University challenge: Has the new tuition-fees regime affected students' degree choices?

A brave new world awaits the class of 2012 as they embark upon their university careers (or not) later this month. It is not just that fees are rising to up to £9,000 a year – prompting just over 50,000 fewer applicants for courses this year. It is also the wide array of different methods of studying that are at their disposal as the marketplace gains more of a stranglehold over the kind of courses that are on offer.

For instance, you could have all your university fees paid for you by a top private company so long as you work for them when you are not actually studying at university. You could even study for a degree at the home of a top Premier League football club – the White Hart Lane stadium of Tottenham Hotspur. And next year a leading company on the FTSE 100 will enter the fray – providing new degree options at a cheaper rate than most universities.

Large numbers of students, though – larger than was predicted by opponents of the Government's radical reforms to higher-education funding – have still opted to go down the traditional route of a three-year university degree course despite fees potentially trebling.

Many of them will be adopting the philosophy of 18-year-old Natasha Davey, from Wakefield, who has just won a place at Oxford University's St Anne's College to study maths. "Obviously, I was quite upset when I heard the fees were going up," she says. "It's a lot of money. But it's just something you have to go through if you go on to higher education. Hopefully, you get a better job at the end of it."

As Fred Leeming, a former pupil at the leading independent school Ampleforth, who is to study politics and philosophy at Leeds, puts it: "Having to pay off [the loan] the way we do – after [reaching a pay level of] £21,000 a year – is actually OK because it is not paying large sums of money at a time. It just comes out of your account like a tax, which, I think, is much better."

The fees rise was designed to create more of a marketplace in higher education, with ministers originally anticipating that only the most selective of universities would charge the full fees for their courses. If they wanted to charge more than £6,000 a year, they would have to get permission from the Government's university access watchdog, OFFA (the Office for Fair Access), and set in motion measures, such as bursaries, to ensure the disadvantaged did not lose out. The word from the corridors of power was that those that did seek such an agreement "would be the exception rather than the norm". In the event, they all sought – and got permission – to go beyond the £6,000 barrier.

By July (the deadline for university applicants), the impact on university applications became clear – they were 7.7 per cent (or 51,709) down on 2011. The drop was inevitably largest among English students – the only ones who had to pay the top fee whichever part of the UK they studied in. (Fees, for instance, will also rise in Wales and Northern Ireland but not for pupils from those countries, while students from Wales will be subsidised wherever they study in the UK; in Scotland, meanwhile, Scottish students will continue to pay no fees, although those coming from elsewhere within the UK will be eligible for fees of up to £9,000.) As Elisha Corcoran, from Colchester Sixth Form College, who is to study psychology at the University of East Anglia, says: "A lot of my friends decided not to go because of the amount of debt they would be in."

Yet, Universities Secretary David Willetts could take heart from the fact this year's were the second-highest figures for applications ever witnessed – last year's being inflated, as many students gave up a gap year to beat the fees rise. In addition, initial research showed that there had not been a drop-off in applications from students living in disadvantaged areas.

This could largely be attributed to the bursaries on offer to them. For instance, Abbey Swain, an 18-year-old from Exmouth in Devon, whose mother originally told her she "couldn't afford to go to Oxford", found that the university was, in fact, offering a bursary which reduced her fees to £3,500 in the first year and £6,000 for the two subsequent years. In addition, she was in line for maximum Government support to help her meet the reduced fees.

Then there is the fact, highlighted by Leeming, that the threshold at which students start to repay their loans has been raised – from £15,000 a year last year to £21,000 from September. "It is a more generous package than was previously available," says Willetts.

Others would disagree, though, with Martin Freedman, from the Association of Teachers and Lecturers, saying the figures had "blown out of the water the Government's argument that trebling tuition fees would have little effect on the number of students applying to university".

Whatever your take, though, it is a fair bet that applications would be even further down were it not for the range of alternative methods of study on offer.

For a start, there is the Open University (OU), which has seen the number of 18- to 24-year-olds choosing to study through it rise steadily ever since the previous Labour government introduced what now look like rather moderately priced top-up fees of £3,000 a year. Latest figures show the fastest-growing age group for applicants is 18- to 19-year-olds, which went up by 30 per cent last year and is expected to rise even further this.

