Adding up the hidden costs of university

The debate around affordable higher education usually revolves around tuition fees - but there are far greater costs to going to university.

The debate around the cost of university is extremely misleading. All the focus is on tuition fees, with little or no mention of accommodation costs and living costs. Moreover, there are hidden costs which are not factored into even these categories. All of this means that the real financial situation for aspiring students from disadvantaged backgrounds is far more problematic than any commentary currently acknowledges.

First, it is important to note the real total of an undergraduate degree. As already stated, the debate in the media centres around tuition fees as if this represents the full price of a degree. However, this is a mere fraction of the cost. Living costs and accommodation costs are both huge expenses that are very rarely mentioned. A conservative estimate of living costs is around £3,500 - around £1,150 per term. Most housing costs around £400 per month, which equates to £4,800 per year. The prediction that allowing an increase in the tuition fee cap would create a market has been proved woefully inaccurate. House of Commons Library statistics show that for the academic year 2012/13, the average tuition fee was £8,400. This is only reduced to £8,100 when factoring in fee waivers. So an estimate of the overall cost of one year of undergraduate education at an average university is £16,700.

Second, we must establish the standard support given by Student Finance for students from low-income families. Tuition fees are automatically given as a loan which students only start paying back once they start working. In determining the financial situation of university undergraduates we only need to look at the other two expenditures: living costs and accommodation costs. Going on the estimates made above, this works out at roughly £8,300 per year. However, even for the most supported students, with household incomes under £25,000, there is only one payment to cover these two costs. The maximum maintenance payment, which includes the maintenance loan and grant, is currently £7,177. This leaves an initial black hole of over £1,100.

In addition to this initial funding deficit, there are a number of practical barriers which increase the financial burden further. For example, the figure for accommodation costs does not include a deposit - for most properties this is one months rent plus 100 pounds. Nor, indeed, does this include a cost for an agency fee. This is unlikely to be necessary in the first year when most students live in university accommodation, but in subsequent years this is very common. The agency fee is at least £100, bringing the black hole to £1,700. What's more, the deposit is only returnable after an inspection upon vacating the rented premises. The result of this is the requirement for a further expense of £600, as the next year’s accommodation has to be secured well in advance of receiving the initial deposit back. While the deposits are returned, it still requires students from low socio-economic backgrounds to find the money before it is returned. This brings our black hole total to £2,300.

The fact that this deficit must be filled by the institution creates a complex variety of potential situations, making it incredibly difficult for students to calculate the exact funding gap they will experience. Very few universities can fully ameliorate the funding gap. The University of Manchester, a member of the Russell Group, provides a significant amount of support to eliminate the deficit. Over a third of their undergraduate intake, which is approximately 8,000 per year, receives the ‘Manchester Bursary’. Students with family household incomes below £25,000 are eligible for £1,000 cash grant, and £2,000 in an accommodation discount. This support is sustained throughout their degree. However, this is the exception as most institutions are not wealthy enough to afford this level of support.

The University of West England (UWE), a former polytechnic, has had to dramatically reduce the support it offers students from low socio-economic backgrounds. The money it receives from the Access to Learning Fund has decreased significantly in recent years. In 2006/07, UWE had a fund of £944,544 to distribute through bursaries. In 2012/13, the figure had dropped to £552,358. The consequence of this can be seen in the number of students receiving a bursary. In 2011/12, there were 2,500 students eligible. This figure has fallen to 1,000 in the academic year 2012/13. As a result, a large number of students who meet the criteria for a bursary will obtain no help in narrowing the hole in their finances. However, the UWE bursary is only £1,000, leaving even the lucky students who receive a bursary in a deficit of around £1,300.

For new universities, the situation is even worse. The University of Gloucester, which acquired university status in 2001, offers virtually no support to plug the gap in student finances. For the academic year 2013/14, the institution will offer 206 scholarships through the National Scholarship Programme (NSP). This scheme is worth £3,000 in the first year of study, and £1,500 for all subsequent years. However, this support takes the form of fee waivers. This means that it has no impact on the financial black hole. Students not eligible for the NSP receive a bursary of £500, but only in their first year of study. The consequence of this is that students from low-income families have virtually no support in meeting the immediate funding gap.

These figures will vary according to institution and geography, there is no doubt that most low-income students have a large funding gap of well over £1,000. The amount varies significantly depending on institution and geography (regional prices and diverse travel costs), reaching anything up to £2,500. And this does not even factor in the impact of inflation. According to the Bank of England, the Consumer Price Index has averaged 3.4 per cent over the last 6 years. The impact of this being that every student is taking a real terms funding cut, year after year. If we are serious about increasing diversity and participation, the financial funding deficit for students from low socio-economic backgrounds urgently needs to be addressed.

