Tuition Fees Debacle – Still too early to tell

Yesterday, the University and Colleges Admissions Services (UCAS) released the application numbers following the official 15 January deadline.

The headline figure was a drop of 10 percent in UK university applications by English applicants. However, the picture is confusing. There was a drop of 4 percent in 18 year-old English applicants (indicating that school leavers are not affected greatly) and that it is the “rich” rather than the “poor” who are being more disadvantaged by the changes. Yet despite this, overseas (outside the EU) applications are up by 14 percent.

There has been much wrangling over the impact of lifting the cap on tuition fees to £9,000 per annum, but these numbers tell us very little.

First, is 2011 applications the right comparison? In the absence of a policy change we may have expected 2012 numbers to be even higher than 2011, therefore the fall is actually much greater than indicated by the 2011 figures. However, the announcement of the policy no doubt encouraged many applicants to apply last year rather than take a gap year. The 2011 figures may therefore be inflated.

Second, the ceteris paribus assumption – all else being equal – doesn’t hold. This policy didn’t happen in a vacuum. The usual alternative to going to university would be to get a job, but in the aftermath of a financial crisis with youth unemployment of over 20 percent the alternative isn’t that realistic. Further, to counteract claims that applicants from disadvantaged backgrounds would be disproportionately affected, the Government ensured that universities establish access agreements e.g. bursaries.

Third, is the (absolute) number of applications a relevant figure? It masks changes to the underlying demographics (there are fewer 18 years at present). This analysis of application rates shows that it’s one percentage point lower in 2012 for English 18 year olds than 2011, and that this rate is consistent with the trend before 2010 (when there was a large surge in applications).

Fourth, these aggregated figures mask changes across and within the sector. There will be some winners (e.g. Birkbeck has a 155 percent increase) and some losers (Basingstoke College of Technology has a 77 percent decrease) and even within institutions some programmes (e.g. medicine) may boom while others (e.g. classics) may be badly hit.

And finally, it’s not the number of applications but the number of places that’s important. We can have all the applicants in the world but if the Government continues to cut university places fewer people will be able to access higher education.

Last year 200,000 people were left without places at the end of the cycle, roughly one in three applicants. On our B.Sc. in Business Management programme at King’s we have 15 applicants for every place. Thus, top universities still have vastly more applicants than places even with a 10 percent fall in numbers.

So my conclusion is it’s far too early to understand the effect of the fee changes. We’ll have to wait a few years to let universities adjust their prices and see what the long-term changes in higher education appear to be. My prediction is that applications to top universities will remain buoyant, and that there will continue to be a shift towards vocational degrees (e.g. law and medicine) and those that deliver high employability (e.g. economics and management). At the same time while UK universities remain world-leading and our fees are significantly lower than our American competitors, overseas applications will continue to rise.

Check back in 2015 to see if I’m right.

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