The rise of the unconditional offer spells trouble for students

Universities have dramatically increased the numbers of unconditional offers to potential students. In 2013 only 1% of applicants received such offers, but last year the figure was nearly a quarter. This is clearly of benefit to students and their parents who are relieved of the uncertainty about their university plans. So why is it such a problem?

Firstly, there is evidence that A level performance suffers when the pressure to achieve high grades is reduced.

Ucas, the body which handles student applications, has found that students with unconditional offers are 23% more likely to miss predicted results by two or more grades than are students with conditional offers. Data from the Headmasters’ and Headmistresses’ Conference (HMC), covering independent schools, suggest that the shortfall may be even higher for some groups of potential high-achievers. While these figures need to be handled with caution, the idea that students are likely to put less effort in when the stakes are lowered has intuitive plausibility.

One concern is that sloppy attitudes to study may spill over into higher education. If students are less committed to their university work, they may achieve less than they might otherwise have done. Even if they do well in their final degree exams, they may be disadvantaged when seeking employment. Recruiters trying to differentiate between large numbers of students with good degrees from 130-odd different institutions may home in on weak A-level results.

This problem is entirely of the government’s making.

One long-standing issue is the need to apply to university well before A-level and other public exam results are known. Governments have long been aware of this, but have baulked at reforming the school examinations timetable so that higher education institutions can make entrance decisions on the basis of achievement, rather than the over-optimistic predictions of schoolteachers.

While reform is well overdue, its absence doesn’t explain the very recent explosion in unconditional offers.

One obvious cause is the changes to the funding system. With no caps on numbers, competition for students has increased. This is not a bad thing in itself, but the costs of increased student numbers are picked up by the government. Universities have an incentive to get as many people as possible through the door, even if they are not very good. They want to minimise entry into clearing and the risk that target numbers will not be met.

But as we see from recent statistics, many students will not complete, or will get weak degrees and find it difficult to get well-paid graduate jobs. There is no comeback on universities who take weak students as there used to be in the old HEFCE-funded days. There is a clear ‘moral hazard’ problem here. Institutions need to be incentivised to ensure the quality of their graduates.

One way might be to involve institutions in the funding of graduates, as Peter Ainsworth has argued in work for the IEA. In his scheme, universities contract with students to take a proportion of their future earnings in lieu of fees. In this way they are deterred from taking weak students and encouraged to boost degree quality.  

Increasing unconditional offers for financial motives tends to be associated with what are euphemistically described as the ‘recruiting’ universities – those with difficulties making up the numbers.

Another, less obvious, incentive problem arises at the top end of the market, in the Russell Group universities. These prestigious outfits are under increasing pressure from the Office for Students to admit more students from disadvantaged backgrounds. Making unconditional offers to disadvantaged students allows these universities to ‘improve’ their student mix by admitting more people who tick the right boxes without requiring them to compete on equal terms with other applicants who have to achieve high grades. This arguably is an injustice to these other applicants.

Ucas and the HMC have appealed to universities to restrict the use of unconditional offers. But their proliferation is symptomatic of wider problems. The onus should not be on the universities, which are responding rationally to incentives that the government has created. It is the government which needs to rethink.

Editorial and Research Fellow

Len Shackleton is an Editorial and Research Fellow at the IEA and Professor of Economics at the University of Buckingham. He was previously Dean of the Royal Docks Business School at the University of East London and prior to that was Dean of the Westminster Business School. He has also taught at Queen Mary, University of London and worked as an economist in the Civil Service. His research interests are primarily in the economics of labour markets. He has worked with many think tanks, most closely with the Institute of Economic Affairs, where he is an Economics Fellow. He edits the journal Economic Affairs, which is co-published by the IEA and the University of Buckingham.

1 thought on “The rise of the unconditional offer spells trouble for students”

  1. Posted 28/09/2018 at 15:50 | Permalink

    Agreed. When I was at university I saw many students drop out after the first year, many had already racked up thousands of pounds of student debt.
    I was a mature student with no formal qualifications due to undiagnosed dyslexia. However I completed my two year computing HND course and passed with merits and distinctions. So unconditional entry to university can be beneficial as long as the student has some life experience or real aptitude in a particular subject.

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