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Higher education is paramount in any country. The European commission states that universities are key players in Europes future and for the successful transition to a knowledge-based economy and society" (European Commission 2006,p. 11). Student's population in all countries across the globe has increased tremendously, with an increase in the costs of funding for higher education. UK higher education institutions of higher learning together educate more than 2.5 million students annually, including over 400,000 students from outside the United Kingdom. The higher education Funding Act, passed in 2004 amid controversy and implemented in 2006-07, introduced a lot of changes to the previous system. Upfront fees were abolished in the new rule and were replaced by deferred fees of up to £3,000(currently £3,145). Grants and bursaries were reinstated for the poorest students in the new system. However, the debts that students accumulate will be continually being paid off at a fixed rate of 9% of the income above a certain earning threshold (£ 15,000) with any outstanding graduate debt being forgiven after 25 years. The graduates were also given the option for taking a 5 year repayment holiday during which they do not have to pay back ant of their students loans .
Policy changes can affect student's participation in higher education. The UK has moved from a situation where higher education was primarily funded by the taxpayer, to a system where the participants contribute towards the cost. From the onset of this cost sharing policy have been plagued with controversy, with fears that this will lower higher education participation, especially for students from less well-off backgrounds.
Statement of the problem.
The United Kingdom has faced two dramatic changes to funding of higher education in the recent years. The first higher education funding change of 1998 came out if the Teaching and Higher Education Act that introduced a first time up-front fee of £1,200 per year for degree courses. At the time, maintenance grants that were a non-repayable form of support to the students was abolished and replaced by higher maintenance loans (but later were brought back in 2004). The second changes were experienced in 2006/07 with the introduction of fees of up to £3,000 per year for all students, irrespective of their backgrounds, deferrable until after the students graduation using government subsidised fee loans. At the time. Poor student's maintenance grants were also increased to aid students from poor backgrounds.
Through a qualitative research, this paper shall seek to first, investigate the effects of the change in higher education funding on prospective applicants, and secondly, find out how these changes affect the employment within the United Kingdom.
Significance of the study.
Major policy changes in education funding impacts students greatly. Tuition fees affect the way the students participate in university and other institution of higher learning. Rise in education costs may deter youths from lower-income backgrounds from accessing education,
Understanding how policy change through change in higher education funding can affect the students and consequently employment within the United Kingdom is important for understanding how the government and other policy makers can promote human capital accumulation and access to education to the students.
Objectives of the study
This research paper seeks to
Explain the causes of the change in higher education funding in the UK
Find the effects of rise in the cost of Higher education funding in the UK on the students
Explain how the rise in the cost of higher education funding affects employment within the United Kingdom
In achieving the objectives of this research, the researcher shall answer the following research questions
What caused the change in higher education funding in the UK?
What are the effects of rise in the cost of Higher education funding in the UK on the students?
How does the rise in the cost of higher education funding affects employment within the United Kingdom?
Summary of paper and organization
This paper has been divided into five thematic chapters.
Chapter in introduces the concept of increase in the costs of higher education funding in the UK on both the students and employment within the UK. The chapter explains the objectives and significance of the study.
The second chapter explains the trends of increase in higher education in the UK
2.0 LITERATURE REVIEW.
In a social and economic environment where skills and competences acquired and refined thorough higher education are becoming more and more important, it is imperative to expand the opportunities to higher education to as large a proportion of the population as possible (European Commission, 2011). The 2009 council on strategic framework in education on modernising universities of Europe for competitiveness explained that the key to higher education are increased lifelong learning opportunities, widening access to higher education for all including non-traditional leaners and improving employability(council, 2007).
The cost of higher education in Europe and specifically the UK has been on the rise. This chapter shall analyse higher education in Europe, with focus on the UK. It shall examine the education in the UK before and after the implementation of policies on the payment of fees for higher education, the reasons being the implementation, and the anticipated effects of the policies on the students, parents and institutions of higher learning.