The advantage of the OU degree is that you can set your own time-span for completing and mix study with holding down a full-time job. Charles Waddington, an 18-year-old from Stratford-upon-Avon, has signed up for a business and economics course with the OU. "Even with really good grades at A-level you can come out with over £50,000 worth of debt studying at a red-brick university," he says. "It just doesn't seem worthwhile." He will be taking a job as a customer – services officer at a car firm as he studies for his degree. He expects to complete his studies in five years although he would like to do it quicker.

Then there is a scheme operated by management consultants KPMG, which recruits school-leavers to work for them while they study for their degree. In exchange, KPMG meets the full cost of their courses in accountancy at leading universities Birmingham, Exeter and Durham.

This year 1,500 young people applied for the 150 places on offer – a ratio that would be the envy of any traditional university (even leading members of the Russell Group, which represents 24 of the UK's most highly research-intensive institutions). "At a time when many young people, graduates included, are finding it difficult to gain employment, this programme represents a credible alternative to mainstream university education and provides an attractive route into employment," says KPMG's Marianne Fallon.

KPMG says that once the recruits have graduated they are well-versed in the needs of the company and do not need the period of adaptation to the workplace that the graduates they have recruited through the milk-rounds do. Other firms are already following in these footsteps.

Studying at a foreign university is also becoming a more attractive proposition. At least two schools – Hockerill Anglo-European College, a state boarding school in Bishop's Stortford which specialises in the International Baccalaureate, and Taunton, a fee-paying independent school – have specifically appointed staff to advise students on options for studying abroad, as the fees are in many cases lower than those a student would pay in the UK. Maastricht University has been one of the beneficiaries in terms of increased applications from our students as its fees are now much cheaper than the UK's.

On the day after A-level results were published, universities in Adelaide, South Australia, were also being advertised, offering the option of a wine-tasting course in a sunny climate for just £1,000 more than the cost of a course in the UK. After this year's summer, you might well see the attraction.

The Coalition is also casting its net wider and encouraging private providers to run their own degree courses. k One of the first out of the block is Pearson, the leading education company which owns Penguin Books and the Edexcel exam board. It is offering a business and enterprise degree course, validated by the Royal Holloway, for the modest sum of £6,500 a year from next September. To add icing to the cake, it is also offering students the chance to forgo their summer vacations and concertina their studies into a two-year cycle – and thus save themselves £6,500. Willetts believes it will not be long before many other private providers are offering similar deals.

One that has already put its head above the parapet, as mentioned earlier, is Tottenham Hotspur, which is offering foundation-degree courses in sports and nutrition and hospitality for £6,000 to prepare young people for a full degree course at Middlesex University.

As you might expect with higher fees, there is evidence that students are becoming savvier when it comes to deciding what and where to study. They are more job-conscious, too, choosing courses which are more likely to lead to employment. Cambridge University, for instance, saw a welcome 3 per cent rise in applications from the state-school sector this year despite the price hike, but – on analysing the applications – it became clear that these rises were in subjects such as science and engineering while the humanities had suffered a drop in interest.

Yet Dr Geoff Parks, the university's senior admissions tutor for this year's university round, is worried that if this trend continues university education could become more "utilitarian", with students going after courses which will net them the best-paid jobs because of the fees they will incur. He says the advice given to students should remain to "do well at a good university and do well at a subject you enjoy".

Figures from the university application service UCAS during this year's clearing system also show that the number pulling out altogether is about 10 per cent higher than at the same stage last year. Privately, academics believe this is because many have decided that, if they cannot get into the course of their choice, they do not want "second best", especially if they have to pay so much for the privilege.

So what of the future? Expect competition to grow with more and more private providers coming to market. Expect some of our elite institutions to grow a little more now that the Government is increasing the number of places set aside for universities that want to expand by taking in brighter students. This year the scheme has been restricted to those with two As and a B grade, but next year this will swell to those with an A and two B grades.

