OPTIONS PAPER FOR RE-STRUCTURING HIGHER EDUCATION HARDSHIP FUNDS
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Summary
Recommendation
1. In order to simplify the current structure of Higher Education Hardship Funds we recommend the creation of a new Higher Education Childcare Fund which will replace the current Mature Students Bursary Fund and sit along side the Higher Education Hardship Fund, to take effect from academic year 05-06. This would replicate the structure in Further Education where we are not recommending any changes.
Background
2. Hardship Funds provide discretionary non-repayable assistance for students in financial difficulties in order for them to access and/or continue in Further Education (FE) or Higher Education (HE) and are paid in addition to any other forms of student support. Hardship Funds are allocated by Scottish Ministers (via the Student Awards Agency for Scotland and the Scottish Further Education Funding Council) and are administered by Higher Education Institutions and Further Education Colleges. More detail on these is provided in Annex A.
3. The Mature Students Bursary Fund (MSBF) is a discretionary fund and was introduced in 2001 as part of the (then) new package of HE student support. Its aim was to contribute to widening access to full-time HE to groups who were traditionally under-represented. It is targeted to new independent HE students with registered or formal childcare costs, though it is also used to provide assistance with housing and excess travel costs. The MSBF was funded from a redistribution of some of the funding available for Hardship (Access) Funds.
4. The policy content for this project was predicated in the Review of Funding of Learners Report. The project has involved detailed consideration of the issues around the current structure, administration, and delivery of Hardship Funds in both Further and Higher Education including their relationship to the current guidance; the effectiveness of their targeting; the simplification of their administration/structure and improving their accessibility. This process has included a survey of all finance and bursary officers in every Higher Education Institution and Further Education College; some case study follow-up meetings; the publication of a report; as well as subsequent further informal consultation on the emerging options.
Key issues with current structure
5. The current system is too complicated and confusing for students and potential students. This is due in large part, to the name and purpose of the MSBF. There can be confusion over the fund's name and purpose as it is not a Bursary Fund for Mature Students themselves, but a fund which can support mature students with particular circumstances. MSBF does not provide grants to older students but provides support for childcare, housing and travel to independent/mature students.
6. Many HEIs and FE colleges have had difficulty in spending their MSBF allocation according to the criteria set out for the fund. As a result, they have faced an under-spend on their MSBF provision, whilst continuing to face pressures on their Hardship Funds. Although these pressures have been alleviated, to some extent, in each of the last two years, through the Executive's approval of the virement of a proportion of the MSBF allocation into Hardship Funds, the current arrangements are not satisfactory. The consistent feedback from stakeholders is that MSBF is not an effectual stream of learner support.
7. Students who do not meet the independent/mature criteria may still require access to support for childcare costs. This is a clear anomaly that we have identified and one that we propose to address through the establishment of a dedicated HE Childcare Fund to which all student parents could apply regardless of status.
8. There is a requirement for childcare costs to be formal/registered and this is in line with the National Childcare Strategy, though it means that students are not eligible to receive support towards informal childcare arrangements. The maximum amount of assistance from the MSBF is £2,000 which stakeholder feedback has confirmed does not necessarily meet formal/registered childcare costs over an academic year in full. In FE although the amounts available to each institution in the Childcare Fund are determined in advance of the academic year (as they are with HE's MSBF) there is no limit on the maximum amounts of assistance payable to individual students. Stakeholders with experience of both systems prefer the flexibility afforded by the FE model whereby student finance/bursary officers can determine the individual amounts of assistance on the basis of a student's particular circumstances. (This is what we are proposing through the establishment of an HE Childcare Fund.)
Introduction Of Options
9. The purpose of the Options Paper is to examine the options available in re-structuring the Hardship Funds in Higher Education (HE).
