This chapter examines the use of public funding allocated to support students in the Flemish Community, with a focus on direct financial aid to students and on institutional funding for student services. The first section provides a brief overview of the funding mechanisms for student support that are in place in the Flemish Community. The remainder of the chapter considers how the Flemish student-funding model compares with those in other OECD jurisdictions, the impact of student aid on widening access to higher education and how the design of student aid might affect how students choose programmes and incentivise them to progress in their studies.
Resourcing Higher Education in the Flemish Community of Belgium
Higher Education
5. Funding for students
Abstract
5.1 Funding for students in the Flemish Community
A system of study grants and tuition-fee reductions
The Flemish Government provides direct financial support to students in the form of non-repayable student grants. Grants are allocated to eligible students enrolled in recognised higher education institutions for an associate degree, bachelor’s degree or master’s degree, but not available to students enrolled in professional and academic specialisation programmes (bachelor-na-bachlor and master-na-master). The grants system is administered centrally by the Agency for Higher Education, Adult Education, Qualifications and Student Grants (AHOVOKS), with grants awarded to eligible students based primarily on family-income criteria. The level of grants is variable for students whose family income lies between established minimum and maximum thresholds and award criteria include both income thresholds and a points system to take into account other household factors.
The level of grants is also linked to the number of credits for which a student is enrolled. To be eligible for a grant, students must be enrolled for at least 27 credits (i.e. slightly less than half-time), with students enrolled for less than 60 credits receiving grants calculated on a pro-rata basis. Grant levels range from around EUR 270 to EUR 4 300 a year, although average annual grant awards in the academic year 2019-2020 were EUR 1 842 in university colleges and EUR 1 924 in universities (Flemish Government, 2021[1]).
Students can receive grants for a maximum of two associate degrees, two bachelor’s degrees, one master’s degrees and one teacher education degree. Eligibility for a grant is based on a system of “grant credit” (studietoelagekrediet), that largely mirrors the system of “learning credit” (leerkrediet) discussed earlier in the report. Every student receives a “rucksack” of 60 grant credits and a bonus (“joker”) of 60 credits the first time they enrol in higher education. The number of credits for which they enrol is deducted and credits are “won back” for each credit successfully passed. At the start of their higher education career, each student starts with three “pots” of credits in their rucksack:
60 “starting credits”, which are used in the first year of enrolment in higher education to start a programme. This pot of credits can only go down, so will be fully used up if a student enrols for a full 60 credits in their first year of higher education, for example.
A pot for credits “won back”. This has an initial balance of zero, but is credited and debited as students pass credits and enrol for new credits.
60 bonus credits (“jokerkrediet”). This is an additional, finite “pot” of credits that can only go down, which can be used, until exhausted, if a student does not have enough credits in the other pots.
The first two “pots” of the grant credit system are emptied and filled, irrespective of whether a student actually receives a grant. The system thus regulates eligibility for grants throughout a student’s higher education career. The effect of the system of grant credits and minimum enrolment requirement of 27 credits is to limit the length of time a student can receive public financial support without successfully passing credits. By using the bonus credits, a student studying full time can effectively fail an entire year of 60 credits and still remain eligible for a grant. Beyond this, however, they lose eligibility for financial assistance. The grant credits system is somewhat stricter than the learning credit system, as the latter gives students a starting credit of 140 credits and doubles the first 60 credits that students pass.
Table 5.1. Number of grants awarded to students in universities and university colleges
Grant awards per institution 2017/18 to 2019/20 and proportion of total degree-seeking students in receipt of a grant in 2019/20
Source: Data on study grants: Flemish Government (Flemish Government, 2021[1]); Enrolment data for students on a “diploma contract”, https://www.studietoelagen.be/cijfergegevens-per-onderwijsinstelling-hoger-onderwijs (accessed on 1 June 2021); AHOVOKS (2020[2]) Hoger Onderwijs in Cijfers (Higher Education in Figures), https://publicaties.vlaanderen.be/view-file/39991 (accessed on 25 May 2021).