2.2 higher education in Europe
The overall number of students in institutions of higher learning in Europe has increased dramatically. Research carried out by Eurostat (2011) shows that on average, the student population for the period of 2000-2008 has increased by 20%. The numbers of higher education institutions have also increased consequently.
The rate of youth participation in higher education has been observed to be influenced by a variety of factors, including access policies, the availability of financial support, and demand for specialized skills in the labour market, the demography and the economic situations of the country (Euridice, 2011).
Most European countries report that demographic trends and projections are being taken into account in their mid- and -long term strategic planning regarding the capacity development and funding of higher education (Euridice, 2011). Most of these countries have implemented new policies in the education section, first, with a renewed support for lifelong learning and increased attention to access and diversification of the student body, and secondly, funding readjustments (Euridice, 2011). Most countries that experience decline of people of working age and growing labour market demand for higher education graduated plan to increase the provision for lifelong learning.
2.3 Funding of higher education
Most European higher education institutions are predominantly funded by public sources, but in some countries is funded privately. Generally, public funding of education account for more than 85% of all funding of higher education (European Commission, 2008).
The public funding of higher education institutions is the main source of income for a large part of the higher education sector in all European Union member states (Euridice, 2011). Upto 70% of higher education institutions funds come from the public funds (Euridice, 2008). This is the major steering mechanism for higher education. countries use the public purse to introduce more diversity into higher education to increase performance management, and to meet the demands of the knowledge economy (Johnstone, 2009).
Various researchers have carried out studies on the funding of higher education in general. Salmi and Hauptmann (2006) noted an increasing use of innovative allocation mechanisms in the use of performance based measures and funding formulas. They came up with balanced strategies for funding higher education to widen participation , including:
Increasing public funding of higher education while at the same time charging relatively little fees
Charging higher education feed with greatly enhanced levels of scholarships and students loans
Expanding the private higher education sector in order to reduce pressure of the public funds
Salmi and Hauptmann (2006) notes that in the choice that a country chooses to adopt in funding higher education, the equality effects of funding higher education institutions depends on the choice of the funding mechanism, for example, direct public funding to students through grants, vouchers an loans are more likely to have positive impact.
2.4 Students contributions to education funding
Various researchers in the past have proposed the sharing of costs of higher education between the authorities and the individuals (Salmi and Hofmann, 2006; Joengbloed,
2004; Barr, 2004; OECD 2008a, p. 173; Johnston, 2009). The 2010 annual conference of the OECD programme of institution management advocated for the sharing of education funding between the public authorities and the private individuals . it was noted that the economic downturn has led to a decrease in public funding, whereas the demand for higher education continues to increase, with the best options for catering for the need through private contributions (Euridice, 2011).
the shifting of financial contribution to the students in fostering equity was preferable basing on the fact that public subsidies for higher education are tax-based and therefore in effect constitute a distribution of funds from low to high earners due to higher participation patterns among more affluent societal groups, but with a limitation that the shifting of this burden to the students without supportive measures would most likely have a negative effect on the propensity of groups of lower socio-economic status to participate in higher education (Asplund et al. 2008).
2.5 Higher education financing in the UK , from 1960 -2007.
Higher education in the UK has seen dramatic changed in the recent past. Student numbers have increased drastically, increasing from 50,000 in the 1960's to over 400,000 by 2007/8 ((Euridice, 2011). This increase is attributed to various reasons such as the conversion of 35 polytechnics to universities following the 1992 higher education Act ,and the introduction of General CErtificateof Secondary Education (GCSE) that increased school retention (wyness, 2010). However, the rapid increase in the student numbers in the Universities was catered for in education funding, therefore resulting to educational financial crisis. At the time, funding of the students had fallen to a record low of down to £4,850 (from £8,000 per student at the end of the 1980s). furthermore, the gap in university participation between rich and poor had widened drastically in comparison with other developed countries (Barr and Crawford, 1998), and there were concerns that it was growing even wider (Blanden, Gregg and Machin, 2005). This resulted into two major reforms in the education policies of the UK. The first reform came in 1998, with the second in 2006.
