June 20, 2014

Using Eligible Students to Drive the Scholarship Fund

The Government proposal

The Government’s proposal is that all universities and other providers allocate a proportion of fee income to support scholarships for students from disadvantaged backgrounds. Each university would use the scholarship funds it raises to support its students, targeting those eligible. The university will determine how much each student receives and whether it defines how the scholarship may be used.

  • The rationale for the scholarships is broadly clear but open to criticism. The intent is to reduce the risk that students from poorer backgrounds will be deterred from university or from some universities due to high fees and the cost of living while studying. The rationale for allowing universities to charge much higher fees is that the HELP scheme removes the financial deterrent; hence the most coherent argument for the scholarships focusses at living costs.
  • The definition of which students are eligible remains to be settled. Some bounds will be needed, however too specific criteria could be problematic in both including some who have little need (which a university could cope with) and excluding some who do.
  • The amount which is to be used for scholarships is 20% of the revenue a university (or other provider) receives above the revenue they would currently receive for that set of students. This threshold is somewhat clumsily expressed and will become a historic curiosity quickly – IRU has put to the Department of Education a means to use the calculation for 2016 as the base for giving universities and other providers a simple, dollar based, revenue benchmark above which the 20% amount applies (attached).