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Financial Guarantees and Fair Treatment

            An interesting article from the Guardian has been bouncing around my Facebook feed of late. The author, Damien Shannon, was offered a place to read for an MSc in economic and social history at Oxford University (St. Hugh’s College). Shannon managed to find sufficient scholarships to pay the required fees, but he was not permitted to take up his place because he only had managed to put together £9000 per annum for living expenses, less than the £12,900 required. Shannon is now suing Oxford on the grounds that the required funds are excessive and unfairly exclude students who have neither the resources nor the need for the lifestyle that £12,900 brings. Whether Shannon’s suit has legal merit is far beyond my own competence, but I believe he nevertheless has a point that the required expenses are excessive and unfair. And while this blog post will be primarily discussing the issue of Oxford graduate student living expenses, the general issues will apply to any school with a similarly inflated living expense requirement.   

Some of this will come down to an accounting game, but from my own experience it is quite possible for a single student at Oxford to live comfortably on much less than £12,900 per annum. Consider rent: Oxford estimates that graduate students will need £7,250 per annum for rent inclusive of utilities, or about £605/month. Perhaps some college accommodation ends up being that high, but the university-run graduate accommodation offers centrally-located rooms for as little as £445/month. Even better deals can be found within reasonable biking distance in private, shared flats. Food is estimated at £2,950, or £8/day. Certainly, if one wanted to eat in-college each day something like that would be needed. But a frugal graduate student can find somewhat cheaper food from Tesco’s or the nightly kebab vans. The remainder, £2,700, is for ‘general living costs’, including clothing, books and socializing. Shannon rightly points out this is rather over the top. Books are mostly unnecessary thanks to the well-stocked libraries. Some formal wear (e.g., sub-fusc) will be required, but that need not run more than a few hundred pounds, if that. Social expenses are a bit harder to quantify, but in my experience the main expenses will be pub meets (maybe once a week with ~£8 in drinks, so ~£416/year total) and restaurant outings (maybe once every two weeks, ~£10-15 in food/drink, for ~£325/year). There are of course some miscellaneous expenses on top of that, but they will hardly rise to the extra £1,500 or so.

All that is just to show that one can study comfortably, if frugally, at Oxford on significantly less than Oxford’s estimate, and Shannon’s budget of £9,000 seems quite doable. Now, I take it that the financial guarantee is in place more or less for the students’ sake. Universities such as Oxford do not want someone taking up a place only to end up living an impoverished life because they set aside too little money (and potentially dropping out because of that). Thus, according to the Guardian, St. Hugh’s wrote in its defense that “ the test of a student’s financial health is to ensure that they will be able to complete their courses without suffering financial difficulty and anxiety.” The policy is then paternalistic to a certain degree, but perhaps justifiably so given that the university is generally in a better position than prospective students to know the necessary living expenses. And there is some sense in overestimating living expenses in budgetary recommendations – better students come in with too much savings than too little. But the university’s credibility becomes undermined when the £12,900 is used not as a recommendation but a requirement. Given different students’ needs and budgeting abilities, it is quite reasonable to expect some – indeed, many – students to be able to manage on significantly less than the required amount.

The requirement is not only imprudent but unfair insofar as it ends up excluding some students of lesser means, and imposing unfair burdens on others. Shannon’s case is a good example of someone so excluded. An unfunded master’s degree is already unfortunately exclusionary. But given that fact, the university should do its utmost to minimize further exclusionary factors. The excessive living expenses are one such factor – it only allows students willing and able to support a more abundant lifestyle to study at Oxford. This is not to say that there should be no requirement for living expenses, but there is at least a strong prima facie case for it being much lower.

One might think, in reply to this, that those in Shannon’s position should simply take out a loan to make up for the remainder of the cost, then repay the loan entirely as soon as the course has ended. It’s hard to say from Shannon’s case how much of a live option this is, but this could at least allow him to take up the course. However, it only does so by imposing greater financial costs on people in Shannon’s situation – through interest and origination fees. It seems patently unfair that those of lesser financial means should end up having to pay more out of pocket for their education, or take out a loan that they do not need.