Table 5.1 provides an overview of the number receiving grants at each university college and university in the Flemish Community in the academic years 2017/18 to 2019/20 and the proportion of degree-seeking students who received a grant in each institution in 2019/20. This shows that an average of 30% of degree-seeking students in university colleges received grants in 2019/20, compared to 17% in universities. The highest proportions of grant recipients is observed in the AP University College in Antwerp (39%), the PXL University College in the northern province of Limburg and the Erasmus University College in Brussels. In all cases, these institutions serve student populations from comparatively low-income communities and, notably in the case of the institutions based in the Brussels, Antwerp and Hasselt-Genk urban areas, a high proportion of students with migrant backgrounds (Statbel, 2021[3]). With the exception of the Antwerp Maritime Academy, the lowest proportions of grant recipients are in Ghent University and the KU Leuven, the two largest research universities.
Table 5.1 also illustrates that the number of grant recipients in the university colleges increased by 19% between 2017/18 and 2019/20. This partly reflects the incorporation of associate degree programmes into university colleges from 2019 onwards and the associated influx of students from lower socio-economic backgrounds.
All students pay tuition fees to attend higher education in the Flemish Community. However, students who qualify for a grant and those who come close to qualifying for a grant pay lower fees, as shown in Table 5.2. As with other aspects of the enrolment and funding system in Flemish higher education, fees are modularised per credit unit, meaning that students are charged on a pro-rata basis for each credit they take (on top of fixed basic amounts). In comparison to other OECD jurisdictions where tuition fees are charged, the fees paid in the Flemish Community are among the lowest observed (OECD, 2020, p. C5.1[4]). Domestic students in some comparable OECD systems, including the Nordic countries, Germany and some central European countries pay no tuition fees.
Table 5.2. Tuition fees in Flemish higher education for the academic year 2020/21 (euro)
Source: Flemish Government (n.d.[5]) Studiegelden (Student aid), https://onderwijs.vlaanderen.be/nl/studiegelden (accessed on 8 June 2021).
Institutional funding for student services
In addition to the system of direct student aid, the Flemish government provides a more indirect form of support to students by allocating grants to each higher education institution to provide student services (studentenvoorzieningen – STUVO). The total public subsidy for student services, paid to universities and university colleges as an earmarked grant on top of the core operating grant discussed in Chapter 3 is around EUR 50 million annually. The use of the funds within higher education institutions is regulated by the Higher Education Code, although institutions and the bodies overseeing student services in each institution (the “STUVO council”) have considerable latitude in the way services are organised.
The Higher Education Code states that the STUVO funds are designed to support equal access to higher education through improving basic conditions for students and reducing financial and non-financial barriers to participation. The legislation specifies that STUVO funds can be spent on six areas of activity (“fields of work”) (Flemish Government, 2013, p. III.348[6]):
1. Food and catering: including student canteens and cafeterias.
2. Housing: including advice on housing, coordination of housing on the private student rental market or direct provision of subsidised student housing on or near campuses.
3. Social services: support for students who find themselves in problematic financial or social situations. Support can include additional financial assistance, guidance and counselling or childcare provision.
4. Medical and psychological services: including dedicated mental health support services and advice on accessing mainstream health services.
5. Transport: including, in some cases, additional subsidised tickets or season tickets for local public transport (in addition to those already provided to young people or students by national or regional operators).
6. Student organisations and initiatives: including support for social and cultural activities and sport. Facilities and season tickets for sports or cultural facilities can be subsidised through this line of action.
The funds for student services (STUVO-middelen) are allocated to higher education institutions based on their average share of enrolled credits in the five-year reference period t-7/t-6 to t-3/t-2, where “t” is the current budgetary year – the same reference period used for calculation of the core operating grant (Flemish Government, 2013[6]).
5.2 How the Flemish student-funding system compares and performs
This section reviews the Flemish model of providing financial and other material and non-academic support to students. It focuses on three issues:
How the design of the Flemish model of student support compares to those in other comparable OECD jurisdictions;
Evidence on the effectiveness of student financial support systems for widening access to higher education in support of social inclusion agendas and;
Student support mechanisms and system design features used in OECD jurisdictions to steer students’ study choices and incentivise timely progression and successful completion of studies.
The design of student support systems in OECD jurisdictions
Ensuring equitable access to higher education and promoting participation and completion of higher education by individuals from disadvantaged groups are explicit policy objectives in most OECD member countries. Governments use different combinations of tools to support achievement of their goals for widened access and completion in higher education, including specific measures in quality assurance and accountability systems for higher education providers, information campaigns and financial support to students and higher education institutions (Kottmann et al., 2019[7]).
