The folk memory of 100% parental contribution: going, going …?

In a welcome departure from the usual emphasis on fees, the BBC’s Education Correspondent, Sean Coughlan, recently did this useful piece on living cost support, arguing that this, and specifically the scale of contribution required from parents, deserved a higher political profile.

Income as an objective and subjective issue

The focus of the piece was the amount of loan students received.  Grants were described as not “stretch[ing] far up the income levels”, as they run out at around £42,000 (Coughlan was looking specifically at England).

As an earlier post on this site showed,  a pre-tax household income in the mid-£40,000’s is around the median in Scotland for a family with two school-age children.  The figures in England will not be that different (on average: some regions could be more divergent). In 2013-14, 59% of English students under the new arrangements received some grant (see Table 3A(i) in SLC statistics here), so its significance is perhaps greater than the piece suggests.

Coughlan is particularly interested however  in the “squeezed middle”.  Similar issues as he raises have been been made on this site, with the added twist that in Scotland the squeeze is actually harder for families with a student away from home and an income below £54,000, because the total value of available support is lower – often substantially so – than in England or Wales, and  even less of it comes as grant, which runs out in Scotland at just £34,000.

Particularly interesting here is the light the piece  sheds on current  attitudes towards the parental contribution in higher education, in a series of extended quotes from students and their families at the end of the piece.  Their points  echo ones made under other stories about student support over the past year or more.

The table at the bottom of this post sets out the grant and loan entitlements in England at different incomes in detail. Knowing these sort of numbers is useful when reading what students and their families feel about how the current arrangements affect them.

In particular, a number of the comments express unhappiness that a student has been limited to a loan of £3,500.  To be entitled only to the minimum English loan of £3,610 in 2014-15, a student living away from home must come from a household with an income of at least £63,000. There is a genuine sense of incomprehension at the way the system limits its help to this much for  households which, from the limited information offered, appear to be in the top third of the income distribution.  The state, it is implied, is failing in leaving a gap between what it costs to keep a student at university and what it provides, even in these cases.

Full parental contribution: a piece of forgotten history?

The parental contribution was built in with the bricks of modern student support, established in 1962.    It is frustratingly hard to find information on the detail of past  arrangements for maintenance support, but from the basic structure of the system, it seems a reasonable supposition that for the first 30 or so of those years, families in at least the top quarter, possibly more,  of the income range were normally meeting all or most of their children’s living costs.

Initially student grant was mostly means-tested,  with a relatively small minimum universal amount.  By  the mid-1980’s, grant was entirely means-tested and  a significant minority of families were routinely covering all of their children’s living costs.

Then in 1990 student loans were introduced.  They were intended partly  as a substitute for an element of grant (first the real-terms increase, then some of the core amount, then – for a while – for grant as a whole).  But they were also used to provide support to higher income groups previously ineligible for upfront help from the state.  Even then the subsidy started small:  the initial minimum loan was worth one-sixth of total support. It rose in value faster than inflation over the next few years.

The parental contribution was always subject to criticism: even in 1962, the Committee recommending the new arrangements for student funding was split on whether to means test grant and the government’s decision to do so was controversial.  There were regular complaints that some people gamed the system – those on PAYE often suggested the self-employed manipulated their earnings.  Rumours were common of well-off couples strategically splitting up for a few years, and genuinely divorced couples deliberately putting only the lower earning parent in the frame.

But though the way it operated was complained about,  the principle that better-off families should be expected to meet most or all of their children’s living costs at university became normalised, even if somewhat grumpily.  There were always  advocates for the abolition of means-testing and 100% grant for all, but these arguments failed to gain enough  support to have a serious impact.

Parental contribution in 2013-14

These days, it appears that relatively few higher income families in England meet all of their children’s living costs.  The take-up of maintenance loan in England is only slightly lower than fee loan: 88.9% of the students eligible to take out a living cost loan did  so in 2013-14, as opposed to 91.6% for a tuition fee loan.  Some of these may have banked the loan for future use, of course.  The figures cannot tell us that,  but it is harder than it used to be to make a real return on the cash.

Nor is this just an English effect.  In Scotland, 70% of students are borrowers.  Although low-income students borrow more, and more often, than those at higher incomes, borrowing has increased at higher incomes in the past year, following a rise in the value of the minimum loan. In the absence of fees a larger minority of families from Scotland than elsewhere, mainly from higher incomes, have  been able to maintain the attitude that their children should leave university debt free. But the proportion providing all or most of their children’s living costs still  seems likely to be smaller than in the past.

Contemporary attitudes to parental contribution

From the comments under the BBC piece – and similar ones posted elsewhere, from Scotland as well as England – a fundamental rejection of the concept of a parental contribution appears to be gaining ground.  The folk memory of free tuition – phased out from 1998 in England – is powerful.  The folk memory of 100% parental contribution – phased out from 1990 –  seems to have lasted less well.

There could be all sorts of reasons for this, but among the most intriguing  is whether the existence for two decades of a substantial amount of non-means-tested loan has had a subtle effect on perceptions.  If you give everyone a sizeable loan for long enough, is there a point where what started out as a welcome increase from zero begins to be understood as an inadequate gesture short of the full amount?  That impression may be reinforced by the way that expected parental contribution figures at particular incomes have ceased to be published in all four UK nations in recent years.

Conclusion

While it is very difficult to get hold of past parental contribution scales,  a quick look at the general history of student support suggests that the contribution expected from parents in something like the top 20% to 40% of incomes is  at a historic low.  It is unlikely however that that bit of history would cut much ice with those commenting on the BBC site and a wider group whose feelings they reflect:  the debate seems to be moving on.

Coughlan is absolutely right to highlight that the pressure on families at and just above median incomes deserves more discussion, particularly perhaps those with several children, in Scotland at least as much as England. There’s a good debate to have about the pros and cons of parental contribution as a principle,  the relevance of incomes being in the top 20% to 30%, and the case for assessing income vs wealth. But somewhere along the way, it’s worth recalling that for many years, including most of the ones when fees were free,  there was little or no help available towards living costs at  the sort of incomes experienced by a fair number of comfortably off, but not astronomically rich, households.  Our collective memory can be selective.

Footnote: student support in England 2014-2o15

Source: Gov.uk  calculator, here.

Figures for loan give the “living away” rate outside London. Loan entitlements will be lower for those living at home and higher for those away from home in London.  Higher loan rates will also apply for students entitled to special support grant.

Disclaimer: Figures provided for illustration and should not be treated as providing financial advice for individuals, who should check their entitlements direct on the official calculator.