A more compelling argument has to do with scholarships. Many full scholarships, as I understand it, set students’ stipends on the basis of the university’s requirements. Lowering the financial requirement might then lead to a lowering of scholarships’ stipends. This has some positive effects, insofar as those scholarships could then afford to subsidize more students. But it could foreseeably harm other students who cannot live so frugally as Shannon (perhaps they have a family to support), as the scholarship would no longer be enough for them to study on. Any policy change would have to bear this in mind, but I suspect certain mechanisms (e.g., special scholarship allowances for students with families, or basing scholarships on official recommendations rather than requirements) could be implemented, if they’re not in place already, to avoid these negative effects.

I hope that even if Shannon does not win his court case, he manages to start a conversation that can challenge the received wisdom on living expenses and effect some more nuanced and flexible policies that would help expand access to education at institutions like Oxford.

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6 Comment on this post

  1. Most scholarships are set in conversation with major public funders, which also research the living costs rather than simply relying on the Universities’ assessments. RCUK stipend for the relevant year was higher than than the University’s requirement: If the University is requiring too much in this case, then the Research Councils are presumably ‘squandering public funds’.

    On another tack, I’ve not seen Shannon or any other commentator saying that there should be no financial requirement, only that the actual figure seems too high; ignoring the actual figure, if we concede the validity of having a figure at all then I think there would be a case for discrimination in varying that figure ad hominem rather than applying it across the board. This would be the effect of treating it not as ‘a recommendation but a requirement’.

  2. @’Cynic’ – having contacted and received emails from RCUK about this very issue, there is absolutely not a single bit of evidence to suggest that the figure they stipulate constitutes an assessment of the minimum amount a person would need to live off. £13,900 (tax free) equates to a taxable income of circa £16/17k, or more if you include the tax credits, benefit subsidies etc that would be available to a person in employment. Those earning a minimum wage in Oxford manage on substantially less than this. Those unemployed manage on less than half. I have not read reports of them dying in the streets for want of food, warmth or clothing.

    Furthermore, the figure you quote from RCUK is wrong. Research Preparation Masters attract a maintenance grant of circa. £9,500. Practically the figure I would have had.

    Finally, I have argued before the courts both that the figure is too high, and that any figure is unnecessary. The primary reason for the latter argument is that a University has no legitimate interest in refusing access based on some theoretical expectation of their encountering “financial anxiety”. Subsequent to this is that the vast majority of UK Universities cope perfectly well without this absurd system. If it were “necessary” it would have been replicated. It is not “necessary” but desireable.

    The figure itself is so obviously excessive that I am having quite a good laugh writing my final submissions before next month’s hearing. I cannot wait to hear a QC try and convince a Deputy High Court Judge that those who cannot afford to dine in College will not be financially able to complete their studies. I am smiling at the very thought.

    @Owen – excellent blog post.

  3. @Damien – Thank you for responding.
    First to clarify, I am not competent to comment on legitamacy in law, which you are taking to the courts to test, but comment on the basis that ethicists (that being the focus of this particular forum) often find that the ‘gut reaction’ responses (it is wrong that the University excludes someone because they’re poor) are not so clear cut on close examination.
    Secondly, on the RCUK stipend, the RPM rate is lower because it assumes across the board that a Master’s is a 9-month course; the MSc in Economic and Social History is clearly advertised as a 12-month course, so the full annual stipend is an appropriate comparison. (If I correctly understand the policy St Hugh’s has acted under, even someone on your chosen course who attracted Research Council Funding would have been asked to show means to make up the shortfall.)

    On the substance, I think we would do well to keep a rigorous distinction between arguments about the level of the figure (the focus both of your guardian article and of Owen’s post) and the justification for imposing a figure at all.

    On the level of the figure I think you make good points in general, and your argument that time spent in sporting activities is not seen as so problematic as time spent earning money hits home particularly; I think the University may well find it has to revise its estimate if not as a result of your case at least in response to the public opinion thereby generated. However, I still think that if a figure is used and required of any student it should be required of all uniformly; ad hominem variations, even based on evidence that a lower rent has been agreed, seem to be discriminatory.