Direct financial support to students – student aid
Student aid, in the form of grants or loans, is the most frequently used financial mechanism to promote social equity goals across OECD jurisdictions. Comparable data on financial aid provided to students show that levels and coverage of grant and loan systems vary considerably between systems (OECD, 2020[4]). While Nordic states provide universal public grants and, in some cases, publicly subsidised loans to domestic students, systems elsewhere in western and southern Europe, as well as those in other OECD jurisdictions target student aid systems – with varying levels of coverage – on students from designated groups or identified financial need.
Figure 5.1 shows average public expenditure on student grants, scholarships and loans in OECD jurisdictions per full-time-equivalent student, as well as average household expenditure on higher education institutions per FTE student. Expenditure on grants and scholarships is non-repayable expenditure, whereas expenditure on loans represents the amount of government-backed funds advanced to students with the expectation that at least a proportion will be repaid. Household spending on higher education institutions encompasses tuition fees, other fees and payments for goods and services made by students and their families to higher education institutions. This is a proxy indicator for the direct costs of studying in higher education. Depending on whether or not students live in housing provided by higher education institutions, household expenditure on higher education institutions may also encompass a proportion of living costs. This is the case for parts of the higher education system in the United States, for example, where many students at four-year institutions live on campus in university residences. However, where students live off-campus, as in community colleges and open access universities in the United States and higher education institutions systems in many other OECD jurisdictions, household spending on institutions excludes nearly all living expenses.
Figure 5.1. Public spending on student aid in OECD jurisdictions
Note: The bar for the Flemish Community (highlighted) shows grants and scholarships only. There are no public student loans in the Flemish Community.
Source: Adapted from OECD (2019[8]) Benchmarking Higher Education System Performance, Figure 3.6, https://doi.org/10.1787/be5514d7-en.
Although Figure 5.1 uses data from 2015, the main patterns shown are unlikely to have changed since. Among these patterns is the high reliance on public student loans to finance tuition fees and living costs in the United Kingdom and Australia and, to a lesser extent, New Zealand and the Netherlands. Since these data were collected, the Netherlands has increased the scope of its student loan system and reduced the scope of student grants (Eurydice, 2020[9]). Public student loans also play an important role in Norway and Sweden (and Denmark, although data are missing for these indicators in Figure 5.1). However, in these cases, loans serve to support students’ living costs, as there are no tuition fees for domestic and European Economic Area (EEA) students. Public student loans are also a prominent aspect of student support in the United States, although the federal Pell grant system and various state grant programmes absorb a larger proportion of spending on student aid.
After Ireland, the United States is the country that spends the most in purchasing power parity terms per FTE student on student grants. This reflects, in particular, the role of the federal Pell grants in supporting access to education in a country with comparatively high tuition fees. Other than Norway, Sweden and Finland, with their universal grant systems, Germany and the Flemish Community (and Belgium in general) stand out as countries that spend a comparatively high amount per student on grants. The level of around USD 3000 spending per FTE student in the Flemish Community, adjusted for purchasing power parity, is consistent with the average grant rates presented above. The per-student funding level is higher because the data in Figure 5.1 use FTE students, rather than unique students, as the denominator and many Flemish students study at a lower intensity than full-time.
The United States remains the OECD country where households spend the most per student on higher education institutions, as a result of high tuition and, for some students, the housing charges discussed above. Since the introduction of tuition fees, household expenditure on higher education institutions in the United Kingdom and Australia has risen to be the next highest in the OECD. In contrast, average household spending on higher education institutions in the Flemish Community is only 8% of the level seen in the United States and less than 40% of the level in the Netherlands.
Institutional funding for widening access and student services
In addition to direct financial support to students in the form of grants and loans, governments may also allocate funding to higher education institutions to promote social inclusion and widened access. Mechanisms used in OECD jurisdictions include regular or periodic targeted funding to higher education institutions to support access-related activities, incorporating widening access objectives in performance agreements negotiated with institutions or, less frequently, incorporating “access-related” parameters into the formulas used to allocate resources to institutions.