According to Professor AC Grayling, architect of the move to set up the New College of the Humanities, charging its customers £18,000 a year for the privilege of enrolling, his fees will not seem excessive in years to come, as more and more universities recognise they will have to move towards full-cost fees to keep afloat.

The chances of the Government agreeing to this are minimal, though, bearing in mind the political flak the Coalition received during the incubation period for the £9,000 fee. Therefore, argue those who support Grayling's line, universities such as Oxford and Cambridge will issue declarations of independence from the state and go private so they can charge higher fees.

For the moment, though, expect the class of 2012 and its successors to be more thoughtful about their choices. The student is a consumer now and will expect greater service, such as more contact time with lecturers, in exchange for their increased fees. If the traditional universities do not provide that, there are plenty who will.

Richard Garner is education editor of 'The Independent on Sunday'

Case study No.1

Tryfan Hobbs is glad that he clinched a place at a Welsh university

“I think it would be much more expensive if I was in England,” says the 18-year-old from Pontypool in south Wales. In fact, he is right: Hobbs’ experience highlights the anomaly in the higher-education funding system – the Welsh Assembly gives a grant to anyone from the principality studying at a home university, which effectively pegs the fees at the same level as they were prior to the Government’s new £9,000-a-year fees regime. It leads to the interesting spectre of two students from the British Isles on the same course, one paying £9,000, the other £3,250.

It becomes even more fraught  when European Union students are entered into the equation – they can  face lower fees than pupils coming  from England, too.

Back to Hobbs, though, who says  that even if he takes out a loan to  cover the £3,250 part of his popular music degree at the University of Glamorgan in Cardiff, he will still need  to work in his spare time in order to  pay his way through the rest of his university experience. “I’ve applied  to work at the Millennium Centre at weekends,” he says.

Hobbs changed his mind about his degree options during the admissions round. Originally, he had wanted to pursue acting as a career and had two offers from universities to study drama.  As a keen trumpeter and vocalist, however, he changed his mind and opted for music at the last minute instead.

“If it came down to a question of acting in some TV commercial or playing jazz, it would be jazz,” he says. So he  rang the Exam Results Helpline, an independent advice service funded  by the Department for Education set  up to give advice to students.

It talked him through the options available to him and eventually he plumped for the music course at the University of Glamorgan, clinching the place through the clearing system.

“They said they didn’t need to interview me as I had the qualifications  they needed”: Hobbs had a diploma from the London College of Music, BTECs in music and performing arts  and an A-level.

Hobbs admits to being apprehensive about going to university when he thought he was opting for drama but  now he is looking forward to it.

Case study No.2

Raveena Virdee has no worries about fees – because they are being paid for her

A frisson of fear may trouble many  a student as they embark on life at university under the £9,000 fees regime this autumn. Not so Raveena Virdee,  an 18-year-old former pupil at St Albans Girls’ School, as she starts her accountancy course at Birmingham.

The reason is that it will all be paid for by her employer, KPM. Virdee, who gained A* grades in maths and physics and A grades in further maths and chemistry at A-level, is one of 150 school leavers signing a six-year contract with the firm, which will cover all their fees.

For the first four years, Virdee will split her time between university and KPMG’s offices (the firm has offices all over the UK) and will be paid a salary of around £20,000 a year. The final two years will be spent studying for a professional accountancy qualification, with fees again paid for by the firm.

The scheme was launched last year, when 75 undergraduates were signed  on to study at Durham or Exeter University. As a result of its success,  the numbers have been doubled to 150 and a third university – Birmingham – signed up for it. The scheme attracted 1,500 applicants in all.

Virdee has had the ambition to go  to university from an early age. “I think  it is something I always wanted to do,” she says. “While I was looking for  gap-year options, I came across the school-leaver programme and thought  it was for me.”

She will begin an induction course with the company later this month. She says it is “definitely a major perk” to be earning while going through her degree.

“I did also apply through UCAS before I was sure of going on this scheme but, if I’d gone through that route, I’d have liked to have worked for a year to help pay for a little while I was studying.”