2.5.1 The 1998 education reforms in UK
Following the drastic rise in student population in institutions of higher education saw the introduction, for the first time in the UK, of an up-front means tested tuition fees of £1,200, affecting all but the least well-off students, or just over half of the student population as of 1998. This also led to the abolition of maintenance grants from 1999 onwards that had been reduced into half in 1998 , affecting more than half of the students in institutions of higher education(Goodman and Kaplan, 2003; Barr, 2004).
The policy makers increased the students loans at the same time in an attempt to offset the adverse changes in education funding, the maintenance loans offered similar value to the reduction in grants (affecting those formerly eligible for grants) and an increase in fees, as an attempt to leave the students at a neutral state in terms of up-front support than before the reforms, as the loans could be channelled towards feed or put towards living costs (Goodman and Kaplan, 2003; Barr, 2004).
2.5.2 The 2006 education reforms in UK
Students participation in higher education had increased significantly by 2004, but there were concerns that representation of students from lower socio-economic groups had barely changed in relative terms, even though it had increased in absolute terms (mayhew, deer and dua, 2004). There also arose concerns that the students support package remained too low to cover the costs of higher education, and , universities in the UK were still under-funded as compared to the rest of the OECD, resulting in compromised quality and competitiveness of these universities (Greenway and Hayness, 2003). These mandated new reforms in UK education , that was implemented in 2006.
The 2006 reforms in education brought about important changed in tuition fees. The fee payment was adjusted such that, instead of being paid up-front, all fees would be deferrable until after graduation, with loans available at zero real interest rate, repayable according to income , at 9% above a threshold of £15,000 (Eurodice, 2011). Unlike previously, the current fee, which could be upto £3,000 per year, was not mean tested (Dearden, Fitzsimons and Goodman ,2004).
The policy makers in the 2006 reforms cushioned the adverse changed to fees by offsetting the change to loans, with links being made more explicit through the introduction of fee loans. These reforms also brought about the increase in maintenance grants of up to £2,700 for the poor students. Maintenance loans remained pretty much unchanged, though they were reduced slightly for students who saw a grant increase (Dearden, Fitzsimons and Goodman ,2004). .
The two reforms of 1998 and 2006 highlights two important issues in funding higher education.
The three main elements of the system, i. e grants , fees and loans are all highly dependent on the students parent income
The 3 elements are highly interdependent, i.e. loans are used to offset the adverse changed to grants and fees
2.7 Implications of the new education policy to the students and institutions of higher learning in UK
The new education fees and funding act in the UK brought with it a lot of controversy, with concerns rising from the change of education funding from "free to fee" (Kich foskett et al, 2006).
A research by Kich foskett in 2006 on the introduction of variable feed in the UK showed that:
Home student numbers we seen as stagnating in the immediate future with the introduction of the new education policies, although overseas applications were anticipated to grow
The charging of a uniform fee across institutions of higher learning was seen as both making sense in terms of value associated with products but equally as potential self-incriminating especially for smaller institutions competing with larger and more established ones
Institutions of higher education did not think that student s would be involved in major protest given that the increased financial status delivers benefits to the students in a direct way, such as through improved students services
The agreement was that announcing an upper price limit had failed to create a market as almost all institutions opted for the top fee
It was feared that fewer students would progress to postgraduate study following the introduction of feed, due to accumulated debts
On the other hand, it was noted that more students were likely to take a gap year before entering into higher education to accumulate education funds
Higher education institution feared that students may take longer to complete their studies because they would mix earning and learning
From the research, most of Institution of higher education agreed that issues of employability would be more important as students become more aware of the need to be well prepared for the world of work
The research showed that parental involvement in matters of higher education would increase
Local participation in higher education was likely to grow given that it would ensure quality student life style while cutting the costs of higher education experience, with the regionalization of higher education study likely to increase thereafter
Students would probably spend less time in school due to part time world commitment, eroding the socialization role of the universities
The new acts would make fewer students to choose longer courses such as architecture, engineering, etc. because of the associated debt burden that the course would incur
On the balance, most people viewed that the applicants for education at the time would slow down, but those from European Union would increase
Among the groups that would be adversely affected by price sensitivity includes students in London, or those aspiring to study in London, those students who were not sure of the value of graduate education, poor middle class students in the poverty trap, mature students and recent graduated considering post graduate training
The implementation of the act would most likely increase litigious matters that would affect students with complaints centring on the quality and timelessness of the services
The research showed that consumerism was more likely to increase as the students were more likely to see themselves as purchasing a qualification, rather than seeing themselves as partners in the development of the professional knowledge, attitude and skills
students would anticipate top customer services which would include both speed and quality from inquiry to employment
Higher education institutions league tables would become more important to students as they select those courses and institutions likely to deliver greater benefits to them, especially in the careers market.