Governments that have introduced institutional performance agreements have sometimes required institutions to include strategies and targets related to widening access, although this is not universal in such agreement systems. Ireland has included access as a priority in its system of institutional compacts, for example. However, the relationship between performance in relation to access targets and funding is not automatic, as institutions are assessed on their overall performance in relation to compact goals and failure to meet individual targets does not necessarily lead to any reduction in funding (O Shea and O Hara, 2020[10]). In England, the Office for Students mandates institutions to prepare “Access and Participation Plans” setting out how they will “improve equality of opportunity for under-represented groups to access, succeed in and progress from higher education”, but these have no direct link to funding (Office for students, 2018[11]).
As noted in Chapter 3, the Flemish Community, along with Ireland and New Zealand, among others, applies an additional weighting for students who receive a grant, students with disabilities and students who combine study and work. This 0.5 weighting is applied in the variable component of the teaching grant allocation to funding points generated by these students for enrolled credits, credits passed and degrees obtained. The objective of the weighting is to compensate institutions for the additional costs associated with supporting students from the target groups to advance in higher education. While the additional resources are welcomed by institutions, the 2015 evaluation of the funding model found limited evidence that the weighting system had led to an increase in participation from the targeted groups. The evaluation also suggested that, as with the other parameters used in the funding model, the incentives created for institutions to change their behaviour are modest (Flemish Government, 2015[12]).
The funds allocated for student services (STUVO-middelen), in contrast, provide targeted funding to institutions with the explicit purpose of supporting widened access and student progression and completion (Flemish Government, 2013[6]). This type of targeted funding to institutions specifically for student services appears to be comparatively unusual among OECD jurisdictions, with such services more typically funded through general institutional funding streams or, in part, through subsidies to student organisations.
The interviews undertaken for this review highlighted that student services offices in Flemish higher education institutions are well organised, with a clear sense of purpose and offer a diverse, accessible and valuable set of services to students. Representatives of student services reported increased cooperation between STUVO services and academic services in providing guidance and counselling to students in difficulty. They also noted that, in common with patterns seen in other OECD systems, there has been a generalised increase in demand for mental health support in recent years – a trend that has been aggravated by the COVID-19 pandemic – and the need for resources to cope with this demand. Many of the same representatives also argued that the current allocation method for the funding of students services – which is proportional to historical credit enrolment – fails to account for differences in student needs between institutions and the associated costs of meeting these needs. In particular, institutions with a high proportion of students from low-income backgrounds, often from families with no history of participation in higher education and with home languages other than Dutch, considered that the current allocation system is inequitable in this respect.
Setting the level of financial support to students and measuring its effects
In designing financial support systems for students in higher education, governments generally have an interest in providing a level of financial support that is adequate to permit students with modest resources to participate and succeed in higher education, while avoiding “deadweight” expenditure that subsidises students who would have participated in higher education without the financial support. As noted, only a few OECD systems – in the Nordic countries – provide universal student grants, as part of their comprehensive and historically conditioned welfare models. In other cases, government seek – in theory at least – to target student financial aid to achieve the greatest effect in the most efficient way possible.
As discussed below, there is evidence to support the case for public investment in financial aid for students to promote increased access to higher education. However, the considerable individual financial returns to attending higher education for the average graduate (seen in most OECD jurisdictions) have been used as a justification by some governments – notably in Australia, England and the Netherlands – to replace grants systems with loans. In a context of growing demands on public funds, notably from health and personal care and school-level education, those advocating spending on student financial aid – particularly non-repayable student aid need sound arguments and evidence. Evidence-based policy-making in this area requires information on the financial needs of students and the effectiveness of financial aid policies in contributing to access goals.
Linking funding rates to financial need
In all OECD jurisdictions, the budget envelope available for public financial aid to students – and thus the level of grants that can be paid – is constrained by the overall availability of fiscal revenue and other calls on government spending. Nevertheless, governments in some OECD jurisdictions seek to align the level of the grant aid they provide to students with estimated living costs. This is notably the case in the United States. The calculation of the level of the federal Pell grant that student receive takes into account the cost of attendance (COA) at their selected higher education institution and the amount the government expects their family to contribute to this cost, based on family income (the Expected Family Contribution – EFC). The COA takes into account tuition and fees, living costs and supplies. Higher education institutions and federal authorities deduct the EFC from the COA to generate an estimated “financial need” (US Government, 2021[13]). Pell grant payments may not exceed the estimated financial need of students, but with the steep rise in tuition fees in recent decades, for many students, the maximum Pell grant no longer covers the estimated financial need, as it often would have done in the 1970s or 1980s (OECD, 2020[14]).
