Oxford University Gazette

PROPOSED NEW TUITION FEES AND BURSARY SCHEME

• Introduction
• Background
• Fees for Home/EU Undergraduates, 2006–7 onwards
• A new Oxford Bursary Scheme
• Administration
• Proposed change in fee regulations
• ANNEXE A
  • Undergraduate degree programmes to which the fee of £3,000 would apply
• ANNEXE B
  • Statement of principles of the proposed Oxford Bursary scheme agreed by the Joint University/College Working Party on Bursaries
• ANNEXE C
  • Graph: Oxford Opportunity Bursaries and other student funding from 2006 (also showing funding for other English students) (PDF file)

University Agenda

CONGREGATION 25 January 2 p.m.

Voting on fee regulation for undergraduate fees from 2006–7 in context of proposed new joint Oxford bursary scheme

Introduction

1. Council and the Conference of Colleges have now considered a report from a Joint University/College Working Party which was set up in January 2004 to examine the implications for Oxford of the Government's legislation on tuition fees for Home/EU undergraduate students, and associated bursaries and financial support for those students. The report of the Joint Working Party looked at two main issues:

• The level of tuition fee which the University should set for full time Home/EU undergraduates beginning courses from 2006–7 onwards; and
• The structure of an Oxford Bursary Scheme to provide additional financial support for students from the lowest household income backgrounds.

2. Having considered the recommendations of the Joint Working Party, Council now makes the following proposals to Congregation. These proposals have been discussed by the Conference of Colleges, and have its endorsement. Congregation is now asked to note the following points and to approve the legislation appended at Annexe A to give effect to points (a) and (b).

(a) The University should charge the maximum permitted fee to Home/EU undergraduates for all years of all relevant courses from 2006–7 onwards. This fee would be £3,000 in the first instance.

(b) Those undergraduates currently eligible to pay fees at half the full rate (e.g. those out of residence on a year abroad) will be eligible to pay fees at half the new rate.

(c) Fees for students on other courses whose fees are currently set at the undergraduate rate (the BCL, M.Juris, and the PGCE) are still under consideration.

(d) A joint Oxford bursary scheme, administered on behalf of the University and the colleges, should be established from 2006–7, offering bursaries to Home undergraduate students in the lowest household income categories as follows. The provision for first-year students in the lowest household income categories is higher in year 1 to reflect the likelihood that new students will face some initial start-up costs at the beginning of their studies.

Household income 1	Oxford bursary
£0–£15,999	£4,000 in year 1, £3,000 thereafter
£16,000–£22,499	£3,000 in year 1, £2,600 thereafter
£22,500–£33,499	Between £2,500 and £1,500 (on a sliding scale according to income)
£33,500 upwards	n/a

(e) Individual colleges will continue to be able to provide other financial support to undergraduates in the form of scholarships, travel grants, hardship grants, and other forms of student financial aid.

(f) The Oxford Bursary Scheme for Home undergraduates should be administered through a single university/college office, which will assess eligibility under the scheme and will also provide a point of contact and information for students and others; administration of payments to individual students will be made by their colleges.

(g) The office, having carried out the assessment, will arrange to transfer to each college, each year, the required funding to meet the costs of the bursaries payable to the eligible students at that college.

3. It is estimated that the total annual costs of the bursary scheme, once it is fully established, will be approximately £5.5m a year, equivalent to just under one-third of the additional income arising from the £3k (`variable') fee.

4. In the remainder of this report, the term `bursary' is used to denote a financial award made to a student on the basis of means testing, to provide general support for maintenance and living costs. `Scholarship' is used to mean a financial award made for other purposes (e.g. to reward particular achievement or for a specific purpose).

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Background

5. The Higher Education Act 2004 permits universities in England and Wales to charge Home and EU undergraduates higher (`variable') fees for approved degree courses. Students will not be liable to pay these fees whilst they are studying: the Government will pay (via the Student Loans Company (SLC)) fees on students' behalf to universities, and then in effect recover them from students after they have graduated and once their income has reached a certain threshold.