2.8 Conclusions on the new policy on education funding in the UK
Research showed that most students in institution of higher learning were likely to be rational about the proposed fees increase in the 2006 act, with the expectations that it would translate into better services and offer them support during their years of study (university of Southampton, 2006). The research showed that these students were not likely to base their decisions to go to university primarily on the issue of the education fees but that rather, some were strongly inclined towards accessing careers first and using higher education as a career enhancement strategy rather than as a career finding strategy. The students were more likely to engage with more part time work as a coping strategy, not only to reduce the likely impact of increased fees, but also as a way of supporting a decent student lifestyle and gain the required employability skills (university of Southampton, 2006).
Studies has showed that students have a meagre understanding of the detailed issued related to funding for their study, expressing little understanding of the various arrangements of institutional support available to them. Although these students seemed pleased with the income contingent loan system, they expressed some insecurity about their financial and debt management skills.
Research in New Zealand and Australia, who had also increased the education fees similarly to the UK, did not reveal any substantial evidence, to show that an increase in the cost of higher education would result in a reduced student participation in institutions of higher education (university of Southampton, 2006).
Researchers have expressed that there is a likelihood of a greater local participation in higher education as a strategy to cushion the students from increased costs of study, alongside of which will be a stronger likelihood of parental involvement in higher education decision making of their children (university of Southampton, 2006).
This study will conduct an exploratory and descriptive research on examining first, the effects of the change in higher education funding on prospective applicants, and secondly, find out how these changes affect the employment within the United Kingdom.
Chapter two highlights some of the anticipated implication of the increase in the cost of funding of higher education in the UK to the parents, students and higher education institutions, as well as some of the factors that lead to this increase. This provided the motivation for this study, to find out whether the anticipated challenges came to pass, and establish if other challenges have arisen out of the education policy change.
This chapter shall discuss the overall study design and the study's multiple data collection and analysis activities sued to collect sufficient data to answer the research questions.
3.2 Research questions.
As demonstrated by the review of literature, the change in education policy of funding higher education carried various implications to the stakeholders. This requires a study to fully understand how far these implications reach. There has been very little study aimed at establishing this. The following research questions shall be used to examine these implications.
What caused the change in higher education funding in the UK?
What are the effects of rise in the cost of Higher education funding in the UK on the students?
How does the rise in the cost of higher education funding affects employment within the United Kingdom?
3.3 The research strategy: qualitative and case study.
Keeping in mind the study's goal, the research strategy needs to focus on establishing the causes of the education policy act, effects of the education policy on the students , and how this will affect employment within the UK.
3.3.1A qualitative study.
