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  • 30th May 2019

The Augar review: what behavioural science tells us about education fees and grants

Why the framing of financial support matters almost as much as giving it

The long-awaited Augar review of UK post-secondary education is out today, offering its verdict on the tuition fee debate. The recommendation? Cut tuition fees by nearly a fifth, to about £7,500 a year, while increasing funding for vocational courses and improving access to maintenance grants.

We know the upfront cost of studying is a far bigger deterrent to learning than it should be from a purely economic standpoint. This is due to ‘present bias’ – our tendency to overvalue immediate costs or benefits, while undervaluing future costs or benefits.

Potential students can be put off by the immediate cost of a degree or other course even if they know it will pay off in the long-term (or not require repayment until they start earning).This may explain why numbers of disadvantaged adult and part-time learners have fallen fastest – as the upfront costs of studying, in terms of both fees and lost earnings, are most salient for those already in the workforce.

Evidence suggests that the proposals in today’s review would be very positive for social mobility – enabling more low-income learners to study and levelling the playing field across vocational and academic routes.

However, the government should also consider how people access funding and find out about the financial options available to them. Behavioural science highlights how important the exact framing of fees, loans, and grants can be to learners’ study decisions. Recent studies suggest the following three lessons:

  • Applications for financial aid should be as simple as possible: A large trial in the US found that assistance to complete financial aid application forms increased university attendance by 10-15 per cent, rising to around 30 per cent after 3 years. This simple support increased university attendance and decreased dropout rates. Similar changes in the UK system would likely increase uptake – and could significantly improve education outcomes for lower-income students.
  • Earlier promises about bursaries can make a difference: Instead of offering bursaries after someone has applied, early promises of free tuition to high attainers have been shown to increase applications from low-income students. A large trial in the US found that contacting students with encouragement to apply to a selective university and a promise of free tuition if admitted more than doubled entry rates for low-income students. The extra applications came from students who would otherwise have attended less selective institutions.
  • Don’t focus too much on finances: Messages about the financial benefits of university can sometimes have a backfire effect – perhaps by unintentionally triggering money worries or feelings of non-belonging. In a trial with 2,645 students across ten schools in Somerset, we sent students cards with simple messages about finances (see below). The cards had a statistically significant negative impact on aspirations – making students less likely to want to attend university. By contrast, a talk that provided the same factual information as well narrative information about the speaker’s life significantly increased aspirations (by more than 8 percentage points).

Today’s proposals are positive, but we also recommend further studies into the impact of bursaries or grants on students’ feelings of belonging and levels of anxiety. A large body of psychology research from the U.S. shows that students can suffer stereotype threat if they are in the minority and feel, even subconsciously,  that they may conform to negative stereotypes about their group. There is a risk that regular messages about bursaries could unintentionally exacerbate feelings of non-belonging – and the framing of these messages clearly requires very careful consideration.

Please get in touch if you are interested in exploring how best to communicate loans, bursaries or grants to students – or would like to learn more about BIT’s further and higher education research.

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