6. A university's ability to charge higher fees will be subject to the approval by the Director of the new Office for Fair Access (OFFA) of an `access agreement' with that university. Significant changes to other aspects of student support are also made under the legislation. In particular, any university charging a fee to undergraduates in excess of £2,700 must provide bursary support to Home students from households in the lowest income categories (as defined by Government); the minimum level of support for such students is £300 each year. There is an expectation that universities will considerably exceed this minimum level, and spend up to one-third of the net additional income from variable fees on bursary support and work to encourage widening participation and improved access from groups currently under-represented in higher education.

7. Individual universities are free to react to the legislation as they see fit. However, it is already becoming clear that many universities will expect to charge the maximum £3,000 fee to undergraduates from 2006–7 on most if not all of their first degree courses. It is therefore unlikely that there will be any significant market based on variable fee levels. On the other hand it is likely that there will be a significant difference in the levels of financial support, over and above the provisions being made by the Government, which are offered by different universities to students from the lower income backgrounds. To this extent, there may well be a market in bursaries and student support.

8. In March 2003 Congregation considered and approved a resolution which supported, in principle, the proposition that students should be expected to make a greater contribution to the costs of their university education. In particular, Congregation recognised that, in the absence of any likelihood of significantly increased public funding for undergraduate teaching, it was not realistic to discount as a policy that students, as independent adults at 18 and major beneficiaries of a university education, should bear some of the costs of a high-quality university education through a subsidised loan with income-dependent repayments. Council and Conference have taken account of this earlier debate in framing the present proposals in regard to both fees and bursaries.

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Fees for Home/EU Undergraduates, 2006–7 onwards

9. At present, the University composition fee for Home/EU undergraduates is £1,150. This is the maximum sum allowable under present legislation. Under the terms of the Higher Education Act 2004, the University will be allowed to charge fees up to a maximum level prescribed by the Secretary of State, provided that certain conditions are met. Chiefly, the Director of OFFA must approve the access agreement which the University is obliged to prepare if it wishes to charge fees in excess of the current level. The maximum allowable fee in 2006–7 will be £3,000.

10. Council has borne in mind that the University currently faces severe financial pressure in many areas. This is constraining the growth and development of Oxford's academic activity. This pressure is felt across the whole University, and is a daily fact of life in most departments, faculties, colleges, and support services. Growth in revenue is failing to keep pace with growth in costs, and one of the major challenges faced by Oxford is the need to raise additional revenues to maintain its position as a world-class University. The Government's new legislation on fees now provides Oxford with an opportunity to begin to address this.

11. Leaving aside the additional resources required to enable Oxford to grow and develop in future, the current shortfall in income can be quantified in various ways, depending on the assumptions used. Figures reported to HEFCE and prepared under the Government's Transparency Review Costing Method (TRAC) showed that in 2002—3 (the latest year for which data is available) there was a deficit on publicly funded teaching in Oxford of some £27.8m (and this does not take full account of the college position), and a deficit of £67.7m on publicly funded research. These estimated deficits are not covered by any other source of income, and do not take into account any planned growth or new developments. An alternative estimate of Oxford's financial need prepared by the Financial Strategy Group which advised the previous Vice-Chancellor suggested that the annual funding gap for Oxford was of the order of £100m.

12. In these circumstances, Council believes that it is essential to take the opportunity of the Higher Education Act to generate additional revenue and that, like most other universities, Oxford should charge the maximum permissible level of fee for Home/EU undergraduates, for all years of all relevant courses. This would mean, in the first instance, a fee of £3,000 per annum, rather than the present £1,150. The University's ability to set a fee at this level will be subject to the approval of its access agreement by the Director of OFFA which will be submitted before Christmas.

13. Congregation is now, therefore, asked to approve the legislation which follows this report, which proposes an amendment (in advance) of the relevant fee legislation governing fees for Home/EU undergraduates for 2006–7. A schedule of the relevant undergraduate courses which will attract this fee is attached at Annexe A. ² All three-year and four-year courses are covered.

14. These new fee levels would be phased in, so that only those students beginning a course from 2006–7 would be liable for them; those already on a course at that date, or deferring entry until that date, would continue to pay fees at the old rates until they complete the relevant degree course.

