Student support crucial to offset impacts of fee increases

A European Commission international study of nine countries has found that when balanced with student support, increased tuition fees do not have an overall negative impact on higher education enrolments. But it stresses that grants or loans are “crucial” in offsetting negative consequences of fee increases, particularly for vulnerable groups.

Entitled Do Changes in Cost-sharing have an Impact on the Behaviour of Students and Higher Education Institutions?, the report analysed the effects of different models of cost-sharing in higher education (the split between public and private contributions to higher education funding) on students and higher education institutions.

It examined trends in participation and completion in third-level education, and factors like system structure, institutional revenue and strategy over the past 15 years in nine case study higher education systems, in efforts to understand better how different models of funding – and changes to these – affect students and institutions.

The study was part of the follow-up to the agenda for the modernisation of Europe's higher education systems, adopted by the Commission in September 2011. The countries involved in the research were Austria, Canada, UK-England, Finland, Germany, Hungary, Poland, Portugal and South Korea.

Androulla Vassiliou, European commissioner for education, culture, multilingualism and youth, said: "Student fees are a reality for a large proportion of students in Europe, and a controversial issue.

“This study questions some common assumptions and provides valuable evidence for the ongoing debate in the European Union on how best to fund higher education to ensure institutions provide the highest quality of education to increasing numbers of students, while guaranteeing fair access."

Some findings

Although the authors uncovered some conclusive findings – for instance that student support was crucial for offsetting the impact of university tuition fee increases – they also said higher education data systems were incomplete.

The information they needed to “reasonably assess the state of access to higher education in many countries is fairly poor”, and in some – notably Hungary and Poland – obtaining simple information about institutional income sources was virtually impossible. Even tracking the level of tuition fees actually paid was difficult in some jurisdictions.

Notwithstanding this, the report said that when balanced with student support, increased tuition fees had no overall negative impact on enrolments in higher education, even among students from lower socio-economic groups, unless the magnitude of change was exceptional.

On the other hand, fee increases could and did result in falling enrolments among older students.

In England in 2012, after a massive increase in fees, students from low social backgrounds were not affected disproportionately by the increase: although their numbers declined, their application and acceptance rates were less affected than those of wealthier students.

The only country showing clear evidence of fees being linked to an income-related change in enrolment was professional programmes in some Canadian provinces, where sudden tuition fee rises on the scale of the English 2012 reform caused a decline in students from middle-income – though not low-income – families.

Quality gains

The researchers found that the introduction of tuition fees usually improved the system overall, by increasing the amount of resources available. As private funding for institutions increased, public revenues tended not to decrease, thus beefing up institutional income.

The few periods of decreasing public per-student income corresponded to those of either economic crisis (Canada in the 1990s) or massive enrolment growth (Poland in the 1990s to early 2000s, Austria in the late 2000s).

In these cases, overall student funding (public and private) also decreased – that is, private funding was not used to compensate.

Shifting the cost-sharing balance

The report highlighted instances where governments were the catalysts for shifts in the cost-sharing balance – in four of the case study countries: Austria, England, Germany and Portugal.

Financially, tuition fee reforms in Germany and Portugal were comparatively modest, aimed at injecting more funds into the system without altering the predominance of the public sector in higher education funding. This objective was achieved in Portugal and to some extent in Germany.

In Austria, the initial goal of introducing tuition fees was to initiate a net shift in the cost-sharing balance rather than to increase the funds available to the system. If this is the correct interpretation of the underlying policy goals, said the study, then the Austrian reform could be viewed as a short-lived success: the introduction of tuition fees changed the cost-sharing balance, but did not lead to an increase in overall funds for institutions.

In England, conversely, tuition fee reforms successively transformed the system into a model in which private contributions served as a mainstay of institutional funding of higher education.

No negative effect on enrolment

Unless the magnitude of change was exceptionally large, added the report, fee increases appeared to have no detectable negative effect on aggregate demand and enrolment.

Almost without exception among the case studies, participation rates rose throughout the analysis period regardless of fees policy, to the extent that when declines in actual enrolments were detected, they were nearly always due to demographic change rather than a negative change in participation rates.

In some countries – notably Poland and South Korea – the ability of institutions to charge fees facilitated quantitative expansion of higher education.

The only places and times where participation rates appeared not to increase in the period covered by the study were Hungary between 2005 and 2010, where a dual fee structure was in place but no real change in fees occurred, and Finland in the same period, where no fees were payable.

The study also looked at enrolment in connection with changes to the net costs for students – that is, total costs minus study aid of various forms.

As mentioned, fee increases had few effects either on total enrolments or on most vulnerable populations like students from low social backgrounds. This was probably because with few exceptions, fee hikes were usually accompanied by rises in offsetting forms of study aid.

In England, for instance, tuition fee increases were fully offset by loans; in Canada, rises were for the most part offset by changes in grants and tax credits. Poland and South Korea also had significant increases in study aid – grants in the former, loans in the latter.

In Austria, all recipients of need-based grants were eligible for an additional type of aid refunding tuition fees. Finnish institutions charge no fees at all, but the country has a substantial student support system, which is certainly one reason why participation rates in Finland are among the highest in Europe.

Key findings

Key findings were that finding the right balance between fees and student support was crucial for governments when adapting fees policies.

Additionally, for higher education institutions, introducing tuition fees usually increases their total amount of resources. However, new income from fees is not always invested in ways – such as additional teaching posts – that directly improve the student experience.

Tuition fees, noted the study, appear not to make public university systems more responsive to changing demand – for example by developing new types of programmes. Instead, many other factors, including tradition, prestige and accreditation rules, influence how institutions can and do act.

COMMENTS

This neglects though the ethical argument of having tuition fees in the first place.

Christopher Weir on the University World News Facebook page


Make education affordable!

Centre for International Studies on the University World News Facebook page