Option 1
10. Create a new Higher Education Childcare Fund which would replace the Childcare element of MSBF and to which all full-time undergraduate parent students could apply for support (with priority given to lone parents and mature students). We propose to set no limit on the amounts of assistance an individual could receive (although the total fund would be limited and therefore allocations to any one institution would also be defined) and we would need to look at the allocations process to ensure that we avoid under/over allocations. Assistance would still only be payable for formal childcare costs, and the structure would be similar to the Further Education Childcare Fund model.
11. We would also retain the current Higher Education Undergraduate Hardship Fund and augment it with the remainder of the funds from the (former) MSBF. Mature students who previously received assistance from the MSBF for housing and travel costs would become priority students for the general HE Hardship Funds, along with the other current priority students. The funds could still be cumulated and a parent student could still receive assistance from both funds if the eligibility criteria etc were met and the institution deemed fit. We would continue to allow institutions to vire up to 40% from the new Childcare Fund to the Hardship Fund but would anticipate (due to the re-structuring of the funds) that there would be less of a need to do so. Both full and part-time students could apply for this fund (as per current structure).
Option 2
12. Create one single Higher Education Hardship Fund which would replace both the MSBF and the current Hardship Fund. There might be limits on the amounts of individual assistance payable for individuals. Parent students (especially lone parents and mature student parents) would be given a top priority from the fund. Assistance would still only be payable for formal childcare costs.
Option 3
13. Do nothing. Retain current structure and no change to arrangements.
Recommended Option
14. Option 1. The creation of a new HE Childcare Fund would support existing policy development in this area through both clarifying the name and purpose of the fund and also aligning the types of support for students with additional needs in HE with those available in Further Education. This proposal is unlikely to be novel or contentious.
Sensitivities
Presentation of Support for Mature Students
15. Due to the misleading name of the MSBF, there may be a presumption that mature students will be generally worse off under the new arrangements, as the targeted "MSBF" will effectively be withdrawn. However, the main priority for the current MSBF is for formal childcare costs for mature students, and mature students will be able to apply to the new HE Childcare Fund for the same assistance. We will prepare robust lines to take in response to any negative reaction in this regard.
16. Mature students can also currently apply to the MSBF for assistance for travel and housing costs, including up to £150 for costs not covered by childcare, housing or travel. The amounts available in the HE Hardship Fund and new Childcare Fund would reflect this and make mature students (who previously received the housing and/or travel element of the MSBF) a priority for the Hardship Fund itself.
Formal and Registered Childcare
17. The proposed Childcare Fund would only provide assistance for formal/registered childcare costs, which is potentially a sensitive issue as many students use informal childcare arrangements and so would not be eligible for support from this fund. However, this requirement is in line with the wider Executive policy on the use of formal/registered childcare, including the National Childcare Strategy, and as such is necessarily a feature of student support for childcare irrespective of the way the funds are organised.
18. The current MSBF guidance also requires that only the costs of registered or formal childcare may be met from this fund. For the purposes of MSBF, "formal" childcare includes childminders, after school clubs, day care, sitter services and pre-school education provision. Where the children to be looked after are aged 16 or under, the childcare service has to be regulated by the Scottish Commission for the Regulation of Care (the Care Commission) in line with the National Care Standards for Early Education and Childcare up to the age of 16. This is required under the Regulation of Care (Scotland) Act 2001. Family and friends do not constitute "formal" childcare.
19. It is worth noting that the guidance issued by SFEFC on the use of the Childcare Fund in FE states that colleges must ensure that they take account of the Regulation of Care (Scotland) Act 2001 and all childcare regulations.
20. Institutions generally value the flexibility offered by the HE Hardship Fund, which enables them to provide support to students who are in financial difficulties, including those which may arise from having informal childcare costs. We do not propose removing this flexibility, as it ensures institutions are able to target support to those who are experiencing financial hardship.
Students in receipt of a Health Department Bursary
21. Under Option 1 students in receipt of a Health Department Bursary would be eligible to apply to the Hardship Fund (as is the situation currently), but not to the Childcare Fund. This is because the general support package offered to these students is more generous, particularly in relation to childcare support, as students can receive a non-income assessed Health Department Bursary plus an income-assessed dependants allowance (which was removed in mainstream HE support for dependant children from academic year 2004/05 due to the introduction of the new Tax Credit system). Lone parent students also receive an allowance of £1075 for formal childcare costs.