The theoretical link between the expected cost of study and the level of grants provided by the government in the Flemish Community is less explicit than in the United States. However, there have been analyses of the cost of study for Flemish students. A recent analysis, for example, surveyed students in Flemish higher education institutions about their living costs and calculated median study-related and living costs (De Norre, De Leebeeck and Havermans, 2020[15]). The analysis, which was drawn on survey results from 1 092 students concerning study costs and 349 students concerning living costs, found that study-related costs, including tuition fees, printing and materials, amounted to EUR 1 529 for students on professional programmes (in university colleges) and EUR 1 496 for students in universities. The median study costs for students receiving grants were lower, as a result of the tuition-fee reductions afforded to students in receipt of grants, noted above. For students living away from home, the average living costs in 2018 were estimated to be EUR 7 271 for an academic year, the largest part of which was accounted for by rent. The study found rental prices in subsidised student housing (often supported through STUVO funds) were on average around EUR 3 410 a year, compared to EUR 5 140 a year on the private rental market. Between 18% and 25% of students living away from home were estimated to live in subsidised housing, depending on the city.
Comparing prices from previous research undertaken two decades earlier, the study also found that tuition fees and rent were the main drivers of costs increases for students in recent years. As shown in Table 5.3, median tuition fees were estimated to have increased in real terms by nearly 30% for university students and 18% for university college students between 1998 and 2018, while median rental cost had increased by over 50%. In contrast, costs for printing and transport had fallen, in part reflecting reduced reliance on private cars among students.
Table 5.3. Selected study costs for students in Flemish higher education 1998 and 2018
Annual living costs - calculations using 2018 prices in euros
Source: De Norre, De Leebeeck and Havermans (2020[15]) Studiekosten in het hoger onderwijs (Study costs in higher education), http://steunpuntsono.be/wp-content/uploads/2020/09/3.3_studiekosteninhethogeronderwijs.pdf (accessed on 10 August 2021).
The median study costs above illustrate that the average student grant allocated in the Flemish Community might be expected to cover only around a quarter of the living costs of a student in Flemish higher education living away from home (see Table 5.1). Of the students responding to the survey in the Flemish cost study, 82% reported that they relied on their parents to contribute to the costs of their studies. Among university college students, 41% reported that they worked to help fund their studies, compared to 29% of university students. Overall, 30% of student respondents to the study survey reported that they had difficulties paying the costs of studying (De Norre, De Leebeeck and Havermans, 2020[15]).
Effectiveness of student support for widening access
Studies in various OECD jurisdictions suggest that means-tested grants can remove liquidity constraints for disadvantaged students and minorities, improving higher education access and outcomes. Research in the United States has shown that a rise in publicly funded grants increased educational attainment and the probability of attending college (Dynarski, 2003[16]). Grants have been also found to be an efficient means for supporting minority populations to access higher education, particularly in systems where many students fund their education with loans and debt aversion can be a real barrier to participation (Linsenmeier, Rosen and Rouse, 2002[17]). In the United Kingdom and France, maintenance means-tested grants have also been proven to be effective in increasing enrolment among low-income students (Dearden, Fitzsimons and Wyness, 2014[18]; Fack and Grenet, 2015[19]).
This review did not discover equivalent studies with experimental or quasi-experimental designs that have specifically investigated the impact of the system of student grants and reduced fees that exists in the Flemish Community. However, analysis by Declercq and Verboven (2015[20]) does suggest that financial barriers are not the most important factor influencing access to higher education in the Flemish Community. In a quantitative analysis, the authors investigated the influence of sensitivity to the cost of education, preferences for participation in higher education and academic ability from previous schooling on the propensity of Flemish young people to participate in higher education. After controlling for unobserved heterogeneity, they found that preferences and acquired ability are more important than cost sensitivity in explaining lower enrolment of disadvantaged students in higher education in the Flemish Community. In other words, attitudes and “college-readiness” are more important than cost in determining whether someone from a disadvantaged background enters higher education.