Now she is “very excited” to be starting this new phase in her life, saying: “I think I’m just looking forward to meeting a lot of new people. By the time you’ve finished A-levels, you get to feeling a little bit bored with school.”

In Virdee’s case, it will not only be new student friends at university she will be meeting, but workmates, too.

KPMG says its scheme has helped  to widen participation by accepting  a higher percentage of applicants from state schools or colleges (over two-thirds) than from the private sector. 

Case study No.3

The chance of a place at Oxford did not seem realistic for Abbey Swain – at first

“My mother said to be it would be too expensive,” says the 18-year-old student from Exmouth Community College in Devon. Not to mention that her school did not have a history of sending many students to Oxbridge.

“But when I looked into it, Oxford wasn’t charging any more than anyone else,” adds Swain, who has secured  a place to study biomedical sciences  at the university’s New College.

Three things helped change her mind. First, a close schoolfriend of hers was planning to study maths at Oxford’s Hertford College. Second, she attended a summer school at the university for state-school pupils. “It was really good,” she says. “You had to travel down there and you didn’t know anybody. A lot of people were scared about it because they thought it was going to be really posh, but it dispelled that.” Everyone was put up in digs and given a taster of what university life would be like so it would not be so unnerving an experience when they started for real. The students also had access to university facilities such  as the Bodleian Library.

The third factor was the appointment at her school of an ex-Oxford graduate, who convinced pupils they could make the grade. “He took us through the interview process we would face,” she says. “Many pupils at other schools wouldn’t have had that opportunity.”

There was still the hurdle of the finance – even if it was not any more expensive than any other university.

“I knew I would qualify for maximum help from the Government,” she says. On top of that she will receive bursary support from Oxford reducing the fees  to £3,500 from £9,000 in the first year  – effectively wiping out the payment when taken in conjunction with the Government aid. In the second and third years, the fee will be reduced to £6,000.

“I was still really worried about food and entertainment – that a lot of people would have a lot more money and a lot of opportunities to do things,” she says, “but I’m in the lowest bracket for fees.”

She has been spending her final weeks before going to university busily working as much as she can at places such as Boots to save up some money. “I’m so looking forward to going now,” she says. “I’ve been told I won’t need to be there until 2 October when I had thought it would be in September. I can’t wait.”

Case study No.4

Tom Lloyd-Perks began a love affair with computers at the tender age of five

“I was breaking my dad’s computers as I played with them,” says the 17-year-old from Kidderminster who has just won a place at the University of Worcester to study IT in education.

He planned to go to university from his early days in secondary education  – and looked at Aston University, Oxford and Worcester as his three favourite options. “I was put off Aston because  you had three- or four-hour lectures which didn’t appeal,” he says, “so I didn’t bother to apply.”

In the end he was offered a place at Worcester, dependent upon getting three C grades at A-level. He did better than expected, and ended up with straight As. This meant he had the opportunity to upgrade to a more selective university but he decided against doing so because he felt Worcester was a modern, go-ahead university which would supply him  with what he wanted.

Lloyd-Perks is not phased by the prospect of student debt even though he is faced with fees of up to £9,000 a year.  “I don’t think it’s going to be that bad,” he says. “Yes, I’ve got to get a student loan but I’m not too worried about that. If I get a job as an IT infrastructure manager, I could be earning £150,000  a year so it should be easy to pay it off.”

In other words, he believes the qualification is essential to improving his earnings capacity, so he is philosophical about having to pay off his loan.

He is hoping to switch courses once he starts at university because qualifying to become a teacher – which his IT in education degree would allow him to do – would bring him only a £35,000 annual salary. A more general IT qualification could pave the way for bigger earnings. “I was thinking of becoming a teacher,” he admits, “but I’m thinking of changing now. I’m one of those people who – if they get too comfortable in something – they want to move on to something else.”

Although he lives in Kidderminster, which is just 20 miles away from the university, he is planning to move into a shared house for four students, and will meet his new flatmates next week.

“I’m quite excited about it. The main reason I wanted to go into a house is that I wanted to have the whole university experience of living away from home.”