Policy Proofing
22. This restructuring is in line with the overall objectives of the Funding of Learners Review which were to make or recommend changes that will improve the coherence, equity and effectiveness of the overall provision of learner funding. It also dovetails well with the emphasis and attention given to clear information, advice and guidance to students. The clearer naming and purpose of funds will assist to this end.
23. With particular regard to Hardship we have already abolished the Hardship Loan and used the funds available for this to augment the Hardship Funds in HE. From academic year 04-05 we have combined the Young Students Retention Fund with the Hardship Funds in FE. Here we seek to further tighten the structure of the Hardship Funds. Providing support for childcare to all parent students also helps to ensure that we widen access to alleviate the barriers faced by potential students. Following on from this a further project will look to examine how the administration of childcare funds can be changed to improve the coherence, equity and effectiveness of childcare support to HE and FE students; and to look at options and decide on feasibility of implementing improved childcare support arrangements
24. The focus on formal/registered childcare (as paragraphs 16-18 above) is in line with wider Executive policy, including the National Childcare Strategy.
Financial Implications
25. As the Programme spend is fixed, there are no direct financial implications or expenditure involved with this project. The current administration costs that are provided to institutions for the MSBF would be retained to allow for the change to the new system.
26. While there will be no extra expenditure involved in the overall discretionary funds for student support, students should benefit more from these funds due to a better clarity of purpose. Allowing institutions to determine more realistic awards for childcare support to all parent students regardless of status is in effect a targeted redistribution of support that allows institutions more flexibility and discretion. There should be efficiency savings within individual institutions as there will be less of a need to vire monies between the funds.
Presentation and Parliamentary Implications
27. As we are not announcing any additional funding we do not recommend that this restructure merits a news release of its own. We will however work with press office and try to identify any future FFL news with which it could be combined and seek to maximise on any future media opportunities (by for example combining this with a more generic news release on changes made by the Information, Advice and Guidance Project work).
28. Once you have taken a decision we will formally notify the relevant stakeholders. It is important that we do so as soon as possible so that they can make the necessary changes to information material, publicity, and provide accurate advice to potential and returning students.
Legislative Implications
29. Although this project does not directly necessitate any legislative changes in itself it is timely in so far as we are working with solicitors to make a determination under Section 4 of the Education (Access Funds) (Scotland) Regulations 1990 to detail the conditions of eligibility for Hardship Funds in both FE and HE. The determination should be made by the summer (2005) and will not require the DFM's signature, as it can be signed at Group Head level.
Consultation
30. The initial stage of this project was to survey all bursary/finance officers in every Higher Education Institution (21) and Further Education College (46) in Scotland. The questionnaires sought to establish the current usage of Hardship Funds by student characteristic; when in the academic year the funds are being paid out; whether the needs of students are being meet; the role of the institution in the process; and what the views of bursary/finance offices were to improve and better meet genuine hardship needs. We supplemented the findings from the survey with three case study visits and this information was brought together and published in a report.
31. The report was sent to all finance/bursary officers as well as other interested stakeholders. Along with the report we detailed the two potential options (options 1 and 2) that emerged as desirable from the questionnaires and sought further feedback from interested stakeholders. We have also discussed options with HEI representatives. A list of all stakeholders consulted is attached at Appendix B.
Recommendation
32. We recommend that we create a new Higher Education Childcare Fund which will replace the current Mature Students Bursary Fund.
Implementation Plan
Project Team
33. The Project Team will inform key stakeholders by letter as a priority with particular reference to all those involved with providing information, advice and guidance services. We will email those on our Bursary Advisory Group (FE colleges) and Student Awards Agency for Scotland distribution lists to let them know of the changes and thank them for their input.
