To ask the Secretary of State for Business, Innovation and Skills what assessment he has made of the likely effects on the behavioural patterns of potential undergraduates in respect of making applications to higher education institutions of his proposed changes to higher education funding; what evidence he took into account in making this assessment; and if he will make a statement.
To support the Browne Review and the Government's response, we commissioned research by the Institute for Fiscal Studies (IFS) to explore how changes in fees, grants and loans impact on participation. This research drew on variation in grants, fees and loans over the period 1992-2007, and indicated that a £1,000 increase in fees results in a 4.4ppt decrease in university participation, while a £1,000 increase in loans results in a 3.2ppt increase in participation, and a £1,000 increase in grants results in a 2.1ppt increase in participation; therefore offsetting any effect from an increase in fees.
The Government's proposals provide a more generous package of grants and loans to ensure that no students face any up-front costs for tuition and those from lower income households, while studying, get more support for their living costs. The Government are also due to consult on the details of the National Scholarships programme aimed at providing further targeted support for students. The more progressive repayment system of graduate contributions to the cost of university education will also protect any low-earning graduates.