Available evidence suggests that the Flemish Community performs moderately well in comparison to other OECD jurisdictions when it comes to widening access to higher education. As shown in Figure 5.2, around 35% of 25-44 year-old Flemish respondents to the OECD Survey of Adult Skills (PIAAC), conducted in 2012 and 2015, whose parents had not completed upper secondary education reported having entered higher education at least once in their life. This compares to an OECD average of less than 30% and only 17% in systems such as Germany. As in other OECD systems, individuals in Flanders whose parents had attended tertiary education were considerably more likely than average to have attended higher education themselves.
Figure 5.2. Intergenerational educational mobility
Note: Countries are ranked in descending order of the share of the HE access rate of 25-44 year-olds without parents with HE attainment
Source: OECD Survey of Adult Skills (PIAAC) (2012, 2015); https://doi.org/10.1515/edu-2020-0110.
Student support and study choice, progression and completion
Governments can use the design of student financial aid systems to incentivise progression and completion in higher education by placing time limits on eligibility for support or making successful progress a condition for continued payment of grants. This appears to be the case, with varying levels of constraint, in the vast majority of OECD student aid systems. As noted, the Flemish student-funding model encourages study progression by imposing a minimum credit enrolment threshold and making payment of grants dependent on students’ having sufficient “grant credit” in their rucksacks. The Flemish system, like most core student aid systems in the OECD, does not seek to steer students in their choice of study by providing additional support for studying in certain fields, for example.
Some OECD governments have sought either to steer study choices or promote progression and completion through providing additional funding – in other words by providing bonus payments, rather than simply regulating or restricting standard student aid payments. The effectiveness of such targeted initiatives has sometimes been difficult to establish. For example, to encourage enrolment in STEM fields, a federal student aid programme in the United States, the SMART grant, provided supplementary grant assistance to about 65 000 low and moderate-income third and fourth-year students who majored in STEM fields during the 2007-2011 academic years (out of a national population of 21 million undergraduate students). Denning and Turley (2017[21]) found that income-eligible students in Texas were approximately three percentage points more likely to major in STEM fields in their junior or senior year than they would have been without the grant. However, Evans (2017[22]) found no evidence of SMART grant impacting on whether students in Ohio persisted in STEM majors or earned STEM degrees. Targeted programmes may generate significant information and application burdens on learners, limiting take-up. Behavioural effects may also be limited as learners are constrained in responding to these offers by preferences and ability.
Studies in various OECD jurisdictions suggest that supplementary student grants targeting economically disadvantaged student populations can be effective in achieving their intended outcomes. In one randomised trial implemented in the public higher education system in Wisconsin (United States), for example, low-income students received a USD 3 500 annual grant (supplemental to other student supports), renewable for up to five years, with recipients demonstrating a 21% increase in graduation rates, and a 29% increase in on-time completion (Goldrick-Rab et al., 2016[23]). Australia, Canada, and other OECD jurisdictions award targeted financial support for indigenous student populations, often as part of a wider set of equity measures or “enabling programmes” (Pitman et al., 2017[24]). Norms governing research concerning indigenous populations have channelled studies towards non-experimental methodologies (Social Sciences and Humanities Research Council, 2019[25]), and evidence of grant aid impacts in improving outcomes for these students remain limited.
In the Flemish context, the Flemish Education Council (VLOR) has called for strengthened efforts to bring students from disadvantaged populations into higher education and to support them to complete their studies. Alongside adequate funding and improved monitoring, the VLOR has called on institutions to implement diversity policies and to focus (to an even greater extent) on orientation and guidance (VLOR, 2018[26]).
5.3 Policy issues and recommendations for student funding
Policy issue 1: Funding to students to support widened access
The student grant system and related system of moderated tuition fees in the Flemish Community has been carefully designed to address the financial barriers to participation in higher education faced by students from low-income backgrounds. Evidence from a range of OECD jurisdictions shows that grants are an effective way to widen access to higher education and this is likely to be the case in the Flemish Community. The Flemish grants programme is particularly flexible in terms of the number of initial qualifications for which a student can obtain financial support, but creates incentives for study progression and completion through the system of “grant credit”. The current system has broad support within the higher education sector and among student groups.