    I don’t think anyone argues that the recommended rate is the minimum required to keep you in food, warmth and clothing, but the minimum to successfully undertake an intensive course of study. Although I agree that the amounts quoted may be too high, I think it is reasonable to assume that to undertake your study you do need tolerable comfort in your living quarters and a fully ballanced diet to enable your focus to be maintained, and to be able to engage fully with your course and college mates, which is likely to entail some social costs. I do think it is valid (philosophically if not legally) to cite such engagement as essential to what is offered as part of a course at a collegiate university such as Oxford. Thus it is not obvious that a figure (subject to an argument that there be one at all) should have only reference to the bare minimum for survival. Perhaps a better comparison would be the equivalent of full time earning on the living wage campaign’s recommended rate? (£7.45 * 35 hours * 52 weeks (assuming holidays are paid) = £13,559 (yes before tax, but also before tax credits and other possible benefits))

    Regarding whether any figure should be required I can think of a number of ways in which the University has interest in their students’ ability to support themselves. The question is whether such interests are ‘legitimate’, and to reiterate I am concerned with philosophy rather than law. On broadly consequentialist grounds this will entail weighing the consequence that some students will not be able to take up a place on financial grounds with the consequences of not imposing the requirement, of which I can think of (i) increased call on finite financial aid resources, (ii) increase in the number of students deferring, taking time out, or dropping our completely to build up finances, with knock-on effects on the University’s completion rates (a measure used to indicate the quality of the courses offered), on Student Number Planning, and on efficient allocation of Academic advisor/supervisor resource (iii) increase in students suffering health-related issues as a result of poor housing and/or nutrition (iv) decrease in student satisfaction – which it is reasonable to assume correlates with students’ standard of living – again with reputational cost. I do not think this list is exhaustive.

    I don’t think I close the argument on this point, but I do think there is an argument worth having.

  4. @Cynic
    A few things to clarify. First, it is not necessarily unlawful to discriminate based on financial criteria, as I have stated publicly over and again. In law doing so must serve a legitimate aim, and the means employed must be proportionate. The courts are not restricted in their interpretation of “legitimate aim”, and there is no set formula for determining this. However there are a few general principles that have emerged. The legitimate aim must correspond to a real need, and not simply a desire, on the part of the discriminating authority. The University’s publicly stated position is that it should restrict access to those financially able to complete their course. I am not sure that is a legitimate aim, although my interpretation of this is somewhat intermingled with the proportionality test. I have said elsewhere, that there needs to be a degree of ‘caveat emptor’ about this – let the buyer beware. Accordingly, by my view, a better policy would be to say, “this is the minimum amount of money you need to live on, and if having accepted and paid for your place, you do not have this sum, and suffer as a result, then we did warn you”. I do not think a University has any legitimate interest in confering its benefit exclusively on those who, in its opinion, are financially able to complete study. For postgraduate study, this means (for those who do not have scholarships), only the rich are admitted, especially for PhDs, where the full capital sum (circa. £70,000) must be available up front.

    Second, on proportionality. In law, this is the more difficult point for the College to defend. Why £12,900? Why liquid capital up front? Why an absolute refusal to take any prospective earnings (even modest earnings) into account? None of these questions have been answered. It is only said that the figure is determined by the Bursars, who it is claimed are “experts”. Although it is demonstrable that the figures they have selected bear no relationship to reality (saying those who cannot dine in College will be financially unable to complete study is simply nonsense). Decisions taken by Bursars are not a priori. The only attempt to justify the figure is to do as you have done, and point to the RCUK figure for living costs. To which I now turn.

    Your assessment, like that of the University in their public utterances, is wrong. You may discover the truth here: . In explaining the £9,490 figure, the AHRC state: “A student is only entitled to the total maintenance award if the course or programme of study, and registration on the course, is for the full academic year (i.e. 1 October 2012 – 30 September 2013). If the course or programme of study starts later than 1 October or finishes earlier than 30 September, then the payment should be pro-rated to reflect the actual duration.”

