The most interesting finding in UCAS’ survey (presented as part of this morning’s HEPI publication) on the influence of different fee models on applicant behaviour is just how unpopular the current English funding model is.

UCAS spoke to 1,695 applicants – as in people who have already applied to an undergraduate course starting in 2024. It was a weighted sample reflective of the wider population.

After having the current undergraduate funding and repayment method explained to them, nearly a quarter (23 per cent) of this sample – to re-emphasise: people who have already applied to university – expressed some doubt as to whether they would apply to university.

Fully understanding the fee and repayment model makes even people who are already committed to applying to university reconsider their choices.

This demonstrates two things that should concern us:

• The current model of undergraduate funding and repayment is poorly understood
• When it becomes better understood, it is unpopular.

Other findings

With this lens, we can take a look at the responses to other tested scenarios – each of which is put forward by an author in the accompanying HEPI report. Increasing tuition fees in line with inflation is hugely unpopular (just under two thirds of applicants would have doubts) – this is only very slightly ameliorated if the rise is linked to TEF results, though the free text responses suggest that less prestigious (and thus, cheaper) universities would be the winners in that scenario.

On the more popular side of the coin, fees being covered by the government or (the narrow winner, slightly above significance) employer levies are most attractive to applicants. We should note that these are apparently similar in attractiveness to the baseline (current) scenario, though I feel like this could be a survey design issue.

Perhaps more surprisingly, the other tweak on the table – keeping fees at the same level, but increasing interest rates based on stepped income and removing the right to repay early, is popular among 64 per cent of applicants. It’s not a slam-dunk by any means, but it gives us a clue that the actual fairness of the system may be a wider concern among applicants than is generally realised.

It’s almost an aside, but we can also take from this research that only price differentials are really going to affect university choice – and POLAR4 quintiles (here used as a proxy for wider disadvantage) have little effect on the way applicants respond to different funding and repayment approaches.

Takeaways

Applicants clearly believe that too much of the financial burden of their studies falls on their shoulders – and the implication of these findings is it is felt employers and taxpayers need to pay a more representative share, recognising the societal and economic benefits of higher education.

One explanation for the surprising lack of popularity for the current (plan 5) system among confirmed applicants is that recent changes (the lower threshold, longer repayment window and increased socioeconomic inequity) have not been clearly explained or properly justified. When NUS is calling for the reintroduction of real interest rates on borrowing, something odd is clearly happening.

It is notable that each of these models, as presented, explicitly does not factor in the implications of growth in student numbers – this even extends as far as the London Economics modelling, which restricts itself to replaying the 2023-24 cohort under each proposed ruleset. Other variants of the LE model demonstrate that the number of students involved has a huge impact on costs and thus long-term affordability – and it is regrettable that survey data has not been used to feed likely future growth under each scenario.

The only aspect of the report that addresses growth repeats the familiar line that number controls would limit enrolment to the detriment of the nation. As usual this is at odds with the reality that full-time undergraduate numbers grew faster in the last decade with number controls (by 17.7 per cent between 2001-02 and 2011-12), than the first decade without (by 5.7 per cent between 2011-12 and 2021-22).

The size and shape of the sector is always a government choice – whether this is expressed by active funded expansion or real-terms defunding as a means of limiting growth. Any future funding model needs to start from the evidence-based presumption that sector expansion is the best means of driving innovation, productivity, and economic recovery – and that any sane government would realise this.