15. It is estimated that there will be a net increase in fee income in respect of Home/EU undergraduates as a result of this change of some £18.6m (at 2006–7 fee rates), once the new fee rates are fully implemented (i.e. once they are being paid in respect of all students on course). This full additional net figure will thus not be received by the University until 2009—10 at the earliest. This figure is based on fee levels at 2006–7 prices, although there is provision for annual increases to reflect inflation; and it also assumes no change in the number of Home/EU undergraduate students during the intervening period.

16. In conjunction with this new undergraduate fee for Home/EU students, Council also proposes to establish a new Oxford Bursary Scheme for Home undergraduates, and to continue to promote associated work to encourage widening participation and access. As indicated below, the Bursary Scheme and associated work is likely to cost of the order of £5.5m a year (at 2006–7 rates), equivalent to about one-third of the net additional income from the £3k fee. No formal decisions have yet been made as to precisely how the residual net income will be used (this question being beyond the remit of the Joint Working Group which has reported to Council), but given the financial constraints referred to at the beginning of this report, it is likely that the additional funding will be subsumed in meeting shortfalls which are already being incurred.

17. The extra income received from higher fees will not in itself be sufficient to solve the University's financial challenges. The University will continue to seek further additional income from other existing and new streams of funding to support its future development and to close the present funding gap. Current work to develop the University's longer-term financial strategy will address this issue.

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A new Oxford Bursary Scheme

19. The minimum level of bursary which the University must offer in order to be able to charge the maximum fee is £300 per annum, to be awarded to students in the very lowest household income categories (for definitions of which see para. 22 below). However, there is a clear expectation that the University will go considerably beyond this in its provision of bursaries, and Oxford must have regard to its own firm objective of ensuring that all students with the potential to benefit from an Oxford undergraduate education are encouraged to apply, and that no student should be deterred from applying to the University on financial grounds. In this context it must also take account of what seems likely to be the nature of the bursaries to be offered by other leading universities, as well as by international competitors. (Discussions with other universities about their schemes cannot of course take place as they would be likely to fall foul of legislation on anti-competitive practices.) These considerations point towards a scheme which is considerably more generous than the Government's minimum.

20. The proposals presented here also draw upon the successful experience of the present Oxford Bursary Scheme for Home/EU undergraduates, which is managed on behalf of the collegiate University and offers a total of £2,500 over four years to students from the lowest income backgrounds. The proposals also reflect work on average essential living costs for Oxford undergraduates; this work has been especially relevant in assessing an appropriate level of bursary that, when taken with support available under the Government's national scheme for loans and grants, will ensure that students from the lowest household income categories have their living costs fully supported.

21. From the outset, the objective has been to develop a bursary scheme which is jointly owned by the University and the colleges, and operates as a single Oxford Bursary Scheme on behalf of the whole collegiate University. This, and other principles which have underpinned the development of the scheme, were given wide circulation at the end of Trinity Term 2004, and are reproduced as Annexe B to this present document.

22. Taking into account these principles the proposed Oxford Bursary Scheme can be summarised as follows:

• Full time Home undergraduate students in household income category £0—£15,999 will receive bursaries in their first year of study of £4,000, and bursaries of £3,000 thereafter. The higher level in Year 1 is designed to reflect that fact that new students are likely to face some initial start-up costs in their first year of study which will not recur.
• Students in household income category £16,000—£22,499 will receive bursaries of £3,000 in year 1, and £2,600 thereafter.
• Students in household income category £22,500—£33,499 will receive bursaries on a sliding scale, beginning at £2,500, and declining by £100 per £1,000 household income.

Minor changes might have to be made in due course to take account of the precise profile of government provision at the upper end of the third income bracket. The arrangements generally ensure that no new undergraduates entering the bursary scheme in 2006 should be worse off in terms of fee and student loan liability than if they had entered the University before 2006.

23. These bursaries will be in addition to the levels of support available under the Government's own schemes for grants and loans. All students will also continue to be eligible for additional scholarships and financial support (for example in the form of hardship grants, travel awards, and other provision) made available in Oxford by individual colleges.