    On this issue of setting a uniform figure for everybody. The law actually requires the exact opposite – it is unlawful to fail to treat differently people in materially different circumstances, without an objective and reasonable justification (see Thlimmenos v Greece (Application No. 34369/97). So in law, it would not only be permitted, but required, to amend the figure enforced, based on the resources of the applicant. Refusal to do so must be reasonably and objectively justified. Such justification could, for instance, be a limitation of resources (it would cost to much to vary the figure for each individual). However so far, the College have not argued this. I think wisely so, since they have to assess every individual’s financial evidence anyway as part of the current admissions procedure.

    “I don’t think anyone argues that the recommended rate is the minimum required to keep you in food, warmth and clothing, but the minimum to successfully undertake an intensive course of study.” Why should the latter figure be any higher than the former? I do not NEED to socialise with other students. I do not NEED to purchase books or meals in College. Not having funds to do this will not affect my capacity to successfully complete study. In my undergraduate degree, I never even met students on the same course as me. I never even met some of the tutors, or even spoke to them on the telephone. More to the point, I do not NEED £604/month for rent and utilities. The University itself provides rooms at £325/month inclusive of all utilities. I do not agree with you – these incidental costs, although essential to enjoy the “Oxford experience”, are not essential to complete study. That is both the legal and moral question.

    On whether a figure should exist at all. I respond to your points in turn. (i) There is absolutely no reason why non-imposition of a financial guarantee would legally or morally oblige a College to increase the sums of financial aid provided. Furthermore it is unlikely to impress the Courts that such resources are available, but access is restricted to those who have already proved they do not need them! (ii) That is simply the real world of academia, which every other University has to face, and cope with, and plan for. Oxford has simply chosen to insulate itself with this ‘wealth test’. Why? Because it can. It can guarantee it will receive a sufficient volume of successful applications from wealth individuals who will be able to meet the terms of the financial guarantee. If it were not such a haven for the rich, the policy would not exist. (iii) As above, the University offers housing at almost half the cost of the minimum enforced figure. An excellent diet can be had on substantially less money than what is demanded at present. These are false alarms you raise. (iv) Reputational cost as a result of poorer students living within their means is highly unlikely to be viewed by the courts as a ‘legitimate aim’.

  5. @Damien
    I have said repeatedly that I am arguing the moral rather than the legal grounds and will leave the latter to the courts. I have also said that I agree both that the figure quoted may be too high, and that maybe earnings on course could be taken into acount (I agree with your point that time spent earning could be viewed similarly to time pursuing sports). I will, therefore, drop arguments about the level of the figure, where although we are not perhaps in full agreement, there seems to be clear common ground. I do think, though, that you are too quick to dismiss the “Oxford Experience”. It is clear that your undergraduate experience was very different, but participation in an interdisciplinary academic community (i.e. a College) is integral to the value-added of Oxford Education and I do not think it is necessarily morally impermissible to suppose that the costs associated with this are, if not equally important as bare survival, at least relevant.

    You confess that you intermingle the argument on the legitimacy of the aim with the argument on proportionality. Focussing solely on the justification for a University seeking assurance that a student can expect to cover the costs of completing the course: i. Most Student Hardship funds specify that they are to help students in ‘unforeseen’ hardship; it is to the advantage of any student that the University can be assured that hardship is unforeseen. ii. A student in Financial Anxiety will be less able to focus on academic work, and to participate in the academic community (which is part of graduate-level study). These points, I agree, are paternalistic to a degree.

    The force of the argument can be wider though. We are both presupposing that Higher Education is a good thing. Your argument is that access to this education should be as wide as possible, and that finances are not a good reason to prevent access in individual cases. My argument is that, given the problems under-funded students will face, the quality of the good for all participants is risked. Reputational damage to the University stemming from lower completion rates and lower student satisfaction (likely, even if not certain, results) will in turn reduce the University’s competitiveness in recruiting the best students, and the resource allocation issues will make the University less efficient in delivering its good. Granting the University the right to say “told you so” to individuals doesn’t really help there. I repeat, I am not concerned with what the courts will consider a legitimate end, but with what might be taken into account by a moral philosopher.