Although not sufficient to meet the full costs of study, the value of grants in the Flemish Community is comparable to that in other wealthy northern European countries and more generous than the current system in the neighbouring, and directly comparable, Netherlands, for example. Against this backdrop, there is no pressing case either to change the design of the grant system or, particularly in the face of competing calls on public funding, to make substantial changes to the level of grant payments in the short to medium term. There would appear to be scope to improve information for students about the full costs of attending higher education. This could be achieved by developing cost and grant simulations for different student profiles, for example, which could then be published on the relevant government and institutional web pages.
In contrast, the current method for allocation of the earmarked grants for student services (STUVO) to higher education institutions merits review. Data on the proportion of grant recipients by institution confirm a significantly higher concentration of students from socio-economically disadvantaged backgrounds in the university college sector and some universities. It is reasonable to expect that these students will generate greater calls on STUVO services and thus higher costs, across multiple “work fields”, than students from more affluent backgrounds. Interviewees consulted during the review also highlighted, in particular, the costs associated with providing appropriate support to students with disabilities. The Higher Education Code makes clear that a key objective of the STUVO funds is to remove barriers to participation in higher education for students most in need, rather than just to provide universal services to students (Flemish Government, 2013, p. Art. II.350[6]).
As data on both grant recipients and students with disabilities is readily available – as this information is used for calculation of core funding allocations – these data could potentially be used as parameters for allocating the STUVO funds. Adding such additional complexity to the allocation model could be justified if it led to funding responding more closely to individual institutional – and student – needs. However, it is recognised that higher education institutions have legitimate concerns about how students from different target groups are defined and the risks of institutions “gaming” the system to claim additional resources. As implementing such a change with a stable budget envelope would result in losers and winners and potentially destabilise the funding of STUVO services in the institutions that lose, a change can only realistically be made through the injection of additional funding. While the numbers of grant recipients and disabled status would appear logical variables to use in a revised allocation formula for STUVO funds, it will naturally be important to develop a revised system in close collaboration with the specialists working directly with STUVO activities.
Recommendations
Drawing on existing cost studies and potentially taking inspiration from the US concepts of “cost of attendance”, “expected family contribution” and “financial need”, Flemish higher education institutions, in partnership with the Flemish authorities, should consider options for improving information for students about the full cost of study. Information resources could include simulations of the costs of attending higher education for different student profiles in different fields of study, thus complementing information on the grants system. This action would support the recommendations of the Flemish Education Council’s recent advisory report on the affordability of higher education (VLOR, 2021[27]).
As a basis for further consultations and decision-making, the Flemish authorities, in cooperation with the higher education sector, should analyse how the allocation of the STUVO funds to higher education institutions could be adapted to allocate additional funding to higher education institutions with high proportions of students with additional learning needs. The introduction of any such system would require an injection of additional funds to ensure no institution loses a significant level of annual STUVO funding.
Policy issue 2: Promoting appropriate study choice, progression and completion
There is little compelling evidence on the effectiveness of top-up grants or equivalent financial aid mechanisms on steering students in their choice of study programme. Part of the challenge of using student support mechanisms to incentivise particular study choices is that study choice in general - and appropriate study choice in particular – depends on many non-financial factors. The interest and the aptitude of the student for particular study fields remain crucial. In an open access, low-fee system such as that in the Flemish Community, it is also unlikely that mechanisms (such as fee discounts) trialled in selective, high-fee systems in the United States would be directly applicable, even if their effectiveness in some contexts could be proven.
The current Flemish model of student financial aid does create incentives for progression and completion. An earlier recommendation in this report suggested refinement of the current system of learning credit, which appears to create too limited an incentive for students to enrol at an appropriate study intensity and work towards swift progression and timely completion of their studies. In this context, it will be important to ensure that the system of “study credit” and “grant credit” are appropriately aligned. Without more detailed data and simulations of the impact of changes to the system of grant credit, it is not possible to conclude whether the current system would require any adjustment to ensure an appropriate balance between incentivising progression and allowing leeway for some initial failure or re-orientation in study paths.
Recommendation
As part of the review of the system of learning credit recommended in Chapter 3, the Flemish authorities should also review the system of grant credit to ensure it creates strong incentives for student progression and completion and that the two credit systems are aligned.
References
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