24. Taken together, this will mean that Home students in the very lowest household income category will have their full essential living costs met while studying at Oxford (assuming average costs of £5,700 a year in 2006–7), ⁴ and need not take out any maintenance loan on top of their loan for fees; while other students covered by the scheme will also have available to them a substantial range of financial support to assist them while at Oxford.

25. Attached, at Annexe C, is a diagrammatic representation of the proposed Oxford Bursary Scheme. [PDF file.]

26. It is estimated that this scheme will cost approximately £5.5m a year (at 2006–7 prices) when fully implemented (i.e., by 2009—10 when four cohorts of students are attracting fees at the new rates). The £5.5m is equivalent to approximately 30 per cent of the net additional income arising from the variable fee. When put together with the money the University will at that time be spending on access-related outreach activities, this will satisfy the Government's expectation that a sum equivalent to roughly one-third of the additional income will be spent on bursary support and on schemes to promote widening access to Oxford.

27. The new Oxford Bursary Scheme will be phased in from 2006–7 onwards, in the same way as the variable fee will be phased in. Thus, until 2009—10, the existing and the new Oxford Bursary schemes will be operating simultaneously, with the former scheme covering students already on course by 2006–7, and the new scheme covering those beginning their studies from that time.

28. The scheme has focused on meeting maintenance costs, rather than the cost of the £3,000 fee. This takes account of the fact that students will not become liable to repay any of the debt in relation to their fee liability until they have begun earning after graduation, and have reached a certain income threshold. The aim is to encourage all potential students from low household income backgrounds to consider applying to Oxford without concerns over perceptions of cost, and to provide successful applicants from such backgrounds with support while they are studying.

29. The scheme is also designed to draw on the unique strengths of the collegiate system in Oxford. The core of the approach is a generous system of uniform bursary provision for all eligible students. On top of this, colleges will continue to offer hardship and maintenance support where necessary, tailored to the needs of individual students, and colleges will be able to use their own resources to cover costs of this sort. College support can, of course, be extended to students who fall outside the eligibility criteria of the main Oxford scheme, but who may nevertheless need financial support at some point in their Oxford career. This will ensure that Oxford's bursary and hardship support is comprehensive and extensive–with colleges being best placed to identify the financial difficulties of students which may not be accounted for through the main Oxford scheme. The relatively small University Hardship Fund will also continue, to help in cases of wholly unforeseen need.

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Administration

31. This office will be responsible for assessing the eligibility of prospective students for the Oxford Bursary Scheme, calculating entitlement, advising colleges of which of their students are eligible and at what level. Funds equal to the costs of the bursaries payable to students at each college will then be transferred to the college from this office, and colleges will make the actual payments to students. Thus, each payment under this scheme will be jointly badged as being from the University of Oxford and the student's college. Colleges will have discretion to meet the costs of some or all bursaries from their own resources, and thus may use money received from donations from alumni, or endowment, for this purpose, provided that at all times they operate within the terms of the bursary scheme, meet their obligations to students under the scheme, and are accountable for making the relevant payments to students.

32. As well as being administratively efficient, this represents the most useful means of operating from the point of view of the prospective student. The precise location of this financial aid office, and the likely resources required, will be worked out in due course, and in full consultation with the Conference of Colleges.

33. The timetable for decision-making has been driven by the need to have an Access Agreement in place by the end of 2004, and by the deadline for producing the 2006–7 undergraduate prospectus. It is recognised that not all of the issues associated with the new fees and bursaries regime have been fully dealt with in this timeframe, and a number of issues are therefore outstanding. Many issues will need to be kept under review in the period between now and when the new arrangements come into effect. These include matters such as the average essential living costs for undergraduates, the distribution of eligible students across the whole student population, and national arrangements being made by the Student Loans Company (SLC) for managing the new fee regime.

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Proposed change in fee regulations

With effect from 1 September 2006

2 Ibid., l. 23, after `£560;', insert `[for 2006–7 the rate shall be £1,500 which shall apply to student members of the University who start a relevant course with effect from 1 September 2006 and have not deferred entry to the course from an earlier year ]'.