Policy Work
34. With SAAS we will issue revised guidance in early 2005 (with particular reference to the eligibility criteria) in line with the usual processes. We would intend to consult on the detail of the guidance (as SFEFC currently do for FE). We will decide on the allocations process and formulas with ASD input again in the usual recurrent way and will aim to inform institutions of their allocations by end June 2005.
Evaluation Plan
35. The criteria/questions underpinning the evaluation should be as follows:
35.1 Is the system clearer for students
35.2 Is it easier to administer
35.3 Is the transition from FE to HE more straightforward
35.4 Is there less confusion without a MSBF
35.5 Is there less of a need to vire funds
35.6 Are institutions able to use the funds for their intended purposes
36. The FFL additional needs policy team will be lead-responsible for carrying out the evaluation in conjunction with SAAS and our Analytical Services Division. We may use a rating system for before and after the restructure to better compare the effects of the change.
37. The evaluation work will start at the end of academic year 05-06 once the new system has been running for one year.
Fiona Hesling & Valerie Sneddon
Funding for Learners Division
Monday 10 January 2005
Annex A
38. Hardship Funds are discretionary funds that are intended to provide financial help to enable students to access or continue Further or Higher Education where financial considerations may otherwise inhibit them from doing so.
39. In 04-05 in Further Education (FE) the Scottish Further Education Funding Council (SFEFC) distributed around £2.7 million for the FE Hardship Fund. In 04-05 in Higher Education (HE) SAAS distributed over £13.5 million through the Mature Students Bursary Fund and under-graduate and post-graduate Hardship Funds. Hardship Funds are specifically intended to help students who face financial difficulties to either access, or continue with, their studies. The onus is on the institutions themselves (colleges and universities) to manage and distribute the funds. For FE SFEFC provides national policy guidance for their distribution and for HE the Executive and SAAS provide the guidance and eligibility criteria.
40. Hardship Funds are a key part of our student support system providing invaluable assistance to students. Awards of up to around £3,500 can be made to individual students in both FE and HE and students can reapply during the academic year as their circumstances may change. Students can receive awards from both the Hardship Funds and Childcare Funds (in FE) and Hardship Funds and MSBF (in HE).
Mature Students Bursary Fund
41. The discretionary Mature Students' Bursary Fund for full-time higher education (HE) students provides non-repayable assistance with formal childcare costs as a priority. Over £8.5 million per year has been made available in the MSBF by academic session 2003-04. Individuals can receive up to £2,000 from the MSBF. MSBF can be used to pay for an individual's formal childcare, housing and excess travel costs. The MSBF is a discretionary fund: that is, it is disbursed by the institutions to students based on their assessment of need in each case.
42. An entitlement-based system of support for childcare (other than for lone parents) is currently unaffordable. Students who are lone parents can also receive the Lone Parents' Grant and Lone Parents' Childcare Grant in HE.
42. Recent data from SAAS suggests that around one third of the monies available in the MSBF have actually been spent on childcare costs. This would tally with the fact that many institutions vire up to 40% from MSBF to their general Hardship Fund and the consistent feedback that the eligibility criteria are too tight and that the maximum amounts of assistance payable are too low.
Funding for Learners Division
January 2005
Annex B
43. The Project was undertaken in conjunction with the Scottish Further Education Funding Council and the Student Awards Agency for Scotland. Our Analytical Services Division has also been heavily involved in the project.
External Stakeholders
44. All student finance and bursary officers at publicly funded universities and colleges in Scotland were consulted. Also the following stakeholders were consulted
- The National Union of Student Scotland
- The Coalition of Higher Education Students in Scotland
- The National Association of Student Money Advisers
- The Association of Managers of Student Services in Higher Education
- The Association of Scottish Colleges
- Universities Scotland
- Higher Education Institution representatives - registrars
Internal Stakeholders
- FFL Division
- Higher Education & Science Division
- Further & Adult Education Division
- Education Department: Early Education & Childcare Division
- Development Department: Child Poverty Team
- Health Department: Directorate of Nursing and Allied Health Professions
Funding for Learners Division
January 2005