This study mandated a research approach that would acknowledge the complexity of social process and focus on the context and specifics of the change of education policy and its effects on the students and employment within the UK. A qualitative approach is most suitable for this research. The following assumptions favours a qualitative approach to this study
Qualitative research enables a holistic perspective. Qualitative research assumes that a complex phenomenon is under study and that a complex system cannot be meaningfully reduced to several variables and linear causal relationships (Patton, 1990). Qualitative approach portrays a holistic setting and impacts is that greater attention can be given to nuance, setting, interdependence, complexities, idiosyncrasies and context (p. 51).
Research incorporates an emergent design. The research design cannot be completely specified in advance of the fieldwork. Clear understanding develops and evolves through the research process and each data collection and analysis activity informs subsequent data collection and analysis activities. This study, as an exploratory study, requires flexibility to respond to the researcher's evolving understanding of the phenomena and to pursue new avenues of inquiry as needed
Qualitative Research is descriptive. Qualitative research focus on describing and understanding phenomena. The description involves detailed account of the context, the activities, the participants, and the process. This study aims at explaining the effects of the education policy on the students of Uk, and how this would affect employment within the Uk.
Qualitative research is primarily focused with the process rather than outcomes or products. Qualitative research focuses on process, and is more interested in understanding and describing dynamic and complex processes. This study is concerned with "what" and "how" in respect to the effects of the educational act on the effects of the rise in the cost of education in the Uk, and how this effects would affect employment within the UK.
Research involves fieldwork. Fieldwork implies that the researcher will have direct and personal contact with the people involved in a phenomenon in the natural setting of the phenomenon
The Research uses the researcher as the primary instrument of data collection and analysis. Qualitative research presumes that the data are meditated directly by the researcher rather than through data collection instruments such as questionnaires, surveys, among others.
Research is interested on how people make sense of their lives, how they interpret experiences and how they structure their social world. Standards development is a social process whereby a variety of stakeholders come together to agree on one or more ways of doing something. A qualitative approach presumes that each stakeholder brings various interpretations and values to the process. This study directs attention at the student in Uk higher institutions of learning, how the education policies affect them, and their employment within the Uk later on after graduation.
Qualitative research approach is exploratory and focuses on discovery.
Therefore, linking the assumptions to this research demonstrates that qualitative research approach is most suitable for this study. The study requires
A holistic oriented approach to a address the complex activities, processes and forces in developing aspects of cultural responsiveness, and their interrelationships
A flexible research design that allows the researcher to pursue new directions in data collection as understanding developed during the research
Orientation towards detailed description that address both the context and specifics of developing aspects of cultural responsiveness
A focus on the participants of the study and the process through fieldwork study
An inductive process that identifies and characterizes categories and patterns in data and grounds the findings in the data
3.3.2 case study
A case study approach is useful when the opportunity to learn is of primary importance (Stake, 1994). The distinctive need for case study arises out of the desire to understand complex social phenomena (p. 14) Case study approach provides a mode of enquiry for in-depth examination of phenomena. Case study research in an empirical enquiry in that:
It investigates a contemporary phenomenon within its real-life context (Yin, 1989)
The boundaries between phenomena and context are not clearly evident
Multiple sources of evidence are used
Case study enables the use of multiple methods for data collection and analysis, the primary sources in this study were the primary source materials and documentary evidence , which includes interview with the participants, observation of lesson progress (teachers teaching mixed race classes), among others. Multiple sources of evidence and different data collection techniques (such as documentary evidence, interviews and observations) are two methods among many that Patton (1990) suggested to improve the quality of the data and research findings.
3.4 Study Design
The following describes the activities that were involved in this study
Preliminary activities. The researcher conducted a comprehensive literature review on the trends of higher education in Europe with focus on the United Kingdom, before and after the implementation of the education acts that introduced the payment of fees for higher education. The researcher analysed the rationale behind the introduction of the fee payments by the students, with the anticipated challenges to the institutions of higher learning, the students and their parents.
Data collection, data reduction and data analysis. The researcher collected data sufficient enough to address the study's three research questions through the use of multiple methods of data collection and multiple sources of evidence. The data will be collected, coded and analysed. Synthesis of the data will involve comparing and checking data from various sources
Findings. The researcher l documented the findings of the effects of rise in the cost of Higher education funding in the UK on the students, and how the rise in the cost of higher education funding affects employment within the United Kingdom.
