Generous loans will help to alleviate student poverty

Will the recent white paper, with its introduction of variable tuition fees for higher education, damage access for poorer students? Access to higher education is, and always has been, predominantly limited to those from higher socioeconomic groups. It is fundamentally a middle-/upper-class system that has failed many poorer young people who could have benefited.

If one looks at the very top and bottom of the socioeconomic scale, the situation is dire. Three-quarters of young people from professional backgrounds study for a degree, compared with just 14% of those from unskilled backgrounds. Moreover, various funding regimes over the last 40 years, including the generous grants of the 1960s and 70s, have failed to overcome this. Message one, therefore, is that the present funding regime has failed the poor.

Why? Because the problem is not rooted in higher education. For a given number of A-level points, students from poorer and richer backgrounds are, broadly, equally as likely to go to university. The problem is that disadvantaged students are much less likely to get A-levels in the first place.

A socioeconomic gap in educational attainment is evident on entry to primary school, and is pronounced by the time students take their GCSEs. Children of professional or managerial parents are more than twice as likely to achieve five good GCSEs as those with unskilled backgrounds. These differences in attainment at 16 do not explain everything, but are central to any serious strategy to widen access.

If the access problem comes before entry into higher education, this suggests that diverting resources away from higher education towards earlier stages of education could do much to broaden access. Put another way, a pound spent trying to improve the GCSE attainment of poorer students is likely to do more to widen access to higher education than a pound spent on the tuition fees of higher education students, the majority of whom come from higher socio-economic groups. In this sense, the recent white paper is welcome and progressive.

This leads to a third issue: the fear, highlighted in some recent research funded by Universities UK, that increased graduate debt will harm access. If poorer students are more averse to debt, won't the white paper inevitably narrow access? The research does indicate that the poorest students have the most negative attitudes towards debt. However, this kind of research is - to put it no more strongly - problematic.

Individuals' attitude towards risk depends on what they are purchasing (a house or higher education), and their expectations about who "should" pay (government or individual). But of course it is not what people say that matters, but what they do.

In 1991, 6% of those from an unskilled background entered higher education. By 2000, this had increased to 14%. This decade saw the introduction of tuition fees and loans. Although these changes have obviously not solved the access problem, they certainly do not appear to have worsened the situation.

Even if poorer students are more debt averse, the solution is not to pay the tuition fees of everyone. The solution is better targeting of more generous grants for the poorest students. Some poor students might also have their first year's tuition fees paid to provide them with a university "taster".

Better information would also help. We need to convince students that the income-contingent loans we have had since 1998 (ie loans with repayments calculated as a percentage of earnings, collected alongside income tax) are NOT like a mortgage. Your payments on an income-contingent loan are related to how much you earn after graduation, unlike your mortgage payments.

The Universities UK research did highlight the fact that most students had a poor understanding of the actual financial costs of higher education. They tended to be overly pessimistic about the income they will have whilst in higher education and overestimate their expected debt. The students that we need to reach, poorer students, were particularly likely to find it difficult to get hold of information on student financial support. This suggests that the white paper reforms are not the problem, so much as the current paucity of good, easily accessible, information on funding.

The white paper is not ideal. The package of grants and loans is still too small, particularly for those wanting to study away from home or in areas with a high cost of living. Students from poorer backgrounds will be the ones most deterred by a low income whilst in higher education, as they cannot count on parental contributions.

Yet the government is damned if it does and damned if it doesn't. It rightly argues that more generous loans help to alleviate student poverty and thus assist access. But the NUS and some newspapers promptly trumpet lurid headline debt figures.

· Dr Anna Vignoles is a research fellow at the Centre for the Economics of Education, London School of Economics