses, institutions, etc. Applicants are on a continual conveyor belt of choosing, rejecting, taking exams and then waiting to see if they’ve made the grade. When is the perfect time to speak to them? Whenever you choose to time your research, whichever sample you look at, there will be objections for certain quarters.
But our research did show some important things – and I’m disappointed that they’re effectively glossed over by you. Most commentators have said that our work on pricing analysis in this area has been pioneering – we started just after the introduction of the £3k cap; is based on extremely good fieldwork (all respondents are reached within a few months of starting their university careers) and all respondents have verified their ‘ac.uk’ email address. Furthermore our research is based on absolutely massive sample sizes (36,000 interviews at the time of the February report; by next April the database will be closer to 60,000). And that means it’s robust and can be viewed at a very granular level.
The point of our research was never to predict pricing but has always been to demonstrate differentials – as we state, “Each institution needs to determine its place in the market and price accordingly.” But we also pointed out – perhaps for the first time that, “...it was not the type of institution that was the most important driver of how much students were willing to pay for their degree, but subject area”, suggesting that differential fees by subject as well as institution are likely. Students taking subjects which command a high wage in the labour market are more willing to pay higher fees. Finally we acknowledged the key issues around social equality. “More able and socially advantaged students were, perhaps unsurprisingly, willing to pay higher fees. Institutions, therefore, need to be aware of the potentially adverse effect of raising fees for particular sub-groups of students, particularly those from disadvantaged backgrounds. Even though these poorer students may be exempt from fees altogether, universities have an important role in explaining this fact to more disadvantaged students to prevent them from being discouraged from participating altogether or limiting the universities or courses they might consider due to the apparent high costs.”
I hope this has been a useful clarification. Meanwhile I stand by our research and hope that you now see its merit.
Nik, we tried to ensure that the report acknowledged it’s limitations and I think your quote is taken out of context. Throughout our report (both the full version and the free summary) we emphasise that the focus is on differences in rejection levels rather than absolute numbers. Differences by institution, differences by subject area and differences by the students’ background. We don’t focus on absolute numbers because willingness to pay is, at present, determined by the cap. Currently it’s manifest that there is no fees market. It simply doesn’t exist. Apart from the fact that all institutions charge just over £3k, HEFCE teaching funding ranges from about £4000 to about £16,000 so it makes much more sense for an HEI to get an extra bum on a seat, than it does for them to charge marginally more in fees (even if they were allowed to) so once again, it’s not a market. The February research was essentially about perceptual differentials.
ReplyDeleteWas our timing right or wrong? We questioned students just after they had started university while the selection process was still fresh in their minds. These people had come to the end of their university search and probably had a clearer idea of how their university / course stacked up against the competition than anyone. Sometimes speaking to applicants does make more sense but please remember that whoever you speak to when conducting this type of research there’ll be compromises. Parents do much of the funding but they aren’t the ones doing the in-depth research into courses, institutions, etc. Applicants are on a continual conveyor belt of choosing, rejecting, taking exams and then waiting to see if they’ve made the grade. When is the perfect time to speak to them? Whenever you choose to time your research, whichever sample you look at, there will be objections for certain quarters.
But our research did show some important things – and I’m disappointed that they’re effectively glossed over by you. Most commentators have said that our work on pricing analysis in this area has been pioneering – we started just after the introduction of the £3k cap; is based on extremely good fieldwork (all respondents are reached within a few months of starting their university careers) and all respondents have verified their ‘ac.uk’ email address. Furthermore our research is based on absolutely massive sample sizes (36,000 interviews at the time of the February report; by next April the database will be closer to 60,000). And that means it’s robust and can be viewed at a very granular level.
The point of our research was never to predict pricing but has always been to demonstrate differentials – as we state, “Each institution needs to determine its place in the market and price accordingly.” But we also pointed out – perhaps for the first time that, “...it was not the type of institution that was the most important driver of how much students were willing to pay for their degree, but subject area”, suggesting that differential fees by subject as well as institution are likely. Students taking subjects which command a high wage in the labour market are more willing to pay higher fees. Finally we acknowledged the key issues around social equality. “More able and socially advantaged students were, perhaps unsurprisingly, willing to pay higher fees. Institutions, therefore, need to be aware of the potentially adverse effect of raising fees for particular sub-groups of students, particularly those from disadvantaged backgrounds. Even though these poorer students may be exempt from fees altogether, universities have an important role in explaining this fact to more disadvantaged students to prevent them from being discouraged from participating altogether or limiting the universities or courses they might consider due to the apparent high costs.”
I hope this has been a useful clarification. Meanwhile I stand by our research and hope that you now see its merit.
Nik, we tried to ensure that the report acknowledged it’s limitations and I think your quote is taken out of context. Throughout our report (both the full version and the free summary) we emphasise that the focus is on differences in rejection levels rather than absolute numbers. Differences by institution, differences by subject area and differences by the students’ background. We don’t focus on absolute numbers because willingness to pay is, at present, determined by the cap. Currently it’s manifest that there is no fees market. It simply doesn’t exist. Apart from the fact that all institutions charge just over £3k, HEFCE teaching funding ranges from about £4000 to about £16,000 so it makes much more sense for an HEI to get an extra bum on a seat, than it does for them to charge marginally more in fees (even if they were allowed to) so once again, it’s not a market. The February research was essentially about perceptual differentials.