    It also does not necessarily follow that were this policy not in place access would be impoved. Were there not this policy, the University would presumably find that there is a higher take-up rate of offers made, and compensate by making fewer offers. In your particular case, unless you know (which I do not) both where you were ranked among the cohort of candidates receiving an offer for your course and how many fewer offers the University might reasonably have made, we cannot know whether, in a world without this policy, you would have received an offer at all. We can assume, though, that you were not at the top of the ranking, since candidates at the top would have been nominated for the major scholarships available. (As an aside, I note that the University’s public statement also implies that they consider it desirable, though not currently practicable, that all students be offered a fully funded place.)

    For your argument that there should be no such requirement to improve access for others like you you would need to demonstrate that at least some candidates who might not take up places for financial reasons would receive and take up offers (likely) and that they would, in fact, be able to complete the course; bearing in mind that I have agreed there are arguments to be had about the amount required and permisibility of counting earnings so we are concerned here with candidates falling below a hypothetical level which would reflect true costs and resources this latter seems less likely.

  6. @Cynic
    I think if the University are going to insist on sufficient funds to fully partake in the “Oxford experience”, rather than sufficient funds to successfully complete study, then they should be willing to put procedural safeguards in place (means based funding) for those who are able to fund their study, but not the full ‘experience’ of Oxford. Both morally and legally, I do not think it justifiable for a University to select students on the basis of their capacity to fund a certain (generous) lifestyle, however desirable that lifestyle might be. The function of the University is to teach, guide and assess, and provide such resources as are necessary to enable this. Everything else is unnecessary.

    The problem with the University’s conception of unforseen hardship, is that it is still predicated on this artificially high standard of living which forms the basis of admission. “Hardship” is said to be no longer having sufficient funds to meet their specified standard of living – that is, a disposable sum of money of just over £1,000 per month. Conferring the benefit of hardship funds solely on those who were able, but are no longer able, to sustain this standard of living, seems neither ethical nor legal. I understand the process by which these funds are allocated looks in detail at an individual’s financial circumstances. If it is discovered that the individual was actually planning their finances on the basis of, for instance, only needing to spend £600 per month, this renders them ineligible for help, owing to their “bad faith” in claiming originally that they were able to sustain the University’s stipulated lifestyle and spending patterns. So the University and Colleges confer the benefits of need-based funding exclusively on those who, at one point, had proof of their ability to meet a specified standard of living and volume of spending. The benefits are conferred unequally between groups, and those who actually need the funds (those too poor to take up the place in the first instance), are unable to access them. There is nothing ethical in that policy. It might be said to be coldly pragmatic, but not ethical.

    The problem with the “financial anxiety” argument brings us back to the figure – financial anxiety is said by the University to be not having their enforced minimum figures for living costs.

    I am not claiming that finances are not a good reason to prevent access. Since fees must be paid, by definition this forms part of the selection process. There is no positive legal obligation on the government to fund these fees. Again you say the problems under-funded students will face. Yet again this comes back to the figures – under-funded by reference to what? There must be some objective and reasonable criteria for establishing who is underfunded and who isn’t. You argue the University’s figures are too high, but that a flat figure should be (perhaps unlawfully) applied to everybody. I think if there is going to be a figure restricting access (although I would rather there were not), it should be the lowest possible figure to cover rent, utilities and food. I would index it to the local housing allowance, and rate of job seeker’s allowance. That would give us a figure of circa. £7,000 per annum. Anything on top of this must be demonstrable as a necessary cost (i.e. a book or item you must buy in order to be able to undertake study).

    If the policy were removed, and there proved to be a higher take up of offers made, that must be because offer holders who ordinarily would not have met the financial requirement are able to take up the place. By very definition, that has widened access, even if it meant (for me) no offer of study. That is a price I would be willing to accept.

    I must conclude with a question. If the University did not attract wealthy applicants, would this policy still exist? If every offer holder was of limited means, what happens? Do the University keep rejecting candidates, going further and further down the ranking of candidates’ academic suitability, until they find those wealthy enough to fill the places?

    The reason other Universities do not employ this policy is because they know they cannot rely on a sufficient number of wealthy individuals applying to fill the places and pay the fees. Oxford only enforce this policy because they know with absolute certainty that they are a beacon for the rich, who will pay virtually any price. If they were not swamped with applications from the wealthy, either the financial or the academic conditions of entry would have to be relaxed to fill the places. Which goes first?

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