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Thursday, January 31, 2013

Defying expectations on student applications

The figures published yesterday showing the number of students applying for a university place threw up some unexpected outcomes.

The first of these was that Wales has bucked the trend despite a student fee regime that sees the Welsh Government cap tuition fees for homegrown students at £3,500.

The BBC report that throughout the UK there was a 3.5% rise in the number of applications but in Wales it was down by 2.7%. There was though a rise in those wanting to attend Welsh universities from outside Wales.

What is significant about these results is that the Welsh Government is once more using the Welsh block grant to subsidise English Universities. As the BBC explain, average tuition fees in England have now hit £8,500. That means each Welsh student deciding to study over the border will take a £5,000 Welsh government subsidy with them per year:

It is hoped those sums would be offset by the number of students from outside Wales choosing to studying in Wales and paying the full tuition fees of up to £9,000 charged by some of the institutions, such as Cardiff University.

According to an investigation by the BBC's The Wales Report earlier this week, in 2012, more than 7,000 Welsh students crossed the border to study outside of Wales - a 13% increase on the year before.

This saw the Welsh government pay £31 million in fees to universities in other parts of the UK.

However, the number of English students enrolling at universities in Wales in 2012 fell by nearly 17% compared to the previous year.

As a result education experts have questioned whether the £1.5 billion policy is sustainable.

Stephen Tall highlights the other interesting trend, which is that university application rates in England are at their highest ever for disadvantaged groups, even post-£9,000 tuition fees.

Some of this may be down to a better understanding of how fees are repaid that effectively makes them a form of graduate tax. Nobody pays up front of course, there is a higher threshold before repayments are triggered and the loan is written off after a certain period of time.

The Government were wrong to set fees at £9,000 but in terms of inclusivity they appear to be getting away with it.
How do you work this out as a £1.5bn policy? at £5000 per student per year that would mean 3million students?
That is taken from the BBC report. It is 300,000 students over 5 years I believe.
The 7000 figure you quote from the BBC is wrong, and the statement "This saw the Welsh government pay £31 million in fees to universities in other parts of the UK." also needs to be balanced against what is coming the other way. The figures actually show that for 2013 there are 14,896 students from Wales who went to England to attend University, but 39,863 students from England are studying in Wales. This means that whatever cash Wales is 'exporting', there is substantially more cash coming the other way from England. Sounds like a good deal to me.
In their evidence to the Assembly's Finance Committee on the draft budget Cardiff University revealed that there was a net outflow of funds from Wales to England of £10 million in year one of this policy.
Because the 'premier Universities' like Oxford and Cambridge are in England where there is no equivalent inside Wales, let's assume that all the Welsh students are all invoicing the Welsh budget for the maximum fee (14,896*£9000=£134m) and let's assume the English students are paying Welsh Universities the average fees in Wales (39863*5000=£199m). The gross level gain to Wales in fees should therefore be £65m. As you ay Cardiff University (who take into account costs) think it's actually a NET loss of £10m. Total deficit is therefore £75m. This must be made up of the cost of a place not being covered by the fee income. To balance revenue and costs we need the fee from the English student to rise to £12,000. The problem is not the number of Welsh students in England but the much larger contingent of English students in Wales who are evidently not paying enough.
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