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ANNEXE A

Undergraduate degree programmes to which the fee of £3,000 would apply

Biochemistry, Molecular and Cellular

Biological Sciences

Chemistry

Classical Archaeology and Ancient History

Classics (Literae Humaniores)

Classics and English

Classics and Oriental Studies

Computer Science

Earth Sciences

Economics and Management

Engineering Science

Engineering and Computing Science

Engineering, Economics and Management

English

English and Modern Languages

English and Middle Eastern Languages

Experimental Psychology

Fine Art

Geography

History (Modern)

History (Ancient and Modern)

History (Modern) and Economics

History (Modern) and English

History (Modern) and Modern Languages

History (Modern) and Politics

History of Art

Human Sciences

Law

Materials, Economics and Management

Materials Science

Mathematics

Mathematics and Computer Science

Mathematics and Philosophy

Mathematics and Statistics

Medicine

Modern Languages

Modern Languages and Linguistics

Music

Oriental Studies

Philosophy and Modern Languages

PPE

Philosophy and Theology

Physics

Physics and Philosophy

Physiological Sciences

PPP

Theology

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ANNEXE B

Statement of principles of the proposed Oxford Bursary Scheme agreed by the Joint University/College Working Party on Bursaries

1. This statement sets out the principles on which the University's bursary scheme for undergraduate students for 2006–7 onwards will be based. The scheme is intended to complement the introduction of variable tuition fees for Home undergraduate students, which is currently the subject of legislation before Parliament.

2. These principles have been drafted and endorsed by the Joint University/College Working Party on Bursaries, which was established to examine arrangements for financial support for students in the light of the Government's Higher Education Bill.

3. The principles are as follows:

(a) There will be one Oxford Bursary Scheme for Home undergraduates, administered by the University.

(b) The scheme will be designed to ensure that students from low income backgrounds are not discouraged from applying to Oxford on financial grounds. Students in the very lowest household income categories will have all their essential living costs met while studying at Oxford.

(c) The aim of the scheme will be to support and foster high academic achievement, which is the primary goal of all aspects of undergraduate teaching provision and support in Oxford. This will be achieved by removing, as far as possible, financial obstacles to academic study.

(d) The scheme will seek to provide significant financial support to as many students as possible, recognising the difficulties faced by students from lower middle income backgrounds, as well as those in the lowest income brackets.

(e) The scheme will build on the unique strengths of the collegiate structure in Oxford, recognising the close relationship that colleges have with their students. The uniform provision made available by the University under the Oxford Bursary Scheme will be complemented by colleges providing additional support through their own resources to meet individual cases of financial hardship where the uniform bursary scheme is insufficient.

(f) The support offered through the Oxford Bursary Scheme will be equal for all eligible students, according to the terms of the scheme, regardless of the Oxford college to which they belong: no student will be disadvantaged, in terms of support offered under this scheme, by membership of one college over another.

(g) The scheme will be simple to administer, and straightforward for students and parents to understand.

( h) The University will seek to promote and publicise the scheme as widely as possible, so that all potential applicants are made aware of the financial support available to them.

(i) The range and design of the University's financial support for students will form an integral part of its policies on widening access and participation, and on recruitment in general, so that the best students continue to be attracted to Oxford, regardless of their background. Academic excellence demonstrated by undergraduates on course will continue to be recognised through the award of scholarships and exhibitions on the basis of performance during an undergraduate's course.

(j) The scheme will be designed so that it can be developed and extended in the future, to ensure that it can continue to remove financial barriers to entry at Oxford as external circumstances change.

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Footnotes

² Consultation is taking place on whether the new fee should also apply to those graduate courses (BCL/M.Jur. and PGCE) for which the Home/EU fee is the same as for undergraduate courses. In the case of the PGCE, the outcome depends in part on national discussions.
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³ Further consideration will be given to whether full-time non-UK EU undergraduates should be eligible for the bursary scheme. The present Oxford Bursary Scheme extends to such students but eligibility in this instance is related to eligibility for fee remission. Under EU law fee remission must be available to home and other EU students alike but the same is not at present true of arrangements for maintenance support. A case on this is, however, under consideration in the European courts.
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⁴ This figure of £5,700 for essential living costs in 2006–7 was arrived at by examining costs of accommodation, meals, and other expenses.
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