Final report. The researcher then compiled the results of all activities in a report document.
3.5 Sources of data and data collection
The researcher documented all evidence for developing and accurate chronology of the effects of rise on the cost of higher education funding in the UK on the students, and how the rise in the cost will affect employment within the United Kingdom. Documental all evidence will help the researcher uncover meaning, develop understanding and discover insights relevant to the research problem (Yin, 1994).
This study shall employ two techniques to collect data for the study
Documentary evidence consisting of primary source materials related to funding higher education in the United Kingdom, the reasons behind the rise in the cost of education, and the implications of the rise on the education fees on employment within the UK
Guided interviews with selected students on the implications of the rise in the cost of education in the UK, and its implication on employment
3.5.1 preliminary source material and documentary evidence
Documentary information is likely to be relevant to every case study topic : it can help the researcher uncover meaning, develop understanding and discover insights relevant to the research problem (Yin, 1994). The researcher gathered source material relating to rise in the cost of education, and the implications of the rise on the education fees on employment within the UK
The key criteria for selecting the primary material is :
Authority -necessary for establishing the document's credibility.
Relevance- the documents must be relevant to the study.
3.5.2Guided interviews with students
Patton (1990) observed that interviews provide a way of collecting information and finding out about things that the researcher cannot directly observe. Yin (1994) noted that interviews are an important data collection technique for a case study because case studies are usually about human affairs, therefore they should reported and interpreted through the eyes of specific interviewees, and well informed respondents can provide important insights into a situation. For this study, interviews shall serve the following purposes:
Obtaining here-and -now constructions of a phenomena
Reconstruction of previous events
Projection of the future
Verification and corroboration of data from other sources
The researcher identified students who participated in the interview for the study on the implications of the rise of the cost of higher education of them and the employment within the UK. The interview provided information on their views on the future academic life as well as their employment.
3.6 Selection of participants.
The researcher shall use purposive sampling technique to select key participants that shall represent the population. Random sampling aims at maximizing information collection for variance, and identifies information-rich sources for in-depth data collection ( Patton, 1990).
3.7 Data analysis
3.7.1 Analysis of primary source material
The researcher chose trusted documents from government and other high reputation sites for the study. Such documents includes
policies that affect education such as the education act of 1998 and 2004 that introduced fees
research on the anticipated effects of the students and employment within the UK
Most of these source materials are official records. The researcher shall document all the findings from these documents for coding
3.7.2 analysis if guided interviews
The researcher shall analyse the results of the interviews from the perspective of the students on the effects of the rise in the cost of higher education and the implication son their future employment. The qualitative results were coded into relevant categories for interpretation.
3.8 quality and trustworthiness of the study.
The most important aspect of any research is to incorporate appropriate mechanisms that assure the researcher and reader of the research of the quality of the research, its process and findings.
3.9 quality of the data sources
This research shall ensure that it employs high quality data sources. The researcher shall be keen through the study to capture quality data that build an understanding on the effects of rise in the cost of Higher education funding in the UK on the students and how the rise in the cost of higher education funding affects employment within the United Kingdom. The researcher used data from trusted sources such as government sites and other authoritative sources such as the European Union periodicals, university journals among others.
The researcher used random sampling to select the participants to ensure that the view expressed reflect the overall population views.
3.10 Ethical Considerations
The students participants are valuable contributors to this research project. The researcher ensured that their participation in this study does not expose them to any risk. The researcher shall protect the privacy and confidence of all the participants using pseudonyms. The study participants can provide important feedback and useful contributions to the analysis throughout the course of the project. The researcher shall also ensure that the participants perspectives are accurately reflected,, therefore, the researcher shall share the transcriptions of interviews and analyses of the conversations with the study participants during the data collection and write-up process.