“Price is what you pay. Value is what you get”

It’s amazing how much of what I have read about higher education recently has converged on the question of what value for money students get for their fees. With fees spreading into further education too, it is a question that is unlikely to go away.
Which? in responding to the OFT’s call for information said “There are worrying signs the higher education market is not working to promote value for money for students, and this has to change” A YouGov poll of parents found that 60% polled did not feel that degrees offer value for money, a viewpoint that will no doubt influence their children’s choices. The OFT may apparently now consider a formal market study to see whether a lack of competition is restricting the value for money for student consumers.
Three main points seem to emerge from discussions around value for money:
  • The first is that there is not necessarily any consensus on what it looks like in the context of tertiary education. Many of those responding to the YouGov poll emphasised employability as key, but it is not clear if students themselves see this as the main benefit. Which? has previously linked value to contact hours and quality/frequency of feedback as well as long term graduate salaries. However, at a conference I attended yesterday, Toni Pearce, President of the NUS, described a focus on contact hours as reductionist.  
  • The second is that that alternatives to higher education are becoming increasingly well promoted. Apprenticeships and higher apprenticeships, for example, are now viable options for more young people, so being able to articulate the value for money a degree or similar qualification offers in comparison is important in beating off this competition for would-be students.
  • The third is that universities and colleges are not necessarily very good at articulating the value for money they offer.
From a legal perspective being able to articulate this value is important mainly because it will help reduce the risk of student complaint. If students recognise the value of the overall package of benefits that their studies will bring them, they are less likely to complain if some minor aspect is not quite delivered to their satisfaction. At the moment, the focus seems to be all on what students believe they are paying for, not necessarily on what they are in fact getting.
If value is defined by the contents of the KIS or principally through quantitative measures such as number of contact hours, there is a risk that students will see their fee as paying for a divisible series of services, each with its own price. We are already seeing, for example, claims by students for compensation for cancelled lectures, even where there has been no overall loss or damage to the student’s studies as a whole. How long before students argue they should be able to pay a reduced fee if they choose not to attend certain lectures or use certain services?
In addition, unless institutions can articulate value better, any investigation by the OFT is likely to be dominated by a push for more data to enable direct comparison of institutional offers, and the linking of price to measurables such as contact hours, rather than by a recognition of the diverse and distinct benefits that different institutions offer.
So for legal risk management too, institutions need to make an effort to identify more clearly the value for money study with them represents. In this context, it seems to me that the PA Consulting Group’s excellent report on The Student Deal offers good principles on which to develop a multi-faceted value proposition for students, one which recognises that students are not just consumers of individual services but investors in a package of benefits that will enhance their lives in all sorts of ways. In many ways it will reposition the dialogue in the more relational (as opposed to transactional) territory I had in mind when I wrote this post on the student contract a couple of years ago, which better reflects both where the education contract is and where it should be. 

Smita Jamdar
Partner and Head of Education
For and on behalf of SGH Martineau LLP
DD: 0800 763 1332
M:  07909 925946
F: 0800 763 1732
International DD: +44 870 763 1332
E: smita.jamdar@sghmartineau.com

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