Students graduating from the University of Birmingham. Photograph: Getty Images.
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After Richmond Park, Labour MPs are haunted by a familiar ghost

Labour MPs in big cities fear the Liberal Democrats, while in the north, they fear Ukip. 

The Liberal Democrats’ victory in Richmond Park has Conservatives nervous, and rightly so. Not only did Sarah Olney take the votes of soft Conservatives who backed a Remain vote on 23 June, she also benefited from tactical voting from Labour voters.

Although Richmond Park is the fifth most pro-Remain constituency won by a Conservative at the 2015 election, the more significant number – for the Liberal Democrats at least – is 15: that’s the number of Tory-held seats they could win if they reduced the Labour vote by the same amount they managed in Richmond Park.

The Tories have two Brexit headaches, electorally speaking. The first is the direct loss of voters who backed David Cameron in 2015 and a Remain vote in 2016 to the Liberal Democrats. The second is that Brexit appears to have made Liberal Democrat candidates palatable to Labour voters who backed the party as the anti-Conservative option in seats where Labour is generally weak from 1992 to 2010, but stayed at home or voted Labour in 2015.

Although local council by-elections are not as dramatic as parliamentary ones, they offer clues as to how national elections may play out, and it’s worth noting that Richmond Park wasn’t the only place where the Liberal Democrats saw a dramatic surge in the party’s fortunes. They also made a dramatic gain in Chichester, which voted to leave.

(That’s the other factor to remember in the “Leave/Remain” divide. In Liberal-Conservative battlegrounds where the majority of voters opted to leave, the third-placed Labour and Green vote tends to be heavily pro-Remain.)

But it’s not just Conservatives with the Liberal Democrats in second who have cause to be nervous.  Labour MPs outside of England's big cities have long been nervous that Ukip will do to them what the SNP did to their Scottish colleagues in 2015. That Ukip is now in second place in many seats that Labour once considered safe only adds to the sense of unease.

In a lot of seats, the closeness of Ukip is overstated. As one MP, who has the Conservatives in second place observed, “All that’s happened is you used to have five or six no-hopers, and all of that vote has gone to Ukip, so colleagues are nervous”. That’s true, to an extent. But it’s worth noting that the same thing could be said for the Liberal Democrats in Conservative seats in 1992. All they had done was to coagulate most of the “anyone but the Conservative” vote under their banner. In 1997, they took Conservative votes – and with it, picked up 28 formerly Tory seats.

Also nervous are the party’s London MPs, albeit for different reasons. They fear that Remain voters will desert them for the Liberal Democrats. (It’s worth noting that Catherine West, who sits for the most pro-Remain seat in the country, has already told constituents that she will vote against Article 50, as has David Lammy, another North London MP.)

A particular cause for alarm is that most of the party’s high command – Jeremy Corbyn, Emily Thornberry, Diane Abbott, and Keir Starmer – all sit for seats that were heavily pro-Remain. Thornberry, in particular, has the particularly dangerous combination of a seat that voted Remain in June but has flirted with the Liberal Democrats in the past, with the shadow foreign secretary finishing just 484 votes ahead of Bridget Fox, the Liberal Democrat candidate, in 2005.

Are they right to be worried? That the referendum allowed the Liberal Democrats to reconfigure the politics of Richmond Park adds credence to a YouGov poll that showed a pro-Brexit Labour party finishing third behind a pro-second referendum Liberal Democrat party, should Labour go into the next election backing Brexit and the Liberal Democrats opt to oppose it.

The difficulty for Labour is the calculation for the Liberal Democrats is easy. They are an unabashedly pro-European party, from their activists to their MPs, and the 22 per cent of voters who back a referendum re-run are a significantly larger group than the eight per cent of the vote that Nick Clegg’s Liberal Democrats got in 2015.

The calculus is more fraught for Labour. In terms of the straight Conservative battle, their best hope is to put the referendum question to bed and focus on issues which don’t divide their coalition in two, as immigration does. But for separate reasons, neither Ukip nor the Liberal Democrats will be keen to let them.

At every point, the referendum question poses difficulties for Labour. Even when neither Ukip nor the Liberal Democrats take seats from them directly, they can hurt them badly, allowing the Conservatives to come through the middle.

The big problem is that the stance that makes sense in terms of maintaining party unity is to try to run on a ticket of moving past the referendum and focussing on the party’s core issues of social justice, better public services and redistribution.

But the trouble with that approach is that it’s alarmingly similar to the one favoured by Kezia Dugdale and Scottish Labour in 2016, who tried to make the election about public services, not the constitution. They came third, behind a Conservative party that ran on an explicitly pro-Union platform. The possibility of an English sequel should not be ruled out.  

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.