ReplyDeleteWas our timing right or wrong? We questioned students just after they had started university while the selection process was still fresh in their minds. These people had come to the end of their university search and probably had a clearer idea of how their university / course stacked up against the competition than anyone. Sometimes speaking to applicants does make more sense but please remember that whoever you speak to when conducting this type of research there’ll be compromises. Parents do much of the funding but they aren’t the ones doing the in-depth research into courses, institutions, etc. Applicants are on a continual conveyor belt of choosing, rejecting, taking exams and then waiting to see if they’ve made the grade. When is the perfect time to speak to them? Whenever you choose to time your research, whichever sample you look at, there will be objections for certain quarters.
But our research did show some important things – and I’m disappointed that they’re effectively glossed over by you. Most commentators have said that our work on pricing analysis in this area has been pioneering – we started just after the introduction of the £3k cap; is based on extremely good fieldwork (all respondents are reached within a few months of starting their university careers) and all respondents have verified their ‘ac.uk’ email address. Furthermore our research is based on absolutely massive sample sizes (36,000 interviews at the time of the February report; by next April the database will be closer to 60,000). And that means it’s robust and can be viewed at a very granular level.
The point of our research was never to predict pricing but has always been to demonstrate differentials – as we state, “Each institution needs to determine its place in the market and price accordingly.” But we also pointed out – perhaps for the first time that, “...it was not the type of institution that was the most important driver of how much students were willing to pay for their degree, but subject area”, suggesting that differential fees by subject as well as institution are likely. Students taking subjects which command a high wage in the labour market are more willing to pay higher fees. Finally we acknowledged the key issues around social equality. “More able and socially advantaged students were, perhaps unsurprisingly, willing to pay higher fees. Institutions, therefore, need to be aware of the potentially adverse effect of raising fees for particular sub-groups of students, particularly those from disadvantaged backgrounds. Even though these poorer students may be exempt from fees altogether, universities have an important role in explaining this fact to more disadvantaged students to prevent them from being discouraged from participating altogether or limiting the universities or courses they might consider due to the apparent high costs.”
I hope this has been a useful clarification. Meanwhile I stand by our research and hope that you now see its merit.
Nik, we tried to ensure that the report acknowledged it’s limitations and I think your quote is taken out of context. Throughout our report (both the full version and the free summary) we emphasise that the focus is on differences in rejection levels rather than absolute numbers. Differences by institution, differences by subject area and differences by the students’ background. We don’t focus on absolute numbers because willingness to pay is, at present, determined by the cap. Currently it’s manifest that there is no fees market. It simply doesn’t exist. Apart from the fact that all institutions charge just over £3k, HEFCE teaching funding ranges from about £4000 to about £16,000 so it makes much more sense for an HEI to get an extra bum on a seat, than it does for them to charge marginally more in fees (even if they were allowed to) so once again, it’s not a market. The February research was essentially about perceptual differentials.
ReplyDeleteWas our timing right or wrong? We questioned students just after they had started university while the selection process was still fresh in their minds. These people had come to the end of their university search and probably had a clearer idea of how their university / course stacked up against the competition than anyone. Sometimes speaking to applicants does make more sense but please remember that whoever you speak to when conducting this type of research there’ll be compromises. Parents do much of the funding but they aren’t the ones doing the in-depth research into courses, institutions, etc. Applicants are on a continual conveyor belt of choosing, rejecting, taking exams and then waiting to see if they’ve made the grade. When is the perfect time to speak to them? Whenever you choose to time your research, whichever sample you look at, there will be objections for certain quarters.
But our research did show some important things – and I’m disappointed that they’re effectively glossed over by you. Most commentators have said that our work on pricing analysis in this area has been pioneering – we started just after the introduction of the £3k cap; is based on extremely good fieldwork (all respondents are reached within a few months of starting their university careers) and all respondents have verified their ‘ac.uk’ email address. Furthermore our research is based on absolutely massive sample sizes (36,000 interviews at the time of the February report; by next April the database will be closer to 60,000). And that means it’s robust and can be viewed at a very granular level.
...continued on my next post directly below...
...continued from previous post, directly above...
ReplyDeleteThe point of our research was never to predict pricing but has always been to demonstrate differentials – as we state, “Each institution needs to determine its place in the market and price accordingly.” But we also pointed out – perhaps for the first time that, “...it was not the type of institution that was the most important driver of how much students were willing to pay for their degree, but subject area”, suggesting that differential fees by subject as well as institution are likely. Students taking subjects which command a high wage in the labour market are more willing to pay higher fees. Finally we acknowledged the key issues around social equality. “More able and socially advantaged students were, perhaps unsurprisingly, willing to pay higher fees. Institutions, therefore, need to be aware of the potentially adverse effect of raising fees for particular sub-groups of students, particularly those from disadvantaged backgrounds. Even though these poorer students may be exempt from fees altogether, universities have an important role in explaining this fact to more disadvantaged students to prevent them from being discouraged from participating altogether or limiting the universities or courses they might consider due to the apparent high costs.”
I hope this has been a useful clarification. Meanwhile I stand by our research and hope that you now see its merit.
that's very fantastic blog i like it.
ReplyDeletei am also student that's why i love to read your article .
thanks for this .you most more great blogs in future . . . .
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